Does Customer Experience
Really Mean Business?
In a changing business landscape, CX matters now more than ever.
As a customer experience leader in a B2B business, I had to sit through many meetings to defend what my team and I were doing. I have been challenged many times regarding the statement: “Customer experience is all well and good, but does it really contribute to the bottom line?” The current situation with COVID-19 has amplified this question as executives trying to drive revenue recovery ask their CX leaders why achieving a high NPS is so important now. This challenge is understandable. COVID-19 has pushed us – and everybody we are doing business with – into a corner. And coming out of this corner requires energy and courage and a certain amount of psychological safety. But first of all, it requires a stabilized cash-flow to make sure your business can survive.
The key question is whether customer experience really means business. This is the time when this question comes to a test.
Spoiler alert: Yes it does, and it actually is part of the foundation of your business success.
Your and everybody’s business success depends on one simple factor: Do you have a product or service that people want and can buy? Viewed like this, your business success is in the hands of your customers – much more than in the hands of your investors and banks. While your people and resources such as money, raw materials or relationships create your products and provide your services, it is only customers who spend their dollars, euros, pounds or francs with you that let you be in business.
But how do you manage CX effectively and connect it so that senior leaders and everyone in an organization fully support it? First, you need to be able to understand and manage how well customers perceive their experience with your business with the same attention to detail as you understand and manage your financials. While most of us have become very proficient in managing financials, it is still only the best companies who also look at customer and employee data to get a more balanced view of future business success.
In my experience, the most successful approach in convincing executive leaders was showing them their own customer experience data and its relationship to financial outcomes. Customer experience data has proven to be highly indicative of future behavior and is therefore a robust indicator of customer lifetime value. It is also a very good early warning system, giving you the opportunity to take action and correct problems before you see a negative impact in your financial results.
Future-oriented executive leaders have realized that measuring and managing CX in addition to getting a good view on your people and your financials is crucial to stay ahead in business. If we want to compare it with a car analogy: Looking at financial performance will give us mostly a look through the rearview mirror where we can see the nice landscape we just passed. It also tells us whether there is still enough gas in the tank (or power in the battery). CX can provide us with the indication of how fast we are driving and in what direction. So the question also for executive leaders is: “Do you know where you are heading? And do you also know how fast you are going?”.
What is also especially important to understand is that the lockdown has made us adopt new habits. Some of our behaviors have changed. Let’s take another simple example. Most of us haven’t eaten in a restaurant for a long time. While it was easy three months ago to go to this or that place for that nice lunch or dinner, it has become very difficult these days. Delivery is only a meagre replacement. But many of us look forward to going out and have this exciting lunch or dinner one of these days soon. Where will you go first? It is highly likely you will go there where you had the best experience, also where you feel a certain sense of loyalty to the place. That way you will also support that restaurant to getting back into business. And let’s be sure, the restaurant will get out of their way to make your experience memorable so that you will come back and tell your friends about them.
This restaurant example highlights what is the case with most businesses, including yours: People remain loyal and buy more from businesses from which they get the best experience and value. If you have provided a solid customer experience before, people will come back – they might even shift business from other places to you. Having provided an excellent customer experience is the entry ticket to a fast revenue recovery. You win if you provide an experience that your customers perceive more valuable than what they can get elsewhere.
When it comes to revenue recovery, managing your customer experience actively has become even more important than before. The lockdown has been long enough for everyone to develop these new behaviors and preferences. Whether in B2B or in B2C, customers are consciously and unconsciously assessing where they will spend the money and will make sure that they get the best value for it. I would argue that it is the job of every leader and in particular every CX leader to understand what this value means for each customer and how we can ensure that this value is better than any alternative offering. Those who understand the needs of their customers and consumers better than their competitors will rebound faster and will be able to build a more sustainable business.
But what happens if you have not provided a great customer experience before the crisis? Perhaps you were lucky that you had a product or service that people needed and didn’t have much choice. But now you have an opportunity to rebound. Post-COVID, customers will look twice and this provides an opportunity to redesign how you perform in the eyes of your customers and prospects: Act now, listen more to their needs and requirements and become their partner of choice.
You have to look at your business like any restaurant owner: It’s not only the menu and the prices that count (they are important, no doubt about that), but it is how it is being served and how you are being treated that makes you want to come back. Customer experience is a key strategy to stay in constant dialogue with your customers and consumers. This dialogue allows you to create a better offering which allows more people to buy and engages your employees to deliver better. And all in, this will support a quicker and more sustainable revenue recovery and allow your business to flourish longer term.
If you haven’t started yet, start now to focus on revenue recovery. And start wearing your customer experience glasses: Actively managing your financials, people and customer experience allows you to actively manage the future of your business especially in the “new normal” because a customer-centric approach also provides important guidance when looking at refocusing business to recover revenue and safeguard important cash flow streams.
ABOUT BJOERN KALIN
Björn Kälin has been heading Customer Experience and Insights Teams at leading global companies in the B2B and B2C area. He is a Senior Partner and Leadership Advisor with StrategyPod, an Advisory company that is guided by analytics and diagnostics to drive strategic alignment, people empowerment, and build mission-critical capability.
ABOUT STRATEGY POD
StrategyPod is a boutique strategic planning and analytics advisory firm with 45 staff based in offices in Geneva, London, New York, Philadelphia and San Francisco. We start with your existing strategy and work with you to leverage and align your existing business capabilities. As a result you improve strategy implementation. We implement lasting solutions for you on topics like strategy implementation, leading change, business portfolio management, growth and value creation, capability building, growing talent and shifting culture. Learn more at strategypod.com.
ABOUT OCX COGNITION
OCX Cognition delivers the future of NPS. We ensure customer experience success by combining technology and data science with programmatic consulting. In our Insights section, we present a comprehensive and evolving collection of resources based on our research and expertise, collected for CX leaders committed to delivering business outcomes.
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