Wednesday, July 08, 2020

The Hidden Side of CX Enhancements That Boosts ROI and Investment Payback

Jay Baer
January 03, 2019

3 minute read

Customer experience (CX) professionals have acknowledged for years that customer expectations are on the rise and aren’t going to be lowered anytime soon. They’re on an ever-moving escalator.

If you think about it, you never really reach the top of an escalator; it just keeps going up and up and up, continually repeating its perpetual ascent. Nailing the timing of your first step back onto level ground, so as not to embarrass yourself in front of the mall Santa or the Martha Stewart Collection at Macy’s, is much like striking the proper chord with your customers.

To stay up-to-date with these expectations, we need to continuously optimize the customer experience our organizations deliver. Not only are we tasked to keep up with these trends, we’re asked to constantly optimize them for our own organizations to keep in line with the expectations of consumers—and that’s harder than ever before.

Your CX is competing against the top companies’ CX

When I was in high school, my local Taco Bell made a big decision to be open 24/7. Late night tacos as a teenager? Yes, please and thank you, Taco Bell.

At the time, this was a game changer, a differentiator that would catapult Taco Bell into major brand status and win the stomachs of Generation X. Now? Nearly every fast food chain is open round the clock. Being open at every waking hour is almost table stakes.

The greatest companies in the world are training your customers on what to expect when they interact with a company. The CX genie is not going back in the bottle and there aren’t any wishes that will instantly improve your company.

Customers are no longer willing to give you a pass. They will, however, pass you over for the competitor who will provide a better CX.

The ROI Argument

The ROI argument

When your organization is trying to come up with its own version of a 24-hour Taco Bell, it’s best to start by evaluating the investments you need to make in CX. Bolstering technology is a logical starting point. When we want to leverage software to improve CX, we justify the addition of a new tool through the justification that technology can help to usher in these enhancements. In essence, the logic chain is thus:

We need to spend X on software, which will theoretically produce a customer experience outcome of Y, that will therefore reduce churn, that will subsequently increase profits.

A report from Harvard Business Review revealed that a 5% increase in retention can increase profits as much as 25%. Reducing churn has a disproportionate impact on profit; by keeping the customers you’ve already earned, you aren’t spending any additional dollars in an effort to reengage or reacquire them.

Employee Experience

“EX”: The hidden side of CX enhancements

There’s more to the story of CX’s return on investment than just churn reduction. Improving your employees’ experiences – “EX,” if you will – is also important and valuable.

Providing a better EX reduces employee defections, increases workforce knowledge, and contributes to enhanced CX as well. After all, team members who have the tools and systems to do their jobs efficiently and without hassle are happier. That satisfaction impacts how they interact with each other, and with your customers.

So, when you’re considering a CX investment – especially a software-driven CX upgrade – don’t only calculate the payback based on customer retention and possible increases in customer loyalty. Look at what your company will earn by enhancing the day-to-day job satisfaction of your most important asset: your people.

Jay Baer
Jay Baer
Jay Baer is founder of Convince & Convert, a boutique advisory firm that helps the world’s most interesting brands level up their CX and marketing. Jay is a New York Times best-selling author of five books, a 7th generation entrepreneur, and an inductee into the World of Mouth Marketing Hall of Fame. by Oracle is the destination for professionals who are building the next generation of customer experience. Here, you can find breaking news, in-depth analyses, expert insights, and useful tools that will empower you to think and work progressively.