Over the years, we often hear “the customer is always right.” While “always” may not really be the case, companies are going out of their way to please customers to fuel business growth. This is especially true during Covid19 where social distancing is required and creating customer happiness is harder. Many companies have recently paused their business or shut down because customers stopped buying. On the contrary, many other brands are thriving because they’ve pivoted their business to online, and leveraging data to better meet customer expectations. (Read more about companies who’ve transitioned their strategies and lessons learned.)
Using customer insights to drive business decisions gives companies a competitive edge. While I have my own views on how to collect customer data and use the information to influence product development, market messaging, website design, and more, I became interested to hear from a financial leader to gain additional perspective. I connected with Howie Bick, the Founder of the Analyst Handbook to discuss the financial value of investing in customer experience. The following is a summary of our conversations:
Use Data from multi-sources
Howie and I discuss the importance of paying attention to customers’ needs and wants as they are rapidly changing. People want options and customization. They’re looking for products and services that are simple to use, easy to learn. and straightforward. The way to understand customer needs is using data that you already have and or go get from deploying customer surveys, focus groups, and other “voice of the customer” (VOC) methods. Examining your website analytics is beneficial too. Understanding for example, which pages people spend most of their time and where they abandon provides a wealth of information. The point is that both quantitative and qualitative data used together provide actionable insights to implement improvements so that customers can accomplish their goals, whether it be to find information, add to shopping cart or enter a credit card to complete a transaction. There’s no need to wonder where are customer “pain points.” In fact, we’re highly against guessing. The data is at your fingertips. Use it. Test different experiences. Analyze. Adjust. Repeat.
Why invest in Customer Experience…an analytical perspective
Howie explains from his financial background….
Company’s need customers to keep their business going. They are the ones who are the lifeblood, and the fuel to keep the business operating. The experiences they have, and the journeys they go on, play a significant role in whether they purchase, consumer, or abandon their carts. Companies want their visitors or potential customers to purchase. That’s how they’re able to generate revenue, it’s how they learn which areas need to be optimized, and it’s where you get insight into the sales process.
A better customer experience encourages higher conversion rates. Higher conversion rates mean more revenue per visitor, it means a higher percentage of visitors turn into customers, and it means more money for the company.
The easier the journey is to navigate for a customer, the less there going to be asking questions. The less they’ll have to figure out, and the less they’ll have to connect the dots on their own, which means less confusion, and fewer questions. Less questions and confusion mean less customer service inquires. That has the ability to reduce overhead requiring fewer customer service personnel or wasting valuable time on answering the customer queries.
A simple and easy customer experience encourages lower bounce rates. Meaning fewer potential customers will abandon their carts, and hopefully, more will decide to purchase.
The more friction that’s involved in the buying process, the more work people will have to do to buy. It might mean spending more time figuring out or learning about the company. It might mean learning about the terms or acronyms the company use. The harder it is for people to do something, the less likely it is for them to do it. Making the customer experience easy and straightforward will encourage more visitors and potential customers to purchase, sign up, or become a lead.
Happy customers can be incredibly valuable and meaningful to a company’s business. By having easy checkouts, smooth transactions, and seamless user experience you’re able to make customers happy. Happy customers can turn into great ambassadors for the company, refer friends or speak highly of the company, and be great for the company’s bottom line. The happier customers are with your company, the better news it is for the company.
Investing in a company’s customer experience is most often a significant upfront cost that might require a redesign or a realignment of processes, but after that, it’s done. You’re able to invest and upgrade the systems you have in place, and hopefully reap the benefits for years to come. All the customers or visitors you have in the future will experience a positive customer experience, and hopefully have pleasant customer journeys.”
While there’s a business cost (resources, tools, technology) to create best in class customer experiences, the investment IS WORTH IT in the long run. When CX is done right, brands end up with loyal customers who buy again and tell others. That’s when the magic and return on experience (ROE) happens.
increase your knowledge About The Value of CX Investments
- Read more from Howie about what business analysts do to optimize processes, systems, and structures to achieve profitable outcomes.
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- Get CX Certified at a reputable university where you’ll learn how to calculate Return on Investment, justify CX costs to company leaders, and more. Course info HERE.