What do you know today that was unknown to everyone a year ago? In an immature field like Customer Experience Management, there are plenty of new things to discover! When I’m writing, presenting, teaching, and discussing customer experience (CX), I often realize a new CX truth. Here is the first part of 24 superior CXM approaches I’ve shared over the past 12 months:
Customer Experience Value
1. Customer Service (CS) is a value center, not a cost center or revenue center.
Why do you have a contact center? To turn around potential churn! (And negative word-of-mouth and potential lawsuits.) Therefore, report to executives the value of customers you helped who were initially frustrated and who were then calmed by your conversation.
Without your help, their purchases were likely to discontinue. Further, you likely stopped or reduced their sharing of negative word-of-mouth. In some firms, the value of turned-around customers may exceed the value of new customers acquired. Inform your executive team monthly of how much customer value you rescued.
By recognizing value rescued, and following the advice below, your executives should stop the practice of up-selling and cross-selling when customers call about a frustration. It’s unnatural and it’s the opposite of building relationship strength with customers, which is the foundation of maximum lifetime value.
2. Customer Service has extensive untapped value.
When customers contact you, they say: “I was trying to do X, but Y happened, and Z is my consequence.” Wow! What a treasure trove of insights for every department across your enterprise. These insights provide much more detail than you get through surveys and other sources. What a tragedy when this rich information is not data-mined!
Start collecting and sharing these insights with every department, growth effort and cost containment effort. Unless you inform them about how they’re contributing to what bothers customers, they’re oblivious about the burdens they put on Customer Service. When you inform them about customers’ wish lists, this is inspirational for every department to innovate value for customers and investors.
3. 9700% CXM ROI is possible for everyone.
Why report the same top issues month after month? You’ll be pleasantly surprised when you compare the value versus cost of eradicating prevalent issues.
When you investigate the cost of eradicating the root causes of a prevalent issue, then compare that to the costs of resolving each customer request about that issue, along with remedies, incentives, credits, returns, and churn caused by the issue, and technologies for managing the issue. If possible, add to this the cost of extra Marketing and Sales budget needed to overcome churn and customer distrust (longer sales cycle) due to negative word-of-mouth about the issue.
As you can see from this example, estimates (ballpark figures) are sufficient because the CX ROI is so huge.
4. Greatest CXM savings come from pebbles.
For CXM savings, avoid assuming your best options are technology, offshoring, and cutting corners. Instead, put an end to what’s bothering customers. When you permanently remove a pebble from all customers’ shoes, you create massive wins — not just quick wins.
As the ROI example above proves, this is your best path to indispensable and indisputable CXM ROI. Everyone wins: gigantic budget is freed-up to avoid austerity, inflation, and shrinkflation. Always remember for buy-in and proving value, everyone wants more budget for salary increases, profit sharing, hiring, and project funding.
Pebbles are forever unless you eradicate their root causes, and therefore, pebble-free freed-up budget is forever. These are ongoing gains that I call Experience Management Annuities.
Best of all, revenue increases significantly by permanently removing customers’ pebbles. Indeed, customers are freed-up to do more, and your people and resources are freed-up to do more. In fact, 300% more revenue is possible by reducing negative word-of-mouth in comparison to revenue gains from increasing recommendations.
Conclusion — Part 1
These 4 Customer Experience Value concepts are powerful!
Imagine how things will be better when every company adopts these practices:
- Executives will triple their appreciation of Customer Service.
- Pressure for cost cutting will be reduced for Customer Service.
- Managers in every department will be aware of their ripple-effect on customers and cost to serve them.
- Every area of your firm will be inspired by customer insights, improving their performance and value-add.
- Artificial intelligence will be smarter as you data-mine Customer Service conversations.
- Your top issues list will change more often, as you eradicate prevalent issues.
- Customer experience maturity will increase as you expand outside-in focus across your company culture.
- Gigantic savings will expand budget available for every department or for special growth opportunities.
- Your firm will stand out from the crowd by avoiding austerity, inflation, and shrinkflation.
- Customers will have more time to be productive in their business and life.
- Brand preference will be magnetic for existing and new customers — and partners and employees — as ease of doing business skyrockets.
- Revenue will grow higher due to significant reductions in negative word-of-mouth.
- Revenue gains will increase thanks to CX-inspired efforts across your enterprise.
Stay tuned for the next sections of this article: 2024 CX is Smarter for:
- Customer Experience Metrics
- Customer Experience + Employee Experience
- Customer Experience Strategy
My advice this year started with 23 Customer Experience Practices You Should Stop in 2023. What have you stopped and what have you started this year to make your CXM smarter now?
This article is an expanded revision of the original LinkedIn article: “23 Ways CXM is Smarter Now (ICYMI)“.