02 Feb, 2018 Simplified CX Is Worth $86B. Are You Getting Your Share?
Customer experience is a term that many dismiss as a buzzword. However, Siegel+Gale’s 7th annual Global Brand Simplicity Index study revealed that organizations represented in the study increased revenue by $86 billion by simplifying services and customer experience. Interesting that customer experience (CX) is being dismissed yet warrants such attention that just one study shows major gains to organizations that get it right. Unfortunately, many do not.
Why is CX worth so much yet so difficult for many to achieve? Humach president, Sean Charnock, believes that the biggest challenge is how these initiatives are deployed.
“Customer experience is a global term, but it’s being deployed in silos within organizations. I think the missing piece is that everybody is thinking that CX is a spot solution versus a start-to-finish solution focused on the customer,” says Charnock. “When in silos, CX metrics are based on the department that owns the initiative. For example, if it’s marketing, then the focus is qualified leads. If the technology department owns CX, then the focus is about reducing the work effort of the customer.
“The problem is that often the customer is dictated to, rather than being listened to. There is too much focus on the transactional, reactionary zone, rather than creating a unified element around CX.”
The Siegel+Gale study focuses on simplification as key to improving customer experience and highlights the following statistics:
- 64 percent of consumers will pay more for simpler experiences (46 percent U.S.A., 48 percent Germany– but much higher in countries like India, at 92 percent, and China, at 85 percent).
- 61 percent of consumers are more likely to recommend a brand because it’s simpler to use.
- A stock portfolio of companies from these simpler brands outperformed major stock indexes by 330 percent.
- When your experiences are too complex, an average enterprise brand can leave an estimated share of $86 billion on the table.
There is an obvious payoff to focusing on CX, understanding the overall customer lifecycle and making it simple for them to do business with your organization. So, what is missing from current initiatives to make them successful?
Dive deeper into the ROI of a simplified customer experience. Our report, “The Time is Now” will show you strategies to make sure you capitalize.
Keep It Simple and Customers Will Stay
There are plenty of metrics and focus on customer acquisition costs, as well as customer retention, for most companies to know the price tag associated with these activities. To make simplification in CX work, this information has to not only be shared, but addressed as an organization.
“In addition to a strong focus on acquisition and retention, it is crucial that every department within an organization collaborate to draw a unified vision around CX,” says Charnock. “I think this is part of the overall breakdown. Each department is focused on a spot solution for their own desired result, which will not push simplicity as that is an overall experience.”
CX is more than just marketing, IT or customer support. It requires a strategy that is cross-functional throughout the organization that both supports simplification while allowing for the ability to pivot when something does not work. However, it appears that in spite of this overall strategy making sense, it is not being deployed.
“My experience is that CX is a sub function of a department, which creates these silos. Experts in the CX world are saying that the best traction comes from organizations that put the leader of CX reporting directly to the CEO,” says Charnock. “Unfortunately, this is not a model we see utilized enough, which will impact any customer service initiatives.”
There are good reasons to create a CX position reporting to the CEO, according to Charnock.
“CEOs are measured differently based on the state of their organization, whether that is high growth or low growth. The CX philosophy will change based on the overall health and life cycle of the company. CEOs can quickly bless any change in initiatives if they have a CX person reporting to them, thereby providing the best opportunity for success.”
Simplify or Die – from a CX Perspective
As with most solid business initiatives, information is key to successful implementations and proper adjustments going forward. The same is true for CX, particularly since the ability to collaborate and share information breaks down walls of existing silos and provides a full view of the customer journey, something that impacts CX in a very big way and must be understood from start to finish.
Acquiring data across functional teams is not always easy. Add to that any new initiatives to consider, and organizations may find the idea of testing simply too risky, even if it does mean improving customer retention or acquisition.
“We understand that there are voids on the application side of CX, which is the reason we created Humach Labs,” says Charnock. “Our clients receive a production-level environment in which to test in a nimble way without a long-term engagement. This provides a risk-free way to test any one of the 1,500 solutions around CX, as well as how the initiative impacts existing processes and people, without the impact to their organization.”
Using Humach Labs along with a bundled solution comprised of CX professionals gives Humach clients a window into how a new CX initiative impacts their customers, their company and their bottom line.
“It’s critical to understand the value of a customer over time versus the value of acquiring a new customer then be focused on the result you desire,” says Charnock. “If you have a great acquisition system, but little to no retention system, that costs money and becomes a very expensive proposition as you continually gain new customers but run the risk of losing them somewhere down the line.”
Charnock often finds that when organizations claim their CX initiative is a failure, it is because they view it through a micro lens rather than a macro lens.
“At the end of the day, it’s important to think of CX differently, as an overall strategy, rather than transactions,” says Charnock. “It’s a series of collaborations across the organization. If there are five tools being used to impact CX, but they do not interact, then you do not have the visibility needed to have a successful CX program, much less simplicity going forward.”
Customers want a holistic solution, rather than spot solutions, and are looking for the overall experience from organizations they buy from. To improve your overall CX strategy, you need a starting point that won’t require massive resources from your company. Find out how Humach Labs supports companies as they incubate new ideas.