Still haven’t wondered why leading companies invest in experience?
Invest in experience. Achieve growth and profitability.
The study conducted by consulting firm BCG with the Customer Experience Association shows the following statistic:
“Companies that provide the best experience to their customers grow between 8 and 26 percentage points more than those that do worse.”
This is mainly due to 3 major factors:
- They improve customer retention in their company.
- They favor customer loyalty to the brand.
- Improve their recommendation levels.
You need to direct customer experience investments towards what matters most to customers and has the highest return, which is critical, as we have seen, for growth and profitability.
How do you invest in experience?
First you must be clear about what matters to your customers about your brand, quality, price, service, etc. A company must dissect what matters to customers.
To do this it is essential to establish a short graduated list of the points and areas of improvement that have a high impact on customers as shown below:
The relationship between customer experience and growth.
The Boston Consulting Group has analyzed the relationship between customer experience and growth, basing its study on three variables whose impact on growth is key.
- Abandonment rate.
- Recommendation that leads to acquisition.
On the one hand, customers with a better experience generate more revenue. They are less likely to switch brands, thus reducing the abandonment rate. In addition, by recommending the company that has provided them with a good experience, they contribute to attracting new customers.
We must therefore focus on the most profitable customer satisfaction issues. Using analysis of their link to customer value, determine whether it would be more valuable to reduce the number of detractors or create more promoters.
Customer experience models.
We must build a model around what matters to customers, and the key is to analyze it in aggregate rather than in isolation.
End-to-end customer journeys, not individual touchpoints, are the unit of measurement when setting priorities for your customer experience investments. Experience performance is much more closely tied to financial results than touchpoints alone.
Sizing and prioritizing key areas for improvement leads to success in many cases.
Once you know which journeys to focus on, assemble a cross-functional team to look at potential initiatives to improve your performance. What pain points or opportunities will help differentiate your business? Where do we want to focus first?
Once we have listed the pain points, we need to assess the potential impact of each, using three metrics.
- Reduce the cost of service.
- Capture revenue and long-term loyalty.
- Improve overall satisfaction.
If we invest in experience, where else can we innovate?
First, we should focus on those important customer experience journeys where you have a big difference from competitors.
Second, examine your operational data for digital innovation opportunities. This is where customer experience measurement and management platforms like Allswers play an important role.
For example, customer experience personalization is a key factor in 3 out of 5 purchases. Keep reading our post on customer experience personalization to learn how to innovate your strategy.