While most businesses are well aware that good customer experiences boost profits, many fail to take the right measures to quantify feedback and use it to solve problems and make useful predictions. Businesses can address this issue by creating a customer experience business case that provides valuable customer data which can be then easily managed.
How To Approach Customer Experience
A great deal of organizations look at customer experience as an art; this makes evaluations exceedingly difficult. Far better results can be achieved by treating customer experience as both an art and a science, i.e. use metrics such as cash flow and revenues to quantify it.
In this case mixing science with art is no easy matter. It can only be accomplished successfully if the business fully understands how customer returns can be boosted by company actions and what role the values of costumers have to play in all this.
A CEM business case can be build around customer relationship and cost to serve. Additional areas can also be considered, depending on the aspirations of the enterprise.
Improving Customer Relationship
Broadly speaking, there are three revenue enhancement and three cost reduction possibilities.
Boost revenue by:
- Improving the extent of your relation with buyers. Customer faithfulness can be fairly well assessed by looking at the depth of your relation with them. Some of the indicators which can help a business evaluate loyalty are the rate at which transactions are taking place and the amounts involved in them.
- Enhancing the breadth of your connection with buyers. This can be looked upon as a good measure of how many potential buyers are converted into actual consumers. It can be evaluated by looking at the rate at which new buyers are compelled to make a purchase and total number of customers and transactions.
- Prolonging the relationship with buyers. As a measure of how well the business is at retaining consumers, it can be assessed by looking at the longevity of business relations and at lifetime value.
Reduce costs by:
- Decreasing the expenditure necessary to acquire customers. It includes all the costs spent on promoting, marketing, and advertising products or services which aim to bring new buyers. Measures that can be used to determine this include the click through rate and the conversion rate.
- Decreasing the expenditure necessary to serve customers. It comprises of all the costs involved in the delivering of offerings, such as cost of service.
- Decreasing the expenditure to retain customers. It includes all the sums spent on promotion, advertising, and other methods employed to hold already existing clients.
Improving Cost To Serve
Improve cost to serve by:
- Decreasing the expenditures associated with the product. This varies considerably on the type of business, but it can be generally achieved by
reducing the levels of the inventory or by signing new collaboration agreements with supply chains. By decreasing product costs a business can improve consumer satisfaction which it turn is likely to result in an increase in profits.
- Decreasing the expenditures associated with service. This can be done by making significant enhancements to the quality of the service, improving the collaboration with consumers, and centralizing customer service and call centers. Decreasing the service costs can consolidate the business relationship with customers which in turn can increase profits.
Improving the Business Case
To enhance the business case an enterprise should identify the exact operations that will be used to carry out the activities discussed above. These are also known as value activities.
If customer care improvements are the target of the business then initiatives that help accomplish this include:
- Improving the interaction with customers at all the critical points. Further training for the company’s representatives can help achieve this.
- Improving the problem solving process. The loyalty of costumers depends to a great extent on the speed and efficiency with which their complaints are solved. For example, investments in a new call center can help the business solve quicker consumer problems. This in turn leads to buyers having a better opinion of the company.
- Improving the division of customer care. Customer care expectations differ from customer to customer: while some expect it to be excellent, others rarely need it. Creating a self-help website that handles customer care for those consumers who are not likely to ask for much direct assistance can be a good investment when it comes to improving custom care segmentation.
When assembling a business case a company should strive for accuracy, believability, and contingency. Comprehensive research must be done beforehand
and predictions must be made in case something will go amiss on the way.
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