Each year, Australian consumers close their wallets and walk out the door of one business on the way to another. For the brands waving bye-bye to their unsatisfied customers, the cost is estimated at $120 billion.
That figure comes from an Accenture study conducted in 2016, and demonstrates the importance of making life easy for your customers. In truth, the evidence about the economic benefits of great customer experience has been clear for years.
Back in 2014, the Harvard Business Review released results from a study called “Lessons From the Leading Edge of Customer Experience Management”. The researchers looked at the profit performance of companies that considered themselves leaders on the customer experience front against those that considered themselves laggards.
The study found that 60 per cent of those leaders reported successful profitability results relative to their peers. That compared to just 35 per cent success for businesses that considered themselves laggards.
The gap was even more pronounced on the measure of customer retention, where leaders lead laggards by 54 per cent to 20 per cent.
Those results were validated in a more contemporary study by Avanade and Sitecore last year. That study examined responses from over 900 decision makers across half a dozen countries, and identified a direct link between improvements in customer service and top-line growth.
In that same study, the researchers argued that the figures suggested every dollar invested in customer experience returned three dollars to the brand.
No wonder, then, that this year an eConsultancy and Adobe study called “Digital Trends 2017” revealed that customer experience is the number one way brands want to differentiate themselves from their competitors.
Self evident, but …
Why do so many companies still get it wrong? Even among those who get it mostly right, what will distinguish the good from the great? Clearly a sophisticated approach to data analytics is essential, as are the right platforms to provide services and interact with customers. And a little genuine customer empathy at executive level always goes a long way.
Right now there is something even more fundamental holding many organisations back.
One reason, according to Oracle CEO Mark Hurd, is that most companies simply are not culturally or structurally equipped to tie together all aspects of a customer’s engagement with the brand. And when they try to tie together marketing with customer service, the picture gets even worse.
Hurd told Which-50 earlier this year that most companies are yet to bring their processes together in a way that will provide a genuinely holistic view of the relationship. In fact, he suggested, most are not yet even ready to start. The CEO of another marketing cloud vendor told us that less than five per cent of his clients could really claim to be ready to tie all the elements of customer engagement together.
That’s not to say that success is beyond the reach of everyone. But the winners in the CX game understand they are dealing with something far more significant than just another IT project.
As Gartner Research Director Augie Ray noted in a recent column published on Which-50, “The CX programs that are the most mature and successful change how companies operate, strengthen relationships with customers, and result in durable, healthier, and more profitable brands.”
According to Ray, “That does not happen by accident or with disparate, disjointed, and reactive CX programs. Only by committing to proactive, data-oriented, collaborative CX programs designed to improve customer sentiment can organisations enjoy the benefits promised by customer experience management.”
About the Which-50 Digital Intelligence Unit
This article was produced for ADMA by Which-50. ADMA is a member of the Which-50 Digital Intelligence Unit and this story appears in The Future of Marketing