Customer experience (CX) is a rapidly-growing sector valued globally at around $20 billion, and brands that don’t recognise and respond to the correlation between CX and business performance are paying the price. Consider these three statistics:
- 86% of US consumers said they would pay more for a better customer experience from the brands they currently buy from (Source: RightNow Technologies)
- A 1% improvement in NPS (Net Promoter Score) for one global travel brand equates to more than £23 million in incremental revenue each year (Source: Kantar TNS)
- A 5% increase in customer retention can increase a company’s profitability by 75% (Source: Bain & Co)
While there’s no shortage of conversation, debate and thought leadership being shared in the world of CX, what’s largely missing is the action.
Rocket science optional
Optimising and operationalising CX within your organisation is largely based on three simple and fundamental principles. Your customers want to be known as individuals, to be heard and to be valued. This means demonstrating that your company cares about – and will respond to – the information and feedback that they provide you with.
1 - Know me: Use what you know to provide me with what I need
Brands have spent years harvesting data, with their customers contributing more and more valuable information over time. Consumers understand this, and now expect you to use that information to deliver a personalised and relevant service based on their preferences, purchases, and lifecycle events. This is a critical aspect of relationship building that extends way beyond any marketing remit.
For example, EasyJet’s highly personalised and creative anniversary email campaign turned data into profit, leading to 430,000 customers making a booking within 30 days and generating £100 million in revenue. Target has famously made over $1 billion by predicting pregnancies based on customer behaviours and using that information (subtly) to offer relevant product coupons to these customers.
As well as personalising individual experiences, customer data can be used to anticipate and respond to general needs and preferences. For example, in response to seeing unused mobile data being ‘wasted’ each month, EE now enables customers to share theirs with family members. Similarly, Sky Mobile lets users roll it over to the next month. Both brands recognised the opportunity and turned a potential niggle into a positive benefit.
2 - Hear me: Listen, learn and act on what I say
Customers want to be able to provide feedback when and how they choose; and expect you to take notice of what’s being said. And in the new order, challenger and disruptive brands often provide their customers with opportunities for involvement, collaboration and co-creation, which fosters a powerful and tribal sense of belonging and ownership. This experiential aspect of building brand relationships is becoming increasingly important, as we know from millennials consistently expressing their preference for experience over ownership of material things.
In retail banking, for example, challenger bank Monzo has already edged over the one million user mark in the UK, showing impressive growth in a short space of time. By creating and learning from their user community (which connects at real events as well as online), brands like Monzo are making a significant impact in the way they engage with their target audience and meet their needs.
3 - Value me: Demonstrate that you value our relationship
This isn’t just about loyalty promotions (which in their traditional form are arguably dead), it’s about valuing and respecting your customers’ time and opinion. ‘Closing the loop’ with customers (irrespective of their satisfaction) is universally recognised as the best way to maintain or improve your CX performance.
Many brands have now valued their CX and know what this can mean to them financially. Recognising that customers want respect and equal treatment, some brands are now waking up to this and promoting benefits for retention, not just acquisition.
For example, Avis (famous for ‘trying harder’) has operationalised the way they collect, review, and respond to NPS, closing the loop on customer feedback. Their case management system ensures that every station manager discovers the root cause of detractor scores and resolves the issue with the customer. This information is then fed back centrally so that learnings can be applied across the business.
It’s time to deliver on promises
There’s another dimension you need to consider, too. Are your brand promises (implied or overt) carried through into the actual customer experiences that your company delivers? Closing any gaps to ensure full alignment will take you a long way into protecting your marketing share, and delivering business performance that will overtake your rivals.
You don’t need us to tell you that it’s vital for every business to operationalise and embed best practice CX. But rather than tackling everything at once, we recommend brands to focus on what matters most, in terms of both customer satisfaction and profitability.
Knowing how much your bottom line will go up by, when you make certain things better (or even right in the first place) should be an essential precursor to your CX optimisation strategy. This will enable you to deliver that ‘better service’, that rise in customer retention, and achieve that all-important increase in NPS.