How can you convince number-focused stakeholders that Customer Experience Management (CXM) is the way to go when you don’t have the proof of CXM’s returns in your organisation yet? To make it easy, we’ve summarized the numbers from some prominent research. In just four sentences.
As a CX professional, you’ll know that an enjoyable Customer Journey will lead to more enthusiastic customers and will add value for your business. A win-win. But how can you prove this if you don’t have the numbers to support this yet?
Sometimes you’ll find yourself in a chicken-and-egg situation. Without an attractive business case, it can be hard to secure the necessary budget and resources. But without these resources, it can be difficult to create a business case.
In addition to some strong persuasive skills, you’ll often need some rock-solid numbers in order to get started. So next time, you can present a strong business case from your own organisation.
With this short summary of the business case of Customer Experience Management, you’re able to get started.
The ROI of Customer Experience Management in just 4 sentences:
1. By structurally improving the Customer Experience, you’re able to organize customer contact efficiently and effectively, lowering costs by as much as 20%.
2. Revenue can be increased by 15%, by increasing both the retention- and the acquisition rate.
3. It will become easier and more pleasant for teams to collaborate, which works as an accelerant for the first two points.
4. The resources required to evaluate the organisation from a customer perspective and identifying the right adjustments are the only initial costs.
The returns of Customer Experience Management are made up of a few different aspects. Investing in Customer Experience can lower costs and increase revenue, as well as lead to more invested employees. Employee involvement can cause further increases in revenue and reduction of costs.
Enthusiastic and satisfied customers lead to more revenue
Numerous studies (Forrester Consulting, 2018 & Temkin Group, 2018 for example) have found a strong correlation between repeat purchase intention and a positive Customer Experience. Research from the Temkin Group even says satisfied customers buy from the same organisation again in 81% of cases. There is also a higher willingness to try out new products and services.
In addition to this, happy customers are more likely to recommend your organisation to others. A powerful and often overlooked effect in Customer Experience Management, because recommendations are an important part of both B2C and B2B purchase processes.
A commonly used method to measure this intention is the relational Net Promoter Score (NPS). Maybe this metric is already being measured within your organisation and you therefore already have insights into your customer’s recommendation intention. Intention isn’t an actual recommendation of course, so make sure to measure the number of customers that actually made a recommendation.
There are multiple examples of the way a well-designed Customer Journey design can lower costs (Forrester Consulting, 2018 & Temkin Group, 2018). The connection between an efficient process and fewer questions, complaints, and a faster solution to problems is easy to make. But in addition to these cost-saving benefits, other costs, like acquisition costs for new customers can also be lowered by a great Customer Experience.
We also discovered some cost-reducing quick wins during our Customer Journey projects. An example we’ve seen a few times now is the struggle your employees and customers are facing when searching for knowledge base articles. Or the provided information might not be as clear as you anticipated. Some information might even be unnecessary or confusing at a certain point in the Customer Journey. During a project, we’ve split an information letter that was hardly ever being read into a postcard first and later on a letter with additional information. Customers were more prepared for the additional information, which lowered the amount of customer contact and improved the NPS.
Better collaboration and more involved employees as an accelerant
Customer Experience can be a connecting factor within your organisation. Without customers, there is no business. Customer Journey Mapping can help strengthen this realisation. By using a clear methodology to visualize the current Customer Journey, with a multi-disciplinary team ánd your customer, you can generate employee involvement and mutual understanding.
Across channels and products, you’ll gain insights into the way your customer experiences your organisation.
The strength of diversity (of different disciplines) within your organisation is being used to its fullest in this case. And because you’re speaking from the same customer perspective, conversations can be more effective. This approach breaks silos within organisations. An impact that can not be underestimated, even áfter a Customer Journey project. Collaboration is easy and more efficient, which is a key accelerant to lower costs and increase revenue.
With these resources, we hope you can create a business case that’ll help you get the resources you need to begin improving Customer Experience. Once you’ve passed that hurdle, it’s time to prove the added value by creating a business case specific to your organisation.
A few interesting sources:
PWC 2020 report: A strong Customer Experience can lead to a ‘price premium’, customers are willing to pay up to 16% more for products and services.
Mckinsey 2014: 90% is willing to pay more for a great experience,10% is even willing to pay 50% more. 80% of companies only invested around 20% into CX.
McKinsey 2016: Customer Experience: Creating value through transforming Customer Journeys
Forrester Consulting commissioned Adobe, 2018: Business Impact of CX. : Experience-oriented organisations set themselves apart in the discover and awareness stages, which could decrease acquisition costs.
Adobe 2020: omnichannel customer engagement strategies lead to a 10% growth year over year, 10% increase in average order value, and a 25% increase in sales conversion.
Temkin Group: ROI of Customer Experience, 2018. Satisfied customers purchase again from the same company 81% of the time.
Qualtrics: 71% of CX leaders say CX investments positively affect their financial results, 61% perform noticeably better.
Want to learn more about Customer Experience Management, Customer Journey Management of you want a demo of the Milkymap platform? Get in touch. You can plan a free 30-minute demo here.