The secret to maximising CX return is to focus on customer experience value, says Andy Main, head of Deloitte Digital in the US.
Marketers are competing on experience now more than ever. Yet, while experience is the new marketing currency and marketers have a huge influx of data, they have lost sight of the value of customers. We need a new era of customer management.
Customer experience has made the leap from buzzword to true competitive differentiator. In fact, 89% of businesses now expect to compete mostly on the basis of customer experience (CX) -- up from 36% just four years ago, according to Gartner. No wonder so many companies are investing time and money trying to get it right.
Unfortunately, many are seeing a return on their CX investments that is much lower than expected. The secret to maximising CX ROI is to focus on customer experience value (CXV) -- creating the most experience value for those customers that will create the most business value for the company (now and in the future). To make it happen, companies need to improve their approach to CX in four key ways:
1. Clearly understand the value of CX from both the business and customer perspective. Most companies look at CX value with one eye closed, focusing on either business or experience measures, but not both. In addition, marketers should look at a customer's past and current value in order to predict its future value -- especially the value that will be created if the company makes the right CX investments.
2. Know which customers drive the most value and what they care about. Traditional segmentation analysis is based on demographics or "financial value" (grouping people based on their spending and profitability), but in order to make smart CX decisions, marketers need to adopt a more precise approach that reflects both perspectives – starting with demographic segments and then adding on a value layer to create micro-segments.
3. Invest in the moments that matter to customers. A more comprehensive view of CX value, combined with a more precise view of customer segments, will enable marketers to focus their investments where they will do the most good – specifically, on the moments that have the biggest impact on a customer's overall experience.
4. Measure the total value being created by CX investments and adjust the CX strategy accordingly. Many companies struggle to quantify the value created by their CX investments, either because they are locked into a narrow view of value, or they don't know how to get the right data.
These issues can be addressed by capitalising on the wealth of technology that is currently available and analysing customer data across every touchpoint – from retail and online stores to mobile devices, email and social media. This comprehensive analysis – combined with a closed feedback loop – provides deep and constantly improving insights about customers and business value.
To enable these four key steps, marketers will need to integrate data across their ecosystems, including front-office data (e.g., sales), back-office data (e.g., billing) and third-party data (e.g., individual search). This in turn will require companies to determine where organisational and technology gaps exist, then strategically design systems to enable a comprehensive customer-centric view and break down organisational silos.
Focusing on customer experience value (CXV) will help companies maximise the returns on their CX investments (and delight their customers). Just as important, it will give them hard data about the actual value their CX investments are creating, so they can adjust their CX strategies to create even more value in the future.