The spotlight on customer experience (CX) as a critical frontier of competition among businesses is being shone ever brighter in 2023.
Research from the International Data Corporation reveals that 77% of brands believe CX is a key competitive differentiator. Further, 65% of PwC survey respondents would become long-term customers of those brands able to provide positive experiences throughout the customer journey.
The age-old adage “the customer is always right” has been amplified. No longer is CX a simple, isolated afterthought. Indeed, it has risen to the fore as a critical business function as organisations recognise the imperative to respond to ever-changing and increasing consumer demands to drive improved customer satisfaction, loyalty, and ultimately, revenue.
For this reason, organisations are investing increasingly into their CX strategies.
This spans several areas. In the case of communications, firms are embracing a true omnichannel approach, enabling agents to converse with customers via a variety of different channels – be it social media, video, live chat, or email. Not only does this approach allow organisations to record and review all conversations to facilitate improvements to engagement, but it also ensures customers don’t waste time repeating their details if they change communication channels.
Further, investments into data analysis are ramping up as enterprises work to improve CX. There’s no greater source of insight into customer expectations, satisfaction, behaviours and demands than the customers themselves. Through data analytics, organisations can update their services and product offerings in an informed manner, adhering to the exact requirements of their prospects and customers.
The challenges with traditional CX measuring tools
Given the potential merits, it is widely accepted that investing in CX is a no brainer. Indeed, statistics show that 58% of customers are willing to pay more for a better customer experience. However, it is equally important to ensure that these investments are both relevant and generate genuine value.
Businesses must therefore prioritise measuring the return on investment (ROI) of their CX strategy.
Not only can this enable companies to ensure that investments are paying off, but it can also better inform future investment decisions, and identify areas where incremental improvements can be made to the CX strategy.
With that said, measuring returns on CX investments has traditionally been tricky.
Indeed, it can be difficult to ascertain the financial impact of CX initiatives when common measurement methods such as surveys are often subjective and unreliable.
There are several issues with feedback loops being solely driven by customers. Organisations may experience personal biases when conducting surveys as several factors may feed into responses, driving unreliable answers on potentially sensitive or contentious issues. Further, non-personal biases may also arise from respondents not understanding questions properly, and therefore selecting answers that may not reflect their genuine views.
Increasingly, customers are also becoming concerned about parting ways with their personal information and views via online surveys, while others simply become irritated by survey completion requests, opting not to respond or giving answers that simply are not thought out nor reflective of their actual sentiment.
Exploring more effective ways to measure CX ROI
Given these challenges, organisations need to find alternative, more effective ways to measure the ROI of their CX efforts.
Thankfully, there are several ways in which organisations can calculate this and demonstrate the value of CX initiatives and their ability to support wider business objectives. Take the monetary value of time savings that can be unlocked from efficiency gains as an example.
Let’s say your contact centre handles 1,000 customer contacts a day, with 10 agents working eight hours per day required to meet these demands. Now, let’s assume you implement an omnichannel solution that reduces the average time to resolution by 30%. If your agents previously spent five minutes per customer contact previously, this would be reduced to 3.5 minutes, with a saving of 1.5 minutes.
Spread across 10 agents handling 1,000 customer contacts a day, this would result in a total time saving of 1,500 minutes, or 25 hours per day. If the hourly wages of your agents are £10 per hour, then the monetary impact of these changes would be £250 in savings per day.
In a typical year, there are approximately 260 workings days, and employees who work a five-day week must receive at least 28 days’ paid annual leave a year, including public holidays. Therefore, each full-time contact centre agent would typically work 232 days a year.
Calculating 232 days by the £250 in savings per day, we arrive at £58,000 in savings per year across the 10 agents – a significant sum that could be used on training or development initiatives.
Aligning ROI calculations to business outcomes
Of course, this is just one simple way in which the ROI of CX initiatives can be quantified among many.
Want to reduce the resources dedicated to first contact resolution? By implementing self-service options, 20% of customer service agents’ time could be freed up. What about reducing silent time? Analytics can also be implemented to identify where process efficiencies can be made.
Any effective CX strategy should seek to achieve and quantify the true monetary savings of initiatives to show that those investments will ultimately pay for themselves.
Thankfully, with the right tools and technologies, we can measure the ROI of any business outcomes.
Backed by this kind of quantifiable data, CX leaders can offer a better understanding of the financial impact of CX strategies to secure the confidence of senior decision makers in investing in those initiatives that are becoming an increasingly critical competitive differentiator.
About the Author
Jason Roos is CEO of Cirrus. Cirrus is an ASX-listed Managed Service and IT solutions provider, delivering to clients across Australia with a flexible approach to advising, integrating, managing and securing their IT environments.