Correlation between Customer Experience and Revenue Growth

Introduction

Customer Experience (CX) remained an ignored arena as companies were paying little to no attention to their customer experience strategy. However, the increased competition in the market has changed the scenario. The consumer’s experience management market is growing at around 17% every year, a trend that will continue in the future as well. Companies are used to toning products to match customer’s preferences. And they have now realized that CX is as much part of the product/service itself, leading to a changed CX strategy.

How CX affects revenue growth

Over time, businesses have understood that improving customer experience is not a marketing gimmick. It also has the potential to bring monetary benefits with increased revenue growth for the business. According to a study by Forrester, companies paying attention to customer experience outperform their peers by as much as 80%. It is an expected result as a better customer experience creates loyal customers. Higher brand loyalty eventually leads to increased engagement and willingness to spend more.

“If you’re customer-first and do it in a smart way, then it can help the company.”

– Augie Ray (VP Analyst, Gartner Research & Advisory)

People trust word-of-mouth more than any other form of marketing. Loyal customers can be the most reliable brand ambassadors for any business. However, it is only with a strong orientation towards CX that organizations can provide them with experiences they would like to share with others. And there is no reason to put it off the table when even one point improvement can lead to more than a billion dollars in additional revenue.

How to Improve CX

Customer experience is not about selling great products but is about building great relationships. And to build a healthy relationship, businesses need to establish trust with their customers. Here are a few strategies that have helped companies to connect better their customers:

a) Data collection: One reason for the inability of the businesses to provide exceptional CX in the past is that they lacked quality customer data. However, with increased digitalization, enough customer data is available, giving insights into customer behavior and preferences. Holistic data enables businesses to make informed decisions. As per Gartner, 80% of companies showing positive growth collect survey data than 58% of the no revenue growth organizations.

b) Leveraging Technology: Innovations like real-time analytics and Artificial Intelligence enable businesses to gather data and create a deeper understanding of customer behavior. It leads to a more personalized experience for the customer, increasing revenue through up-selling and cross-selling.

c) Customer care availability: Customers prefer businesses that are available 24*7, not only to sell but also to handle customer queries. Another aspect of availability is switching to multichannel reality, with presence across email, voice, web, chat, and social media. 24*7 availability of help through various channels helps resolve customer queries faster, accelerating the sales cycle.

d) Automation: Automation has proved helpful in streamlining many processes behind the scene. It has even addressed the 24*7 service availability expectation of the customer through bots. Businesses are increasingly using bots in customer-facing tasks where they have proved successful due to enhanced NLP technologies. It has resulted in increased lead generation and conversion, driving revenue growth through increased sales.

e) Consistency across communication channels: Switching from one communication channel, like the web, to another, such as mobile, shouldn’t affect customer’s experience. All of their data, along with services provided, should be equally accessible across all the channels. People use multiple devices these days. It becomes frustrating to enter the same information repeatedly as they switch channels. They would instead switch to your competition.

f) Agent Experience: Businesses need to take proper care of their employees first. Discontent employees become rude customer care executives that lead to unsavory customer experiences. Organizations should train them to be empathetic to respond efficiently in all situations.

Conclusion

The competition out there is unrelenting. It has already outgrown the quality space and is entering the field of customer experience. Net Promoter Score shows a difference of 10-70% in revenue growth with changed CX experiences; CEOs around the world agree. It demonstrates that the only way for a business to survive in today’s time is to shift from a product-centric to a customer-centric approach.

  Sources: Grand View Research, Qualtrics, Gartner, Forrester, Bain & Company