Don’t rely on NPS, drive profitability directly from your customer experience management program


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Customer Experience Management (CEM) programs often struggle to justify their existence, with business cases based on the premise that satisfied customers or brand advocates spend more.

Proving the irrefutable link between improvements in measures like NPS and CSAT and improved profitability can be tough, especially in large organisations with multiple customer experience initiatives in flight at the same time. For existing customers, retention is difficult to measure as often we don’t know that a customer is at risk in the first place.

Don’t despair just yet though because there is global research which found that “…81% of… [companies] who have seen a significant increase in profits have a CEM program in place.” It’s also a widely acknowledged fact that retaining customers is cheaper than acquiring new ones. When was the last time that you got a phone call or email out of the blue a month before the end of your mobile phone contract or in the lead up to an annual financial planning meeting with your financial advisor?

A successful CEM program should focus on customer experience enhancements or fixes that will result in improved profitability, advocacy and satisfaction results. This blog considers three ways to do this.

Understand the customer’s context

A story I heard recently illustrates this perfectly. The organisation wanted to increase the frequency of customer visits and spend per visit. The graph below tells us that the key to achieving this was understanding the link between a perceptive measure (customer satisfaction), an operational measure (frequency of visit) and an outcome measure ($ spend).

David blog graph

The graph also tells us that there is a threshold where this starts to happen. Investment was focused on what customers just below this threshold told them they wanted on social media, in complaints and in verbatim comments from customer surveys. Needless to say that because issues these specific customers encountered were resolved and ways to delight them introduced, the program was a huge success.

Understand cause and effect

Use a customer experience model as the basis for the CEM program. This contains your customer journeys, complete with steps and touchpoints where each step can be completed.

Operational data (e.g. from your CRM, billing or contact centre platform), perceptive data (e.g. customer verbatim feedback) and outcome data (e.g. sales results) is then mapped to the relevant point in the customer experience. This gives us context so that we can understand the impact on a customer. It also gives traceability between a service failure at a specific point of a customer journey conducted through one interaction channel and the impact it had on a brand measure (e.g. NPS). This gives you cause and effect between a systemic issue and a brand level measure.

Give customers what they want

Only ask for feedback at points where you know there’s a problem or where a customer can be at risk of churn and real time. This makes managing the response to feedback more achievable.

Insight into what’s happening at a specific point in a customer experience needs to get to the people who can act on it in real time. Once we understand the context of a situation and the impact for specific customers, you can pre-emptively engage with them to give them what they want. This way service recovery can happen before a customer has tried multiple times to resolve their query or complete their transaction.

Using this approach ensures that customer retention doesn’t become an issue because we’ve identified the problem and resolved it to the customer’s satisfaction.

Understanding the customer’s context at a specific point in time can also help to identify opportunities for cross sell or up sell. Customers still don’t expect to get an issue resolved after leaving negative feedback so reaching out to them is typically a very positive conversation and opens up the possibility to offer additional products or services.

Follow these three suggestions and the profitability results will speak for themselves.

Republished with author's permission from original post.

David Johnson
David is an experienced management and technology consultant specialising in major customer-centred programs of change with a speciality in contact centre transformation and design. He leads our Contact Centre services practice. David has led numerous initiatives that have delivered significant improvements to his client's business results.


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