Customer Experience. Why Bother?
What is the value of a Customer Experience program?
For the best performing organisations, capturing the voice of customer is vital for shaping future performance. In our research we found that 100% of high performing organisations systematically measure customer feedback. In contrast, only 34% of low performing organisations bother with customer feedback at all, we say they are missing a trick!
We see a clear case to support a systematic and broad ranging approach to customer engagement.
- The world economic downturn has put increasing pressure on customer retention. It is typical in these situations for customers to concentrate their reduced spending on few trusted organisations, are you one of those?
- It costs upto 10x more to acquire a new customer than it does to service and grow an existing one, look after them and well.
- In the our research, we see that high performance organisations retained customers much better than the rest; over 75% keeping more than 85% of their customers over the last two years. Low performing organisations fared much less well (only 16% of them exceeded 85% retention rates)
- Connections are growing exponentially with the rise of social media, offering many opportunities for conversations about your brand outside of your direct control.
- A 5% increase in customer retention rates can increase a company’s profitability by 75% (Bain & Company)
So what do you do about it?
Option 1 – The Ostrich approach
You could carry on in the hope that you will come through this recession regardless of what your customers think about you. Hmmm.
Maybe many of your customer are under contract and not likely to move anyway…. or as we would call them, “prisoners”. This was the case in one organisation we worked with recently and they were surprised when they failed to win at contract renewal! In the long term it is not enough to continue doing the same things, ignorant of the fact that customers are not happy with the value you bring.
Option 2 – Invest in understanding value
Invest time and effort with a simple, closed loop, systematic approach to customer engagement and feedback. This need not cost a fortune and can bring real insight into the strategic decisions you make. After all, retaining just one of your major clients will repay the investment many times over!!
In our Customer Experience series we explore the key stages in setting up a customer experience program for your company. We hope you enjoy them.