2023 was a year of strife for many businesses and now, as 2024 unfolds amidst continued economic uncertainty, businesses are tightening their budgets while remaining ambitious, seeking to achieve strong growth and high revenues. Achieving these lofty goals while spending less may seem like a paradox but this problem can be resolved, with the solution lying in a robust Customer Experience (CX) strategy to ensure financial constraints don’t hinder delivering value. Even amidst looming economic impacts, such as the war in the Middle East, the ongoing war in Ukraine, and the upcoming U.S. election, a strong CX strategy can make the difference between growth and decline.
The Economic Power of CX
At a time when every dollar counts, investing in CX might seem counterintuitive but the evidence says otherwise. A study from McKinsey found CX Leaders saw 3x higher returns compared to laggards, letting them recover more quickly from economic decline and improving their resiliency. Another report from Accenture found that companies who perceived customer service as a value center rather than a cost center saw 3.5x more revenue growth. When CX is executed strategically, at a company-wide level, there is little doubt about the impact it can have in achieving the revenue growth businesses are seeking this year.
This was something Janssen Pharmaceuticals found when they invested in transforming their disconnected digital customer engagement to introduce systems that improved CX overall. Recognizing this was a complex problem, Julie Ryan, Director of Patient Engagement and Customer Solutions, knew they needed to not only invest in new technologies, but also their people and organization through change management, process standardization, and employee training. This resulted in a growth of $11.1 Million, a cost savings in efficiencies of $7.9 Million, and retention of $6.0 Million. Those incredible numbers all came from recognizing it was a CX challenge they faced and investing in a cost-effective customer experience strategy to find the right solution.
Reducing Loss
The flip side of a first-class CX strategy is reducing customer churn. A report from Emplifi found that 86% of customers will leave a trusted brand after only two poor customer experiences. That’s akin to leaving money on the table. This can easily be fixed by understanding what’s leading to any poor customer experience and resolving the problem but if you’ve been too focused on the rapidly evolving technology landscape and economic impacts high inflation has been having on your business, it’s easy for this to fall to the wayside. Customer’s expectations change constantly and if you’re not keeping up with their needs, wants, and values, it can be easy to fall behind.
This is also tied into one of the priorities many businesses have set for themselves this year, fully utilizing their martech stack. You can have the best CRM and CDP out there but if you aren’t doing anything with that data, then once again you’re leaving money on the table. Making sure your teams are properly trained on utilizing predictive analytics and the machine learning capabilities many of these platforms offer is critical to creating a stand-out customer experience. McKinsey found businesses employing predictive CX platforms were able to reduce their operational costs by 10 to 25% by targeting specific areas for improvement within their customer journey.
5 Steps to Implementing a Cost-Effective CX Strategy
- Define your CX Vision and Goals
Without establishing a clear vision and defined goals, you have nothing to measure yourself against to know whether you are succeeding in delivering the experience you want your consumers to have or not. By defining your vision, it forces you to consider your customers’ needs, preferences, and pain points. Setting specific, measurable goals that align with your overall business objectives helps ensure your CX strategy will drive value.
- Understand the Customer Journey
If you haven’t already, mapping out your customer journey is critical to understanding how they interact with your business, from initial awareness through to purchase and beyond. By identifying and understanding all the touchpoints your customers have with your brand, you can find opportunities for improvement and areas where investment can have the largest impact on your customer’s experience.
- Leverage Data and Analytics
Make use of the customer data you have. Utilize analytics to gain insights into customer behaviours and feedback, better understanding their needs and letting you craft a better experience for them. Paired with predictive analysis, you will be able to hyperpersonalize their experience, something customers are seeking and expecting more and more businesses to provide them. If you aren’t getting useful insights from your customer data, then consider investing in updating your technology stack so you can get CX platforms that collect, analyze, and act on customer data efficiently.
- Implement Targeted Improvements
Based on the insights you gather and your understanding of the customer journey, you can prioritize which improvements to implement based on the areas that will significantly enhance the customer experience and contribute to your strategic goals. This is especially important with a tight budget as this allows you to hone in on which initiatives will deliver the best ROI.
- Measure and Optimize Constantly
Customers are always changing, which means your CX strategy has to as well. Establishing key performance indicators (KPIs) to measure the success of your CX initiatives against your CX Vision and goals is key to delivering a consistent first-rate customer experience. It allows you to use your ongoing data analysis to refine, optimize, and adapt your strategy over time.
A Case for CX Investment
It’s hard to deny the value that a strong CX can bring to any business. Customers spend more, stay longer, and are more satisfied when companies invest in their CX. With many businesses trying to recover from the impact 2023 left on their budgets, focusing on the fundamentals like their customer experience, can go a long way to achieving their goals of improving their revenue and seeing the growth they are hoping for. Focusing on areas backed by robust research, data, and insights, and ensuring technology is optimized for delivering CX value, businesses can not only save money but also pave the way for both short-term and long-term sustainable growth. In the pursuit of doing more with less, CX emerges not just as a strategic investment, but a necessary one for businesses to hit their targets for 2024.