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Customer experience informs how your customers perceive their interaction and journey with your brand.
CX is not just the score, but from a business standpoint, it is about the Return on Investment. The experience you deliver should bring back tangible value to your business, i.e., the ROI of CX transformation.
However, many CX leaders are unfamiliar with how to quantify the ROI of CX transformation, that is, how to assign dollars to their CX program. CX professionals need to build a business model that shows how the efforts for CX transformation deliver massive ROI.
This article will discuss the programs we have identified to provide value to your customers and demonstrate an incremental benefit, thus ramping up the ROI of CX transformation.
Let’s dive in to learn where to look for benefits in customer experience and quantify them to gain the ROI for CX transformation.
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A 5% increase in customer retention leads to a 25% increase in profit. Additionally, old customers are 50% more likely to buy new products.
Analyzing your customer retention metric shows how successful you are in keeping customers satisfied. In this saturated market, customer experience is the key brand differentiator & it can be an effective strategy to galvanize the ROI for CX transformation.
The best way to retain customers is to utilize the Voice of Customer program and 360 customer data. Follow up with them to understand how they feel about their experience with your brand and when they need help. Leverage the data to predict which customers are likely to churn and their reason for churning.
Starbucks generates a 12% hike in revenue and lowers inactivity by 5% with targeted loyalty campaigns. Starbucks integrated customer data and created a single source of truth to segment customers based on their purchase behavior. The brand identified the right strategy for each customer segment and offered personalization to boost retention & reconnection.
Acquiring customers is expensive, however, every brand needs to grow its customer base to grow its business revenue.
Not all buyers are a fit for your target market. Focusing on customers who resemble your target customer base can help you bring new customers in and increase your demand.
You can start collecting data from customers that resemble your existing audience to know your best customers. Using the collected data, you can build a rich profile to understand their product preference, demographics, geographics, psychographics, etc.
This can help you weed out customers who are a bad fit. You can find customers who have a higher possibility to convert & go an extra mile to acquire them.
The acquisition should not only focus on bringing in customers with higher LTV but also on extracting value from the current customer base. The balanced approach can help grow the ROI of CX transformation while reducing the cost to maintain customers.
Turning a one-time shopper into a repeat customer is more challenging than acquiring them. How do you keep them returning to purchase more? The trick is to leverage the data you collected on their first purchase to create personalized offers and communications.
For example, a new customer bought a pair of gym clothes from your social media account. You can follow up with customized product recommendations on active gear or sports shoes via social media.
Entice them with personalized welcome communication that influences them to make another purchase. Don’t go for a one-size-fits-all strategy. Leverage predictive analytics to identify the best recommendation for the buyer that will get them to come back.
Top-tier customers are your most loyal buyers who will choose and evangelize your brand. These customers will allow you to make up for a bad experience because they trust your brand and feel a strong connection.
Nurture this personal bond by catering to their needs and consistently exceeding their expectations. Leverage their historical purchase data, feedback, opinions, and interactions to design a highly personalized experience that demonstrates their value to your brand.
43% of customers spend more on brands they are loyal to. Upselling and cross-selling to your existing customers allows you to enjoy better ROI. Offer customers products and services relevant to their needs and preference.
Build trust with your customers by interacting with them and understanding what they want. Leverage surveys to learn about their needs and analyze historical data to predict what they will need in the future. Keep track of their journey across all channels to identify opportunities for upselling and cross-selling.
VITA, a beauty, and wellness chain, enjoyed a 5% increase in annual sales with target-driven marketing strategies. They used machine learning to make their customer segment future looking.
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Customer data allows you to identify how to build a deeper relationship with your customers and make better CX decisions. It is the key to making customers feel valued at every interaction across their lifecycle.
The key to quantifying the ROI of CX transformation is to understand the key drivers at each step of the customer lifecycle.
Understanding your customers enables you to become customer-obsessed. You need to understand what customers are saying and their actions. Are they buying the product they assign a 10 NPS® score? Find the missing piece.
Combine operational touchpoint and experience data to identify what impacts the customer experience. You can determine which customer experience impacts the CX ROI and take actions to deliver value in those areas.
Voxco’s Visual Analytics Dashboards provide insights that aid decision-making
CX Transformation effort follows up with benefits such as customer retention, upsell opportunity, and more customers. Business leaders who want to demonstrate the ROI of CX transformation must estimate the benefits and the big price tags that come with it.
Voxco is an insights platform that can help you discover ways to implement CX transformation and demonstrate the incremental benefit.
Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.
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