Benefits of Customer Experience Management
Benefits of Customer Experience Management
Bhavish Aggarwal, founder of Ola Cabs said “Our focus is on our customers and improving their experience. We believe that if we do that well, competition, prices and profits will take care of themselves.” In other words, Bhavish believes that customer experience management is the key to Ola’s success. Ola, as well as many other winning experience brands have reaped immense benefits through this same customer centric approach. In this article, we’ll explore what those proven benefits are, and how they can apply to you and your company.
The Basics of Customer Experience Management
Customer experience management analyzes the overall customer experience by collecting granular behavioral data and direct feedback. It looks at how we can fine-tune the customer experience to create an emotional connection between a brand and it’s customers.
The objectives of a strong customer experience management strategy is to:
- Optimize customer interactions with a brand
- Foster customer conversion and retention
- Improve brand image
- Increase revenue/reduce costs
The basic functions are to oversee customer interactions at every touchpoint, gather experiential data to better understand customer perception and to bake customer centricity into a company’s culture.
CEM knowledge a little rusty? Read this first.
The Value of Customer Experience Management
Let’s talk benefits. There are many proven and tangible benefits of having a strong customer experience management strategy in place. Here are the results you could see when you invest in optimizing experience…
Strengthen Brand Preference
Do you ever visit a friend or family member’s house to find that they consistently have the same brands? Maybe it’s the long standing shampoo brand your parents never steer away from, the same brand of cookie your grandma always has, or the one brand of coffee your friend will never fail to have on hand… That’s brand preference.
In the context of experience brands, this may look like a person’s loyalty to Ola over Uber, flying with the same airline every time, or only shopping at one chain of grocery stores.
Maintaining brand preference is crucial to staying competitive. When you focus on customer experience management, you help create an experience that drives customer loyalty through personalization and emotional connection. This results in repeat customers, improved customer retention and stronger brand equity.
Personalize the customer experience
Let’s start by looking at a heart-warming example of personalized customer experience:
The level of service that David Nay experienced when he lost his beloved Reggie is the gold-standard for personalization. But it wouldn’t have been possible without strong customer experience management strategies in place. As we can see from David’s experience, when you use customer feedback to tailor experiences, you secure retention and loyalty.
David said it himself: “It's so sad to say goodbye to Reggie and it will take some time to move past our family's loss. But when the time comes to get a new dog, you'd better believe I'll be shopping exclusively at Chewy.”
A personalized experience, informed by first-party data, provides a competitive edge to any brand.
Improve Customer Loyalty
Customers no longer stay loyal due to price or products, but rather the experience they receive.
When you effectively use behavioural data to understand what matters the most to your customers, and deliver on that every time, in every location with every customer — you create customer loyalty.
The step that comes before customer experience and loyalty? Find out here.
Loyal customers add value to your brand through driving repeat business, becoming brand advocates and providing valuable feedback.
Better Customer Engagement
Think of your favourite TV show. What’s the next best thing other than watching it?
Talking about it.
When you’re engaged with something, you’re more likely to want to talk about it - what you like about it, what you didn’t like, your favourite parts and everything else in between.
The same goes for customers and experience brands. When you provide better, more personalized experiences for your customers, they become more willing to talk and share their needs with you. A huge benefit to your business.
You can then leverage customer engagement to continuously improve your experience, and stay on top of customers needs. It’s a happy cycle that continues to benefit your customers, and your bottom line.
Effective customer relationship management finds the loopholes that lead to customer churn.
Churn refers to the rate of attrition or rate at which a customer stops doing business with an entity. Churn is usually measured by reviewing the percentage of subscribers who discontinue their subscriptions within a given time frame.
For example, if you start the quarter with 500 customers and end with 475, your churn rate would be 5%, as you lost 5% of your customers. The reason a business should work on reducing churn is because the cost of acquiring a customer costs 5x more than retaining one.
With this in mind, it’s integral to the success of your business to understand what makes your customers happy. Happy customers are customers who will continue to come back.
With a strong customer experience management strategy in place, you’re able to streamline budgets and improve resource allocation.
CEM helps you to:
- Measure the success of initiates
- Reduce customer acquisition costs
- Use data to drive decision making
- Improve ROI
Customer relationship management also helps fuel organic marketing. When customers receive experiences that resonate, it drives invaluable world of mouth marketing and creating positive service reviews and feedback.
Improve Crisis Management
The best way to improve crisis management? Prevent it. A brand that has a strong relationship with its customers is better placed if/when things go pear shaped. When customers feel valued and have a high level of trust for a brand, it means they’re more likely to go to a brand first with complaints as opposed to a viral social media frenzy (a.k.a everyone’s worst nightmare).
Furthermore, when you zoom in on and nurture customer experience, you inherently reduce the possibility of crisis as you have a thorough understanding of the interactions that take place at every touch point in the customer journey. This invaluable oversight helps you mitigate risks.
Finally, good brand reputation affects the bottom line. It lowers marketing costs, increases customer conversion and supports brand recognition.
Strengthen Company Culture
Boardroom executives may know what’s most important to their customers, but if the whole team, including the frontline, aren't supported to deliver on that service promise, you won’t go far.
When a brand bakes customer centricity into their culture, everyone wins. Customers have better experiences, the frontline workers feel more empowered in their work and the business experiences growth.
Coaching platforms can help your team that puts customer experience at its center. This improves customer value through:
- Deepening employees’ connection to their work
- Improving customer service
- Aligning team with company mission
- Improving understanding of customer needs
Boost the Bottom Line
86% of customers are willing to pay more for a better experience. Think about that for a moment. In a saturated market comparing apples to apples, the experience you deliver is what sets you apart. So it makes sense to invest in a strategy and management process that allows you to deliver on your service promise every time.
Take a look at Houwzer, for example, a modern, socially responsible real estate and mortgage brokerage for savvy homeowners. After improving their customer experience management through frontline coaching, Houwzer was able to create a referral pipeline with a revenue impact of $225,000 in the first 60 days. Yes, that’s just two months.
Reap the Benefits of Investing in Customer Experience
As you can see, when you invest in customer relationship management, benefits start coming out of your ears. Just like any relationship, the more you put into it, the more you get out of it. Strong customer relationship management improves customer loyalty, decreases churn and in turn boosts the bottom line.
Want to know where the future of customer experience management is headed? Click here to find out.