Just about every business leader today knows the importance of delivering a great customer experience. Yet there’s a yawning gap between knowing this and having the ability to deliver on it. Why is that?
Back in 2014, Gartner reported that 89 percent of companies believed CX would be their primary basis for competition by 2016. Four years later, Forrester Research’s 2018 Customer Experience Index for US brands showed only 15 percent of companies offered “good” CX, and not one company offered “excellent” CX. And in a 2018 study by CustomerThink, only 23 percent of survey respondents claimed to have realized tangible benefits from their CX initiatives.
Across the board, while the importance of CX to winning in the market continues to increase—with Forrester reporting that CX leaders enjoyed a 17 percent compound average growth rate from 2010 to 2015, compared with 3 percent for “CX laggards”—the reality is that CX delivery isn’t getting any better.
Now we’re seeing the impact of this performance gap on the market. Organizations are competing on price again, simply because they haven’t figured out how to operationalize the competitive advantage of delivering a great customer experience.
In the retail market, price wars have broken out among companies like Walmart, Target and Costco. And the financial services sector is experiencing price-based competition as well, with JPMorgan now offering free trades, heating up the battle for new investors and millennial customers, according to the Wall Street Journal.
How can companies do better? How can they bridge the chasm between market expectations, aspirations and reality?
It’s crucial to start by building a stronger business case around CX, one that will convince the CEO, the board of directors and, particularly, the hard-nosed, profit-obsessed chief financial officer. You need to build a case based on ROI and quantifiable metrics. It’s not enough to say, “We will boost revenue if we improve the customer experience.” You have to get specific. Only with a convincing business case can you get the funding required to deliver an effective customer experience.
To understand this, consider why CX efforts fall short. The main reason is that companies tend to approach CX as tinkerers rather than conquerors. They tweak instead of committing to full-blown transformation. They may add a survey tool that provides voice-of-the-customer insights. But do they operationalize their findings? Many companies have initiatives, but very few tackle CX in ways that are tied lockstep with their business strategies. Very few truly put the customer at the center of everything.
Why do companies tinker when they should conquer? Because executives are reluctant to invest unless they see a clear and compelling ROI.
Many companies find it difficult to measure returns on their CX investments because it’s not immediately clear how to tie qualitative improvements in the customer experience to financial outcomes. Yet we have found that it is possible to achieve this in a disciplined way by following four key steps:
Read the full article in CMSWire.