Finding the ROI in CX

Setting, reviewing, and updating customer experience program goals are the key to measuring CX performance and continuously improving it.

Customer experience (CX) is top of mind for every brand now. Consumer expectations keep rising — a recent Salesforce survey found that 88% of customers (B2C and B2B) say experience matters as much as products or services when they’re interacting with a company, up from 80% in 2021. The impact of good CX is clearer than ever — CX leaders outperform the S&P 500 over the long term, while CX laggards perform about half as well as that index. Yet CX quality among U.S. brands is sliding “back to early-2020 levels,” according to Forrester.

David Fletcher, SVP, ClearSale

It may be surprising that with so many brands investing in CX, the resulting experiences are generally on par with the early days of the pandemic. However, CX covers a lot of ground, including initial engagements, purchases, and customer service interactions. Coordinating all of those elements requires a comprehensive, data-driven approach that addresses goals, strategies, and metrics. The most carefully selected KPIs won’t do much for your CX program if they’re not part of a larger strategy. Likewise, a CX strategy that doesn’t include the right metrics can’t adjust and improve. Most importantly, the strategy and KPIs must support a clearly defined set of CX goals for the brand. If any of these areas are lacking, the CX program won’t perform as expected.

Defining CX Goals

Setting, reviewing, and updating customer experience program goals are the key to measuring CX performance and continuously improving it. This is true whether you’re in the planning stages for a CX initiative or already have a CX program in place. The types of goals you set often depend on the maturity of your business and change as your company grows.

For example, a relatively new business may invest in CX primarily to drive new customer acquisition. In today’s competitive digital commerce landscape, that means creating omnichannel discovery and purchasing experiences that align with what the customer demographic expects. For example, Gen Z and younger millennials might use TikTok, YouTube, or Instagram to decide what to buy on their phone using Buy Now Pay Later, while an older customer cohort might prefer highly targeted email offers that take them to a purchase page. Show these new customers that you can anticipate their needs — something 62% of customers said they now expect — and they’re more likely to do business with you.

A business at a more mature stage may leverage CX tools to target current customers with personalized offers so they’ll buy more often, spend more per ticket, and deliver more lifetime value. The more engagement customers have with their brand, the more first-party data the business obtains to refine offers, shape loyalty programs, and deliver more personalized customer service.

A mature business with a well-established customer base may focus on optimizing its CX initiatives by fine-tuning the customer journey to reduce friction, increase satisfaction, and avoid losing customers to competitors. That may mean thorough analysis of the customer’s purchasing journey to identify friction points on the website or app, including sign in, navigation, and checkout.

Setting CX Strategy

Regardless of a company’s stage of maturity and related CX goals, the overall strategy should focus on delivering what Forrester calls “high emotional quality” in customer interactions. Their research found that the top-performing 5% of brands gave customers 15% more “emotionally positive experiences” than competitors.

What are the elements of a positive, high quality customer experience? ClearSale surveyed more than 5,000 online consumers evenly divided among the U.S., Canada, Mexico, Australia, and the U.K. to understand their attitudes about CX in 2021. The study found that the top three reasons these shoppers continued to buy online rather than in stores were price, fast shipping and delivery options, and convenience. Convenience at checkout is also particularly important: 71% of consumers said they always or sometimes pay for online purchases with a digital wallet like PayPal or Apple Pay instead of entering their credit card into the store website.

Experiences with fraud can mar the customer experience. 15% of the consumers surveyed said they’d had at least one online payment fraud experience in the previous year, and 84% said they would never shop again on a site that allowed fraud with their payment card. However, overly rigid or poorly optimized fraud control programs can also have a negative CX impact. 25% of consumers said they’d had an online order declined in the previous 12 months, and 40% said they’d boycott a site that rejected their order.

Businesses need to carefully plan and review their CX strategy to ensure they deliver optimal pricing, preferred shipping options, a checkout process that accepts digital wallet payments to minimize data entry, and accurate fraud screening to prevent both fraud and false declines.

Selecting CX KPIs

With goals and strategies in place, companies can identify the right KPIs for their CX programs. Those can be customer acquisition rates, repeat visits and purchases, cart conversions, personalized offer click-throughs and conversions, average ticket value, loyalty program participation, NPS score, and customer churn rate. Because of the importance of checkout in CX, it’s also a good idea to include cart abandonment, digital wallet usage rate, fraud, and false decline rates as KPIs.

These data points can help you identify gaps in your customer journey so you can close them to improve CX. The data can also show you where your CX program performs best, so you can build on those strengths. Over time, as your company matures and your CX goals change, you may need to adjust your KPIs to monitor new strategies to reach new goals. At every stage, though, ongoing KPI monitoring can fuel continuous improvement that increases ROI on your CX investments.

Original article at: https://thecustomer.net/finding-the-roi-in-cx/