Nelson Pascua, Vice President of Client Services for Medallia, Inc., provides a succinct overview of how valuable understanding the customer’s experience is in his article “Top 5 ROI Benefits of Customer Experience Management.” Beyond Philosophy’s model is congruent with Pascau’s five points: streamlined customer experience management (CEM) creates return on investment (ROI) through customer retention, customer engagement, new customer acquisitions, employee engagement and a more cost-effective feedback system. Our list, however, includes a very important sixth point: cost savings.
Poor customer experiences cost money. In fact, we’ve always found ways for our clients to save money through good customer experience management.
For instance, when one of our utility company clients would receive a call at its call center, a field engineer would automatically be deployed to the customer’s location in order to assess and resolve the situation. It sounds great in theory, but the plan backfired. Many times, field engineers didn’t have the proper tools to solve the problem when they arrived. Initial visits required rebooking, which meant customers needed to take additional time off work. The frustration and disappointment of not having the problem solved the first time created stress for customers. The emotional toll was immense. Then there was the matter of the $200 cost for the utility to deploy the field engineer a second time.
The solution saved an average of $195 per repeat call. Rather than automatically deploying the field engineer, the call center representative spent more time diagnosing the problem over the phone. At that point, a well-prepared field engineer would arrive and do the job in one visit. The utility spent five dollars at the call center level, making the entire process less expensive and leaving customers genuinely happy.
Though the article often alludes to customer emotions — a business traveler “frustrated and angry” with a hotel, or the “wow” and “ouch” stories customers tell others — it never uses the word “emotion” or directly addresses the subconscious experience. We focus on customers’ emotional experiences, which account for more than half the typical customer experience. When we are working with clients we use proprietary research methods that help us evaluate the elements that drive value in a customer relationship.
Understanding customers’ emotional experiences ensures a solid ROI. A company that knows how its customers feel about their interactions is able to take a proactive approach to customer experience. Creating an emotionally satisfying first customer experience can eliminate the need to recover customers lost to negative experiences, like frustration and anger over slow service.
The old adage “any press is good press” isn’t true when it comes to customers. A customer who finds a sales representative too aggressive, or a call center’s automated system too impersonal, can easily make other customers apathetic to the company with their negative stories. Conversely, the capital expended to make a customer’s experience enjoyable — an unexpectedly quick response to an email or a salesperson that addresses them by name— is more likely to perpetually engage with the company and drive higher net promoter scores. Such happy customers will also freely advertise their wonderful experiences to other customers.
To guarantee ROI through customer experience, the entire company must understand the particular emotions of its customers. It is not just the duty of the sales agents and call center to take care of the customer; everyone up to and including the CEO must be fully committed to the customer experience. The entire business must be customer-centric.
Emotions drive our lives, so it is no surprise that emotions drive the customer. The company that understands these emotions has a sharp advantage over the competition, and the ROI an emotionally satisfied customer brings is well worth the small investment the company has to make to provide it.
