A great customer experience is no longer nice to have as customers today expect more than basic delivery of products and services. Many organizations are waking up to the reality of the power customers command in today's digitally empowered society and are investing in it. In this guide, we will discuss the true return on investment organizations stand to reap by ensuring a great customer experience. 

What is Customer Experience?

Before anything else, it helps to shed some light on what customer experience is as there has been a lot of buzz around the term. The customer experience (also called CX) is a comprehensive approach to product design. It covers everything from the first customer action to the last. 

The essence of your business is how customers, partners, and employees feel towards and personally experience your products and services. In other words, experience is one of the fundamental fields where market competition takes place. It encompasses every aspect of an offering, including customer care, advertising, ease of use, reliability, etc. 

It's easy to think that you have high-quality products and that you have a strong CX, but CX also focuses on feelings customers have about you based on interactions with your brand. At every touchpoint, you're either improving or destroying how customers feel about you, and these feelings impact their decision to keep coming back or not. 

What is Next in Customer Experience?

In the last decade, companies started consciously designing their workflows from a customer experience point of view. The next level in CX maturity is providing a seamlessly integrated customer experience through the entire customer life cycle. 

The idea is to provide an experience that is devoid of any mistakes, delays, or setbacks. In other words, the next in CX is ensuring that it is efficient, smooth, and enjoyable and that the quality of experience is consistent across all channels. 

Why does Customer Experience Matter?

A few companies may have gotten away with poor customer experience some decades ago, but a lot has changed in recent years. For example, customers today have the power, not the sellers. The multiplication of options to choose from as well as the availability of resources for customers to educate themselves has made it easy for customers to switch brands if they're not delighted. 

A variety of studies have shown that companies that successfully implement a customer experience strategy achieve higher rates, reduced churn, and increased revenue. One of these studies was conducted by the Temkin Group, which found that companies that earn $1 billion annually can expect to earn, on average, an additional $700 million within three years of investing in customer experience. 

Another study by American Express found that 86% of customers are willing to pay more for a better experience. In effect, this implies that providing more customer value is the best way to win the market competition. Therefore, leveraging customer data through the entire customer journey to optimize and customize workflows is the way to go for organizations looking for an edge over their competitors. 

Going further, a survey indicates that when customers have an emotional connection with a brand, consumers have a 306% higher lifetime value and are more likely to recommend to others (71% vs. 41%). The message is clear: every interaction is vital as it informs the perception of customers about your brand, and this can lead to lifelong loyalty to your brand. 

What are the General Benefits of a Great Customer Experience?

Many organizations still consider allocating time and resources for a good experience to be wasteful, but an improved customer experience can have a great impact on your business and organization. A great CX is key to transforming your brand, boosting revenue, and improving retention rates. Here are some key benefits to know:

1. Reduce the burden on call centers 

When customers are unhappy about your product or the ease of use or processes, they are likely to phone your call centers to lodge complaints. This can quickly increase the workload of your customer care department, which may further worsen their perception of your brand and also skyrocket support costs. A great customer experience helps to reduce the burden on call centers so a bulk of complaints can be resolved in self-service channels. 

2. Increase online transactions 

While some customers are willing to reach call centers to lodge their complaints, a significant number would rather go without dealing with the hassle of speaking with a customer care representative. 53% of American adults say they're likely to abandon their purchase if they're unable to quickly get an answer to their questions. They're going to get frustrated and perceive that as a bad experience. Improving CX provides the much-needed motivation for customers to complete their purchases, which also translates to more revenue. 

3. Increase online engagement rates and new user counts 

Every year, companies spend billions of dollars globally marketing, but a brand that invests in CX is also investing in a practically free marketing strategy. Ensuring the right experience leads to satisfied customers who will, in turn, promote your business for you and advocate for your brand and product. Thanks to technological advancements, when customers are satisfied with their experience, they have the potential to reach thousands of other potential consumers - all at zero cost. This also translates to higher engagement rates.

4. Ensure better retention rates 

In a world where there are many close substitutes for different products and services, a great CX can help increase customer loyalty and retention. It's an open secret that it costs five times more to attract new customers than to retain existing customers. Improving CX can help decrease the number of people that stop using your products, which also translates to a high retention rate. If your customer rate is high, it will also augment revenue and the profit rate. 

How Does the Future Look for Organizations?

CX used to be something business leaders talked about a lot but did relatively little about, but this is going to change in the coming months and years. The future of CX for organizations is one in which they would have to take consumer rising expectations of them seriously. As a result, organizations will need end-to-end solutions for providing an integrated customer experience through the entire customer life cycle. 

From the advertisement through e-commerce, CRM-based marketing automation, portal-based marketing automation, field services via mobile applications all the way to customer service. The need to invest in systems that underpin CX will become more pronounced and necessary to keep up and overtake the competition. 

How to Calculate CX ROI

Truth be told, ROI is easy to calculate for any investment that has immediate results, but it's not the same for CX, as it can take months to fully measure results. To calculate ROI, you will need to choose the CX metrics to measure. Here are some metrics commonly used:

1. Advertisement
2. eCommerce
3. CRM-based marketing automation
4. Portal-based marketing automation
5. Field services via mobile applications customer service

Here's how to calculate CX ROI:

1. Establish how much to invest in the metrics above
2. Build a timeline for CX investments
3. Build cost estimates for investments
4. Apply this formula to establish ROI = Returns on Investment - Cost of investment /Cost of investment x 100.

Conclusion

CX plays a fundamental role nowadays in revenue generation that can be simply measured and justified if you're interested in building a CX portal for your organization, MNDWRK is happy to help.