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Is your customer experience helping or harming the bottom line?

Every business delivers a customer experience. But how good is yours?

Every business delivers a customer experience. But how good is yours?

What is it doing for your business? How is it making your customers feel? And is it contributing to your business growth through increased customer loyalty and word of mouth referrals – or is it adding cost through increased marketing and recruitment costs as a result of customer and staff turnover, and damaging negative word of mouth?

Chris Bell - value of the customer experienceThe difference between a consistently great customer experience strategy and a poor one is huge when you look at not only outcomes but all the other advantages a totally focused culture brings to an organisation  in the long run. This includes greater engagement across your entire team, increased loyalty both from within and from your customers, your ability to capitalise on the creativity of your team, less costly customer complaints and negative word of mouth, a reduction in costs andthe  ability to attract more of the right people.

If you're already delivering a customer experience every day to every customer, why wouldn’t you spend a little more time on developing an experience that is actually going to grow your business and its profitability?

An increasing number of businesses are starting to understand the power of a customer experience strategy. This includes the importance of customer emotions, a greater understanding of customer expectations and the fact that there are other ways of adding value besides reducing prices and margins.

Let’s not get too emotional. Yes, it is about your people and your customers and the experiences you consistently deliver to both, but this is business, and business is about making money and being successful long-term.

This means that any investment in a customer experience strategy must be just that – an investment that produces a measurable financial return.

We know a loyal customer can increase value to a business in a number of ways including:

• Repeat value: the additional revenue that results from a customer choosing to do business with you over time
• Incremental value: the additional revenue that results from a customer spending more per transaction
• Strategic value: the additional revenue that results from a customer buying other goods and services
• Advocacy value: the additional value that results from a customer influencing others to buy from you

Business has a choice and that choice is to continue to compete in a world of sameness where price seems to be the only competitive strategy that a business can come up with – or to develop a strategy that will see your business establish a true and sustainable competitive advantage. This competitive advantage will be totally customer-focused, have total commitment and engagement from your people, and will have a long-term and continual development focus.

Suggestions:

• Calculate the value of a customer's loyalty
• Calculate the value of increased positive word of mouth
• Calculate the value of low staff turnover
• Calculate the value of high employee engagement
• Calculate the value of a focus that’s not on price
• Calculate the value of capitalising on your team's ideas
• Calculate the value of a sustainable competitive advantage

Now let’s see if you have the budget to invest in the development of a customer experience improvement strategy.

Chris Bell is managing director of Customer Experiences, a New Zealand-based organisation specialising in the development of high quality customer experiences