Why does CX approach generate losses for companies?
How to stop playing and start making money. An opinion
Nowadays User and Customer Experience approach have turned from fancy corporate play to the only way to survive for thousands of companies. Now it’s necessarily to set up research and UX/CX lab inside or to work with agency in order to
- research the market and competitors’ best practice
- collect the data from ‘service as is’
- estimate the level of customer service, understand pain points and processes gaps
- improve current level of customer service by
- ‘go digital’.
84% of organizations working to improve CX report an increase in revenue (Dimension Data)
A moderate increase in Customer Experience generates an average revenue increase of $823 million over three years for a company with $1 billion in annual revenues. (Temkin Group)
Organizations that lead in CX outperformed laggards on the S&P 500 index by nearly 80%. They retain higher share of wallet and have customers that are seven times more likely to purchase more from the company, eight times more likely to try other products or services, and fifteen times more likely to spread positive word of mouth. (Qualtrics)
But what do companies usually gain?
Do companies have clear vision what they do and why?
Are customers happy with the service or product?
How does new approach help to earn money?
In fact, lots of companies
- try to use new tools and approaches with no precise understanding how these insrtuments can be applied to their business
- don’t have well-defined strategy how to combine current and new tools
- start to involve a lot of people from different departments
- don’t educate employees enough
- have communication between teams not at good level
- don’t have one product owner or process owner who covers all the changes
- don’t measure costs of new approach and don’t re-calculate the base cost of product
- don’t count properly how they can receive more income from new activities
- not clear, not measurable and complex processes increase costs
- faced with lack of mature system of KPI’s
- are unable to deliver the unique proposal for customers because can not
And all these and other factors potentially lead company to chaos and failure.
In order to have business success and revenue increasing it’s extremely important not only to use but adopt new tools and frameworks for certain business, make them profitable instruments.
What are the inputs of success?
- think about what make your customers happy and how you can do it by your business
- care about customers not only in case of easy onboarding creation, observe all the touchpoints of the process when customers use your service or product
- study not only user or customer experience during they use the service or product but observe human experience and expectations
- be open and try new, but check how new tools apply to your business
- spend enough time for сustomer research and development to get true hypothesis, don’t waste time to implement features that not really required by customers
- evaluate costs of new activities
- be practical — use only profitable ideas, don’t waste resources only just to show that you have modern frameworks in your business
- create a strong but flexible KPI system connected to new implementations based on UX/CX findings — track classical rates — NPS, Customer satisfaction rate, Churn rate, % of daily/monthly active customers, Retention rate, LTV per customer etc, and service or product parameters —
why people should use your service or product?
how long it takes for customer to go through all the process?
do customers have pain points and why?
what barriers do they have?
is content easy to understand?
do customers trust service?
how they feel and think, what emotions do they have?
and others — these are the reasons that can bring you profit if you understand their influence to your business
- take into account that not all processes should be digital, you can move all possible service processes to digital and provide excellent person to person service when customers happy to have it and ready to pay for.
In this way, synergy of CX approach and system of KPI’s tracking allow the ‘business engine’ to move successfully.
Customer experience studio Pulse specializes in researching digital and offline experience in order to help B2C and B2B companies to build an excellent customers’ and partners’ impressions, create trustful relationships and create efficient model
Demo-report: Digital customer experience research of mobile apps for food purchasing
