The recent collapse of Silicon Valley Bank and First Republic shows how tough economic conditions are right now. Especially in the tech industry.
In tough economic conditions, cost-cutting becomes attractive. Customer experience (CX) teams are not immune from this. All the data suggests that cutting CX investment is detrimental to a business. In fact there is data that suggests that companies that invest in CX outperform the market. But the fact remains that some organizations cannot resist making cuts across the board in tough conditions. Sometimes those cuts will fall on the CX department.
So how can CX teams avoid this? The answer lies in proving ROI (Return On Investment).
But CX teams are not always great at this. In fact, 54% of CX pros told Forrester that they cannot prove the ROI of their projects.
This week we will look at how CX teams can prove that CX investment pays off.
How To Prove CX ROI Key Takeaways
- By pursuing a strategy of differentiation, CX teams help a company stand out from the competition
- CX teams should set customer retention rate goals, a customer loyalty goal and a customer LTV (Lifetime Value) goal and report them to senior management
- Quick cost reduction wins include implementing replicable CX processes and a virtual contact center
- Quick revenue protection measures include implementing a cart abandonment rate KPI in Ecommerce CX teams
- B2B CX teams can target ways to upsell to existing customers to protect revenue.
- CX teams can solve the easier problems digitally with support content. Leaving support staff to deal with more complex problems
- Invest in training CX teams with free data science courses
- Data science leads to quicker discovery of customer pain points
- It also shortens the time between identifying a pain point and taking action to fix it.
- CX teams can lead organizational optimization efforts
- This puts CX at the center of the company, showing true business value
Customer Experience ROI – Be Bold & Be Different
A lot of companies will take a safe approach with the experiences they offer in tough economic conditions.
They will try to appeal to everyone or, even worse, copy a competitor.
Neither of these approaches are effective during a recession. To stand out in a competitive landscape CX leaders should focus on differentiation.
This does seem counterintuitive. To an extent, it is. But the majority of companies will ask their CX teams to play it safe. By focusing on differentiated experiences, you get closer to the customers you want.
Pursuing a strategy of differentiation helps you focus on who your customers are, who they could be and what they want. This will help you serve the customers you have, increasing customer retention. Increasing customer retention will be a key target for most companies. Especially if they make the mistake of cutting acquisition costs.
Being differentiated helps you stand for something in the marketplace. You can provide something different to your competitors and increase customer loyalty. All things that are essential in tough times.
To sell the benefits of differentiation to C-level executives, CX teams need to emphasize the cost benefits.
Set a customer retention goal, a customer loyalty/retention goal and a customer LTV (Lifetime Value) goal. These numbers will help inform C-suite of the benefits of a differentiated CX strategy.
Customer Experience ROI – Lower Costs & Protect Revenue
While being bold and different is a great medium to long term strategy, CX teams also need quick wins.
They will need to identify areas where they can cut costs, But without affecting the experience they serve to customers.
But what is the best way to approach this?
One of the easiest ways to start cutting costs in CX is employee tools and processes. You can start by implementing replicable tools and processes. So your CX team can provide better experience fixes/improvements in far less time. Consolidating employee-facing tools can also help CX teams move faster.
Implementing a virtual contact center can also save costs. But getting rid of a human contact center completely can cause a lot of CX friction. So the answer could be cutting manual support hours down and implementing a better virtual out-of-hours support.
Simplifying customer transaction experiences are also a great way of protecting revenue. An Ecommerce CX team can even take on a cart abandonment rate KPI to help them measure and improve this.
In service models and in B2B, this will be different. CX teams working in SaaS and other service models can measure churn rate. B2B CX teams can target ways to upsell to existing customers to protect revenue.
Customer Experience ROI – Keep Customer Positivity, Even When Contact Centers Are Cut
As mentioned above, cutting customer support centers is a way of reducing costs. Even if it is a mistake, it is one that is attractive to most businesses.
Cutting customer service centers makes customers unhappy. It can destroy a connection that they have to a brand or service that they are loyal to. This is even more true in the B2B space. Cutting staff that deal with customers on a daily basis erodes the relationships that you have with those customers. It also has an impact on growth. According to Zendesk, “64% of business leaders say that customer service has a positive impact on their company’s growth”. When that service becomes degraded, that positivity stops.
Yet, if senior leadership does decide to cut customer service support, the CX team has to step up.
It is up to CX teams to try and keep the experience as positive as possible for the customer. If the worst happens and leadership cuts customer service staff. They can identify digital interactions that make the customer feel good. CX staff can also create conversational content to support customers, who may be going through tough times themselves. This is crucial in sectors like fintech, retail banking and insurance.
But companies will preserve some non-digital interactions. So CX teams can help the remaining customer services staff by removing barriers. They can solve the easier problems digitally, leaving support staff to deal with more complex problems.
Customer Experience ROI – Invest In Data Science Training
One way to prove the ROI of customer experience is to show how CX teams can innovate.
By becoming better at gathering, analyzing and interpreting data CX teams can not only identify opportunities for innovation. They can conduct experiments to show the value of those innovations to business leaders.
If a CX team has data science skills they can also better interpret the customer data they already have. This can lead to quicker discovery of customer pain points. It can also shorten the time between identifying a pain point and taking action to fix it.
Due to the economy hiring budgets will be tight. So bringing in a data scientist to work on CX might be beyond most organizations. But there are many free training courses, like this one from Udacity, that CX teams can take to enhance their own data skills.
Having increased data skills within a CX team will make reporting insights to leadership easier. This will only enhance a CX team’s capacity to prove ROI.
Customer Experience ROI – Be Team Players
Tough economic conditions tend to breed restructuring exercises and layoffs.
There are many opportunities within an organization for CX teams to step in. Beyond their usual CX work.
That is because CX skills are transferable.
CX teams have journey mapping skills that can improve workflows and increase efficiency. They can increase collaboration across teams and cut silos that act as barriers. CX pros can help create better employee experience flows. Helping the business keep key staff.
Customer experience is all about looking at customer behavior. So they can help product teams with new launches. They can help marketing teams develop better personas. The crossover opportunities within an organization are almost limitless.
Taking on these activities puts CX teams at the center of organizational optimization. This is another opportunity for CX pros to show direct value to senior management.
CX teams can measure the success of these “out of pocket” initiatives. Organizational improvements will show increased efficiency and monetary savings. By helping create these improvements, CX teams show even more value.
CX leaders can use this to report to C-level leaders, again demonstrating customer experience ROI.
Talk to MAQE
Do you need CX help? Do you need a partner that combines customer experience knowledge with cutting-edge data science? Talk to MAQE. We have helped B2B, B2C and service companies increase ROI through offering better experiences. Get in touch via [email protected].