How a People-Centric CX Strategy Drives Customer Retention

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All companies want to build products and deliver support that delights customers. But there’s often a disconnect between what business leaders think customers want and what customers actually need. Using intuition or instinct to guess what customers need rarely works.

Many businesses do just that, since about 85% of new products in the U.S. fail due to inadequate customer research. But it’s not just a product development issue. Customer retention is how most companies succeed over the long haul since acquiring a new customer costs five times as much as retaining one. To acquire and retain customers, organizations need to adopt a new way of doing business that is built around the customer experience. Companies that don’t will eventually see their customers move toward competitors who do.

Creating a people-centric customer experience requires a mindset change throughout the company. It entails a cultural transformation, but it’s worth the effort. Here’s a look at what a people-centric customer experience strategy is, how this approach helps companies succeed and what it takes to ensure a better customer experience (CX) across every touchpoint.

Developing Empathy for Customers Is the First Step

Building a people-centric CX culture requires empathy gained from a deeper understanding of customers’ goals, needs and pain points. However, embedding empathy into the culture requires reorienting the entire organization toward customers. So, instead of being a sales- or product-driven company, your organization becomes focused on creating a people-centric CX as a foundational value.

Once you ingrain that value in the organizational culture, the business strategy becomes more people-centric because the culture perpetuates the value. Empathy is the first step and can be achieved through programs that ensure employees deeply understand and identify with customer needs and know what they can do within the scope of their jobs to satisfy customers.

Initiatives that bring employees closer to customers can help your team achieve a higher level of customer empathy, such as programs that allow cross-functional groups to listen to customer support calls. Broader access to customer research and other data that gives employees insight into customer needs and the problems your company’s products are trying to solve is critical.

Moving from Insights to Action

It’s important to share empathy-building insights and democratize relevant customer research and data across all departments. Employees need to understand what customers are trying to accomplish, how they complete tasks and why they use your product. But insight alone isn’t enough — to effect real change, insight has to be linked to your company culture and acted upon in specific ways.

For example, once there’s a broad understanding of customer challenges within a department, leaders can develop a strategy that addresses those challenges to improve customer satisfaction. The actions leaders take to improve the CX will vary by department, but every business unit leader can use customer insights to develop objectives and key results (OKRs) to move the needle on customer satisfaction.

Tying customer outcomes to business goals and compensation is also crucial. When everyone is rowing in the same direction — informed by insight, engaged in activities that improve the CX and held accountable via measurable objectives and rewards for activities that increase customer satisfaction — that’s when the culture truly begins to change.

Creating Feedback Loops That Drive Retention

Keep in mind that you can’t create a people-centric CX with a one-off exercise. It requires cultural change precisely because it’s a new way of doing business that is focused on continuously improving customer satisfaction. That work never ends because customer needs and expectations change over time, so products and supporting services must evolve too. Customer research and feedback continues for the entire product lifecycle.

Instead of developing products based on intuition, a people-centric CX design process incorporates customer insights in every facet of the product development process. Product teams keep gathering insights throughout the process and iterate within an agile framework to move the customer satisfaction needle, incrementally building new products or optimizing existing ones.

Benchmarking the current product’s UX can help establish a baseline to drive continuous improvement. For instance, if a product let customers complete a task in five minutes, shortening that time to two minutes or less is a massive efficiency gain for the customer. Feedback loops that improve the experience at specific points like that accumulate to support customer retention by improving the experience overall.

Investing in People-Centric CX at All Touchpoints

Improving the customers’ end-to-end experience with a people-centric approach isn’t a job for a single department; there’s an opportunity to gain and operationalize customer insights and continuously iterate and improve the CX at every touchpoint. Product, engineering, customer support, marketing, sales and any other area of operations where customers interact with the company must be involved.

Research shows that on average, every dollar that’s invested in the user experience brings in $100, which is an enormous ROI of 9,900%. What company doesn’t want an ROI boost like that, regardless of the economic climate? That’s why investing in a people-centric CX is critical for your business and why it’s incredibly important to develop a pervasive people-centric CX culture.

When you create a culture that focuses on understanding customer needs and pain points, build an iterative process to collect and democratize insights and apply them on ongoing basis, you can consistently deliver high-quality products and experiences that genuinely make users’ lives easier. That can elevate customer acquisition and retention in any economic climate.

Sara Portell
Sara Portell is VP of User Experience at Unit4. Sara is a user experience leader with a broad international experience in Tech and eCommerce (B2B and B2C). She has focused on building user-centric products and experiences for global organizations and start-ups since 2009. She is passionate about systematically understanding people’s motivations, needs, and behaviors, aiming to improve the user experience to deliver world-class products.

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