When you pull together a business case a couple of key areas are critically important:
- The cost of not doing it vs
- The benefit’s of doing it
So lets take a look at these and provide some pointers that might help you with the business case of implementing a Customer Experience program.
Let’s look at why you should be measuring customer experience.
There are lots of great statistics on the benefits of good customer service but the one I’ve found most relevant is one by a recent Salesforce paper[1]. The customer engagement research shows that not only do 88% of people say that good customer service is as important as the product or service, but this is increased from 80% two years ago, so is becoming more critical.
You might think that’s great for industries that sell things, but this finding is common across many industries.
According to a survey by Accenture[2], 55% of patients said that a good patient experience is more important than the actual medical care. This is wild; people’s perception of their care is more important than the actual medical care they receive.
What about government organisations? Well customer experience in government organisations is becoming increasingly important as citizens progressively expect the same level of convenience, personalisation, and responsiveness from government agencies as they do from private businesses. A survey[3] found that governments prioritizing citizen engagement and customer service are more likely to be perceived as effective and trustworthy by their constituents. In short, measuring customer experience can lead to increased citizen satisfaction, improved operational efficiency, and ultimately, better outcomes for citizens.
OK, customers think it is essential, but how is this affecting my organisation?
Some of the potential costs of not measuring customer experience include:
Revenue loss
- Loss of customers: Without measuring customer experience, businesses may not be aware of issues causing customers to be dissatisfied with their products or services. This can lead to customers choosing to do business with competitors who are meeting their needs better. Over time, this can result in significant losses of revenue and market share.
- Negative word-of-mouth: Not only can the original customer not do business with you, but they may also share their negative experiences with friends and family or post negative reviews online. This can damage the business’s reputation and discourage potential customers from doing business with them.
- Customers may continue doing business with you but spend less with you. Research by American Express shows that 70% of customers are willing to spend more money with a company that provides excellent customer service.
Employee issues
- Decreased employee morale: If employees are unaware of how their actions impact the customer experience, they may become frustrated or disengaged. This can lead to lower productivity, decreased job satisfaction, and increased turnover.
- Suboptimal resource management: If only looking at Sales, staffing levels and customer counts organisations are missing an essential KPI to run their business. Incorrect staffing levels could be occurring without
Organisational improvement issues
- Focusing on the wrong things: Without a statistically significant number of responses and only anecdotal evidence, organisations can look to improve areas which won’t add value or improve customer experience.
- Not making changes quickly enough: Even if you get to the root cause of an issue and make the change, it may be too late for some customers as they may have already left. Being able to make the correct changes quickly is imperative.
- Missed opportunities for improvement: Without measuring customer experience, businesses may miss opportunities to improve their products or services. This can fail to innovate and keep up with changing customer needs and preferences.
- Inability to compete: In today’s competitive business environment, customer experience is a key differentiator. Without measuring customer experience, businesses may be unable to compete effectively and may struggle to attract and retain customers.
OK so we know customer experience is as important as the service or product we are offering, so therefore shouldn’t we be measuring it?
The renowned management consultant and author Peter Drucker famously said,
“What gets measured gets managed“
Peter Drucker renowned management consultant
This quote highlights the importance of measuring key performance indicators and tracking progress to improve performance and achieve organizational goals.
You’re measuring other parts of your business, so why not one that is as important as the product or service you provide?
OK, but what is the best way to measure customer experience?
Read about that in our next instalment
[1] https://www.salesforce.com/news/stories/customer-engagement-research/
[2] Patient Engagement: A Strategy for Empowering Patients and Reducing Cost
[3] “The Future of Local Government: Preparing for Rapid Change” the International City/County Management Association (ICMA)