3 ways customer experience management increases revenue and growth

When we are taking the role of a customer, it is easy for us to perceive the value of a customer experience.  However, if you are an entrepreneur, business owner or marketing manager and need to invest a significant amount of capital; you may also need to make some organisational changes in order to offer a superior customer experience. Often it is unclear the impact of the investment in the overall experience and the way this experience will actually generate a return in revenue over the short, medium and long term.  But some of us need to measure this for proof of concept to implement a customer experience management service in the first place, or simply to show our boss that part of our role is relevant.

Learn more: The Common Pitfalls of Customer Experience Management

Businesses gain increased spend from existing opportunities

In 2014, Forrester Research, determined the annual impact of customer experience across hospitality and fitness industries accounts for US$6.8 billion in North America. To reach some of this additional revenue it is important to offer great customer experiences in order to retain your customers, getting them to spend more with you and also making them Promoters of your brand.

Using the NPS® metric, fitness club promoters are more likely to spend 2.5x more on a lifetime basis increasing their annual spending by 46% and 17% of them were more likely to renew their gym membership than the detractors. Happier, loyal customers are more likely to acquire additional services, such as personal training within the fitness industry.

In the hospitality industry, the impact of customer experience is quite significant, guests who score 10 on their guest experience show 113% likelihood of returning the following year.

Three steps needed to increase revenue with customer experience:

1. Painpoint Reduction

Within the customer’s journey, there might be some moments where feelings of tension or frustration may be experienced also known as “pain points”. These “pain points” represent higher risks for your organisation if they are not managed carefully.  Operational efficiency and systemic improvement within your organisation might help to mitigate these risks.

Four main areas where pain points may impact your business:

• Customer satisfaction and churn: Pain points have a negative impact on customer satisfaction, they contribute to increase churn.
• Cost of support: Customers in pain become more costly to maintain and they require more support. However, carrying them over and maintaining them is essential to stay on business.
• Cost of attracting new businesses: It is always more costly to attract, entice and bring on board new customers than retain the current ones. Getting referrals from our existing customers saves us the cost of acquisition.
• Increase in spend from existing opportunities: Increasing retention rates by 5% may have a positive impact on profit levels increasing them from 25% to 95%.

How to address pain points?

• Create a journey map: Create a map of your customer’s journey identifying all the potential touch points and also selecting the ones that are pain points.
• Look for trends in customer feedback and behaviour:  Identify what the key issues are and develop some specific actions to address them. Look for trends and the relation that may exist between pain points and the change of behaviour between customers.
• Run A/B test experience improvements: Choose a small sample of your customers and test some of the solution initiatives before implementing them into a larger scale.

2. Closing the Loop

When managing meaningful experiences with customers, it’s important that they take part on the experience by having their say. This action involves opening a loop and creates a space for capturing valuable feedback. Acknowledging the customer and rewarding their loyalty is as important as being aware of what areas need improvement. You can make this possible by closing the loop in order to nurture and preserve the relationship.

So how do we close the loop?

• Customer recovery: When dealing with challenging situations with our customers, the loop is opened. Closing the loop is critical in order to create respect and rapport with our customers.
• The lifetime value of customers:  Lifetime value can be measured by the amount of revenue you receive from an existing customer over the lifetime of the relationship. Closing the loop with happy customer makes them feel valuable and strengthens the relationship. Perceptive's Customer Monitor's customer experience management service highlights all of your Most At Risk Customers (MARCs) on a daily basis allowing you to engage with Detractors, retain the relationship and protect this lifetime value.
• Employee engagement and empowerment: Encouraging our staff to close the loop with our customers is essential for building trust and creating empathy. This behaviour will be translated into positive word of mouth and repeated business.
• Break the silence: Stay in contact with your customers periodically, break the silence and get them to share their views and expectations.

3. Mobilised Organisation

Providing positive experiences to customers is a shared responsibility that may involve every employee within the business. That’s why Senior Management should walk the talk  and engage with their staff sharing: the mission, vision, goals, the importance of building positive relationships with customers and capturing their feedback.

So, how can you walk the talk to your staff?

One approach could be developing a clear view of the quality expected of customer service, identify what are the best practices within the industry, elaborate a SWOT analysis within teams, creating a path for improvement and putting metrics in place to measure performance on a time frame basis.

To motivate your staff it's important to first introduce some understanding, that they are the key influencers within a customer interaction. By acknowledging the importance of their role and the direct impact this has on creating revenue and retaining the customer within the business, will empower them to make a difference. It also essential to reward the employees who are able to create positive interactions with customers to promote positive behaviour..

So, how can I drive this change?

• Share feedback widely: Involve your staff with the feedback received from customers and the financial metrics used. Being clear and honest with your staff helps to build trust and getting them involved with your mission.
• Leverage your leaders: Identify within your business influential, admired individuals and charismatic leaders.  Bring them on board, empower them, and make them involved in the process of communicating these view and ideas to their fellow colleagues.
• Put customers first: Evaluate your activities on a daily basis and include your customer when setting goals and evaluating priorities.
• Drive cultural change: Take into account that making everyone in the business customer focused is not an easy task and it does not happen over night. It requires full involvement of Senior Management and staff, as well as time and effort on gaining buy in from people and the adequate actions and behaviours in order to obtain positive results implementing the change.