Doing well by doing good. Some marketers would dismiss the notion as wishy-washy. But in today’s era of customer engagement, a company that is perceived as treating employees well and caring about social issues is much more likely to have loyal customers. And loyalty is vital: a 2% increase in customer retention has the same effect as decreasing costs by 10%. Although customers these days are less loyal than ever (witness the rapid downfall of Nokia), they will develop an intense loyalty to up to five brands that they feel emotionally attached to. Often these brands have a well-publicized social responsibility program: e.g. Ben & Jerry’s or Lululemon. In other words, doing good helps your company do well.
Is it possible to measure something as seemingly subjective as customer experience? In this week’s CX Buzz, several authors argue that you can and should. Because customer experience has real, tangible effects on the bottom line, you must implement benchmarks and processes to ensure you are on the right track. One way is to simply ask your customers, through Voice of the Customer programs. Another way is to measure the non-resolution rate, as Amazon does. Whatever benchmarks you adopt, it is important to make consistent progress, one step at a time.
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Many organizations have a VoC program that measures Customer Satisfaction or Net Promoter Score, and those organizations that listen and act on the voice of their customers often see great improvement in these KPI’s. I would expect to see a movement of between 10 to 20 points in these KPI’s in the first year of a fully functioning VoC program. Yes, this is a typical improvement I see or a target I set with my customers in Year 1.
Your peers are using compensation and commission technology to crunch the numbers and guide growth.
When your organization first rolled out incentive, compensation and commission technology it produced a burst of value. Over-payments all but disappeared. You modeled plans with greater agility and precision. But over time, the marginal benefit has declined—the ROI hit a plateau.
Did you know that 98 percent of CX professionals agree that it’s a great profession to be in? That’s an interesting tidbit I learned this past CX Day. Personally, I’m not surprised. When you spend your days figuring out how to make customers happy, the positive karma has a way of rubbing off.
Call it karma, just desserts or whatever goes around comes around, but companies that treat their customers well, will see benefits to the bottom line. This is the common thread in this week’s picks for CX Buzz of the Week. As Jon Picoult of Watermark Consulting puts it: “It’s not a perfect correlation. There are plenty of instances where you have companies in monopolistic industries that turn profits for awhile, even though they don’t deliver the best experience.
They say it’s never a good idea to compare yourself to others. Except in business, that is. Every CEO worth their salt must be familiar with the market and know their competitive advantage. In today’s “age of the customer,” that advantage is knowing your customer and delivering the best possible customer experience. And in order to do that, you need to know what your competitors are doing.
In the words of Buffalo Springfield, “something’s happening here, but what it is ain’t exactly clear.”
In the world of customer experience, the winds of change are certainly blowing. There seems to be a shared consensus that traditional customer experience is making way for something else: digital customer experience. But how this will play out and what it means is subject to interpretation.
When P. Joseph Pine and James Gilmore wrote their now famous Harvard Business Review article in 1998, “Welcome to the Experience Economy,” they launched the marketing sub-expertise known as customer experience. At the time, Pine and Gilmore’s great insight was that in an increasingly commoditized marketplace, what differentiates one company from another is the quality of their customers’ experiences.
In any relationship, the person with more and better options outside the relationship has greater power within the relationship. This holds true in personal relationships as it does between customers and companies. This week’s CX Buzz is all about the shifting balance of power between customers and companies. In the age of the Internet, customers have nearly endless options, and companies have to compete harder than ever before to attract them. What this means is the onus is now on companies to stand out from the crowd. Here are some helpful ideas for doing just that.
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