7 “BIGGEST” Reasons Why CXM Matters
Let me put forward a basic, yet an important question: What is Customer Experience?
Anyone who is in the business where their customers are dealing with products and services, can have different answers to this question. However, differences of opinion are good, as this is what makes us unique from each other, and shows that people are coming up with different approaches on the same concept.
I once came across a good definition of “Customer Experience” in a McKinsey’s podcast interviews with one of its principals, Nicolas Maechler, who said that “Customer experience is a perception. This is not an operational KPI as you usually have in your company. This is a perception driven by a very clear equation. It’s the observed performance that the customer has with its supplier, minus its expectation”.
Even though there are many other definitions (as everyone has a different opinion about it), it is essential to note that every definition should be situated around the “Customer”. This is from where the concept of “Customer-Centricity” comes from. In this regard, managing customer experience, gathering valuable feedback of customers, asking about their journeys with your brand’s touchpoints is the most significant factor in the overall success and growth.
If anyone is still confused or unconvinced about why Customer Experience Management (CXM) matters in today’s HIGHLY competitive business world, here are the most prominent supporting reasons why it absolutely does:
1- It Defines Culture
Do you know that a company’s culture can be measured, even though this may seem absurd that how can one calculate an abstract concept such as “Culture”? But when one thinks about establishing a customer-centric culture, the only thing that can measure its success are the CXM platforms and tools.
One such platform that measures, analyzes, and engages customer feedback, to implement the proper CXM strategies is Antlere. There is a lot of brainstorming that goes in defining the roles and cultural values that emanates the customer-centric approach. But once these values are executed properly, the return on the investment can be concretely known through such management tools and customer-gauging platforms.
The Net Promoter Score (NPS) is the most famous metric to know how much a company is focused on its customer-centric culture. It can be utilized to its essence through the Net Promoter Spirit. This spirit, which defines what the Net Promoter Score is going to be for any company is another topic which I have covered in this article. When CXM is executed properly, it not only defines the culture but also shows how much the spirit of Net Promoter is envisioned in each department of a brand/company.
2- It Tells What the Customers Want, and Need
“It’s more expensive to find new customers than to retain existing ones”, this is an important fact to remember. Asking the current customers about their journeys in which each experience is highlighted and acted upon accordingly, can give a company the appropriate reasons to convert them into loyal fans. By this, I mean the CXM strategies that are customer-centric in nature will show the companies about what their customers want. But the ‘Want’ is no longer the most crucial goal that companies need to focus on; they need to focus on the ‘Needs’ of the customer.
Like we need air, water, and food to live, customers need seamless and memorable experiences, and companies need to provide the best kind of customer experiences to thrive in the market. How can one know what their customers “need” without knowing what they are asking for? This is where CXM is crucial. As the Walker study states that, “by the end of the year 2020, customer experience will go beyond product and price as the key brand differentiator”.
3- It shows how Employees are being engaged
Without providing the right kind of employee-centric design, it is difficult, if not impossible to provide and implement the right kind of customer-centric cultural model. If you are getting a good NPS, it would tell you that your employees are working in unison to establish a seamless customer experience. Employee engagement is crucial to drive positive growth for any business.
Robert Reiss highlights in his Forbes article that, “Melissa Reiff, CEO of The Container Store, and Robin Hayes, CEO of JetBlue, both pointed to the ageless principle that if you treat your employees well, they are likely to treat their customers well”. CXM is then a crucial strategy that needs to be implemented, in order to know how the employees are working, and how much they are being engaged in the entire process of customer-centric goals.
4- It Shows Which Metrics are Working and Which are Not
Conducting the proper customer surveys in the market gives a detailed insight into what is working, and what is not. Companies spend a lot of time and investment coming up with marketing strategies to implement a customer-centric design and culture. A complete strategic implementation of customer-centric data, and gathering it through certain metrics such as Net Promoter Score (NPS), Customer Satisfaction (CSAT), and Customer Effort Score (CES), are all focused on how the customers feel about a product/service of a brand. In short, these metrics tell how much customers are inclined towards doing business with a brand, and are part of the larger CXM approach that any brand can employ to get a picture of how it is performing in the market.
NPS takes a deeper dive into this approach, with measuring the quality of loyalty, in a quantifiable manner. With such metrics in place, their own workability and usage performance can be known, and brands can work according to the results they are receiving in order to know what is working in their favor, and what is not, so that their can either improve it, or stop doing it altogether.
5- It Cuts Down on Repetitions
According to a study “89% of customers become frustrated because they need to repeat their issues every time they speak to a company representative. To drive the point home, another study revealed that 87% of consumers believe that companies need to work harder to provide a more consistent customer experience”. Having a proper CXM ensures such consistency. Once you gather data about one customer when they have interacted with one of your touchpoints, you can start building a profile of that customer. Next time that they interact with your brand, you will know what the customer likes or dislikes. Data such as this is gold, and helps you provide personalized experiences to convert each customer into a promoter of your brand, and ultimately avoid repetitions of similar queries.
6- It Helps Improve Customer Journey Mapping, and identifies if Investments are Worth it
How can you ensure that the “moments” or “interactions” that your customers have with your brand at every touchpoint are seamless and memorable? The answer is implementing the proper Journey Mapping, that can help create such memorable moments/interaction. “A survey by McKinsey & Company revealed that effective customer journeys increase a customer’s overall satisfaction by 20%. By optimizing your customer experience at every touchpoint, you can ensure a more seamless customer journey. This can potentially increase your revenue by up to 15% and lower your customer service costs by 20%”.
CXM strategies help identify the journey mapping that is working, and how they can be improved further to provide a better experience to the customers. Harald Fanderl, another principal at McKinsey said in the podcast interview that “It’s all about putting customer needs at the center of what a company needs to do, and then ensuring along all the touchpoints and even more so along all the relevant customer journeys that the customers have a flawless experience. When a customer is satisfied with a company, they are also lower in the cost to serve.”
7- It Shows You Who Your Passives are
Passives are those customers who are indifferent about your brand and are unsure whether they would even recommend it to others, or not. Majority of brands do not focus on passives, and that is the problem. With NPS, once passives are detected, they can be converted into promoters by strategizing accordingly.
It is good to focus on the promoters, better to emphasize on the passives, and best to obsess about the detractors.
I have been covering TD Bank’s prime example of how they are obsessed about their detractors. They put a lot of emphasis on their detractors; asking them what went wrong, holding special one-to-one discussions with top management, where they get to the root cause of the problem and rectify it. Such importance given to detractors makes them think “WOW, even though I had a bad experience, this bank really does care about me!”. No wonder TD Bank is leading in its CXM and is converting their detractors into promoters left and right. Read more about TD Bank’s WOW Factor in its CXM, here.
What are more reasons for companies to implement proper CXM strategies to improve business revenue and growth? Let me know your suggestions below.