Create an Effective Customer Experience Strategy
November 29, 2023 | Read time: 8 min
In today’s competitive business landscape, a well-crafted customer experience (CX) strategy is not just an option; it's a fundamental necessity for scaling revenue growth and achieving profitability.
Surprisingly, only 20% of businesses fully understand the role CX plays in their overall business strategy, according to CustomerGauge research. This oversight can be a significant barrier to growth, as companies committed to customer experience have been shown to grow their revenues up to 8% above the market average.
So, how can you get started? By building a customer experience management strategy.
Let’s take a look at 8 exemplificative ways to create a great customer experience strategy to help you improve customer satisfaction, reduce churn, and increase revenues.
Your journey starts with a clear, customer-focused vision. Define this with guiding principles and make them the cornerstone of your organization’s culture. Every team member, from executives to front-line employees, should not only be familiar with these principles but also integrate them into their daily interactions and decision-making processes.
Understanding your customers goes beyond demographics. Create detailed personas for varied customer types, for example, like “Dana”, a 30-year-old tech enthusiast, who is tech-savvy enough to follow a video tutorial on her own, whereas “Andrew”, 55 years old, needs to receive clear written instructions on a blog web page.
These personas with their specific characteristics and behaviors will help tailoring your services and empathizing with customer scenarios, moving your brand towards true customer-centricity.
The Journal of Consumer Research has found that more than half of a customer's experience is influenced by emotions. Brands that consequently replace their own limited perspective with an accurate customer perspective succeed in establishing an emotional connection outperform competitors by 85% in sales growth. So, the best customer experiences are achieved when you create an emotional connection with the customer.
Remember, it's not just what you offer; it's how your customers feel about the entire experience.
So, what does that mean? A positive experience for customers 71% of people recommend a product or service because they received a “great experience” and 65% of all consumers find a positive experience with a brand to be more influential than great advertising.
How can you tell if you are delivering a WOW customer experience?
You can start by implementing live chat tools and post-interaction surveys to capture real-time feedback. This immediate input can be invaluable in understanding and enhancing the customer experience at every touchpoint.
For a more real-time and immediate response, you can launch outbound sales calls to customers to gain more insightful feedback.
Make a shift from annual surveys to a continuous feedback model. Use tools that allow employees to share insights with management quickly and easily. This ongoing dialogue can provide innovative ideas for CX improvements. For example, using project management software or social media tools, you can create a closed environment where your organization can leverage continuous feedback.
It is important to know if all this investment in your teams, process, and technology is working and paying off. What matters here is the money spent versus the money generated, also known as return on investment (ROI). To optimize return on investment (ROI) in business, focus on four key pillars:
Growth: Enhance lifetime value by integrating customer insights across all departments, from marketing to product management, and prioritize customer engagement.
Performance: Incorporate customer feedback into performance benchmarks, linking employee activities to customer satisfaction and overall business success.
Strategy: Ensure all departmental strategies are customer-experience-centric, promoting cross-functional collaboration and customer-focused decision-making.
Efficiency: Utilize customer insights to streamline operations, address brand integrity issues, and implement customer-oriented actions at all levels.
Measure success using top-line and bottom-line Customer Experience (CX) metrics:
Top-line Metrics: Assess business growth through customer referrals, expanded purchases, longer customer tenure, positive word of mouth, growth from promoters, CX-inspired growth, recurring revenue, margin expansion, and sales velocity.
Bottom-line Metrics: Focus on cost efficiency and include metrics like lower customer acquisition cost, customer lifetime value, customer service value, customer retention, reduced negative word of mouth, less workplace stress, shorter sales cycles, efficient product design, issue resolution, resource reallocation, risk reduction, and CX-inspired efficiency and strategies.
The ultimate goal is to maximize lifetime value, with all CS and CX measures contributing to this aim. By prioritizing bottom-line CX metrics, you'll see quicker and larger gains, benefiting all current and future customers.
Tools that automate your CXM processes and give you actionable insights to improve have become indispensable. When it comes to improving the customer experience, it’s all about personalization.
Did you know that you can greatly enhance your customer satisfaction and loyalty rates by tailoring the experiences to their specific needs and preferences?
We recommend using customer data and analytics to collect insights about their past interactions, preferences, and buying history. Use this information wisely to personalize your communication, recommendation, and targeted offers.
Customers expect consistency across all channels. So focus on the entire journey, not just individual touchpoints. Ensure your CX strategy delivers a unified experience, whether they interact with your brand online, in-store, or through customer service, no matter which platform, channel, or device they’re using.
McKinsey research indicates that journey optimization can have a more substantial impact on customer satisfaction and business outcomes than focusing solely on specific interactions.
This means you need a clear understanding of the end-to-end experiences with customers and how interactions at each point are perceived. Focusing on a customer’s journey, and identifying the problems within them, offers new opportunities to create a great customer experience. This also enables your teams to brainstorm ideas to reduce friction, improve business relationships, and increase growth.
In an era where customers are more empowered than ever, the importance of CX can't be denied. Continuous nurturing and innovation in your CX strategy can lead to increased customer loyalty, higher retention rates, and significant revenue growth. As we look to the future, staying ahead of the CX challenge means evolving alongside customer expectations, leveraging new technologies, and consistently delivering value at every step of the customer journey.
If you don’t have the internal resources to take on a well-documented CXM strategy, since it involves a significant amount of time and resources, work with an independent CXM consultancy company.
We are here to support you through your implementation journey, from the business strategy to selecting the most appropriate solution that fully meets your needs, to ongoing maintenance and support.
Contact us to learn more.