Investing in CX Channels: Proving the Worth of your CX Program
Yet, when compared with other departments, success teams and the contributions of their CX efforts can be hard to measure. Marketers bring in leads, sales teams drive business, support teams are on the front lines maintaining customer relationships, and customer success are working diligently but somewhat unnoticed behind the scenes.
Until now, an excellent customer experience could have been considered the cherry on top of a great business model, but now, brands are realizing the urgent need to improve, build upon, and grow their CX strategies and portfolios. Brands are starting to catch on to the fact the customer experience happens regardless of intentions. Brands need to create a more meaningful CX.
In 2022, there will be a cool $641B to be spent on CX technologies so, you know that if your brand doesn’t put in the effort where it counts, your customers can find a brand that will.
As a CX professional however, you have to prove the worth of the strategies and technologies you’re investing your CX budget into and need to not only understand the ROI, but prove it across your organization.
Let’s talk dollars and sense. Is the channel you want to invest in going to save or earn your company money? If it’s not going to do either of these things, then you should probably stop right there.
Proving to execs that investments in starting, updating, or improving your CX strategy are worth it requires measurements. By reviewing three customer experience necessities you can show the value of your strategy: Does it improve retention, encourage referrals, and improve customer satisfaction?
Can it Improve Customer Retention?
A huge impact of improving your CX can be measured in improved customer retention rates ie. the customer lifetime value model. Improving your retention rate by as little as 5% can increase your profit by up to 95%!
A customer that stays loyal to a brand does two things that can affect financial outcomes: 1) they spend more money (140% more that is), and 2) they cost a brand less to maintain than the acquisition of a new customer. A great CX can both earn and save money, winner winner, chicken dinner.
Investing in strategies and technologies that can help you to decrease churn rates is one of the most efficient ways for a brand to see positive financial impact. 33% of customers will leave a brand they love after just one bad experience. The cost of acquiring a new replacement customer is so much (6-7x) higher than if you had just managed to retain them.
Can it Improve Customer Referrals?
Long-term investments lead to long-term gains. Yes, making money here and now is important but you also want to prove capabilities that over time, your CX strategy will contine to reap rewards.
More than two thirds (72%) of people share positive brand experiences with 6 or more people. These loyal customers will help your brand to upsell, cross-sell, and refer other customers. Over time, you are not only saving money through retention but you are onboarding new customes without cross-organization initiatives.
It is cheaper to onboard a referred customer than a customer acquired through any other channel: referred customers have a 60% larger return on investment (ROI). You can use your CX programme to take a tactical, customer-level approach that leads to a longer duration of revenue growth.
Can it Improve Customer Satisfaction?
Measuring your CSAT against your CX program is an excellent way to prove its worth. If your customer feedback is increasing and improving you can use this as tangible evidence of the success of your program.
Increasing your CSAT requires you listening to customers – offering feedback and survey opportunities to hear your customers is the ticket. A large majority of consumers (76%!) balance their value to a brand against its customer service.
Working to improve your CSAT can lead to better results company-wide: it can help you identify problems with your offering, bottlenecks in your customer service, and customers who are less than happy with your brand helping you to address these problems and improve loyalty.
The Value of CX Programs
At the end of the day, any CX program you are investing money in should have proof of ROI, and there are many ways to do this – these metrics just about scratch the surface!
If you’re interested in understanding more about customer experience check out our ebook, Customer Perceptions of the Community Experience. It breaks down the expectations consumers have for brands and how they see these expectations being met. Download it for free here.