With digitalization and globalization, products are becoming more similar, markets more transparent, and prices are increasingly being determined by competition. This means that customer experience is more important. All the more because experience itself becomes a differentiating factor and an ever more important competitive advantage. Nevertheless, companies are hesitating with their CXM initiatives, for frequently they cannot see the ROI (return on investment). Customer experience pays off directly in the form of trust and brand loyalty; these are difficult to measure, however. Learn in five reasons why an investment in customer experience management is worthwhile and which concrete achievements can be gained from a successful implementation.
1. CXM increases customer lifetime value
With a longer customer relationship, customer lifetime value increases. According to a study by the IMWF Institut, it is five times as expensive to generate a new customer as to keep an existing one. Precisely in B2B, according to a Harvard Business Study, keeping existing customers is one of the most important instruments. For increasing customer loyalty by 2% has the same effect as reducing costs by 10%.
2. Greater price acceptance with positive customer experience
Satisfied customers are prepared to accept higher prices. A survey by PWC of 15,000 consumers from 12 countries determined that 16% accept a higher price if the experience is right. That’s why it’s worthwhile to invest in customer experience management, for customers appreciate the good experience.
3. Exploit cross and upselling potential
People who have a good customer experience are ready to buy again. Companies can use trust in their products and services to better exploit cross- and upselling potential. The trend report from ZENDESK 2020 indicates that according to their own statements, 74% of customers are loyal to a brand or a company and 52% will go the extra mile in order to buy from their preferred brands. But be careful: Customer loyalty can vanish very quickly. As the study shows, about half of customers leave after just one bad experience!
4. Better customer satisfaction results in increased employee satisfaction
Customer satisfaction motivates employees, creates better performance, and optimizes services. At the same time, employee satisfaction also affects customer satisfaction.
A study by 2hm& Associates indicates that employee and customer satisfaction depend on one another and thus go hand-in-hand. Employees’ positive attitude results in greater productivity and quality, fewer complaints, and it increases customer satisfaction.
5. More sales due to recommendations
Purchase decisions are a matter of trust. A study conducted on behalf of the digital-magazin indicates that for the selection of products and services, people rely on recommendations from their close contacts (81%) or online ratings (65%). Only satisfied customers make recommendations. People who have an outstanding customer experience become ambassadors for the brand and recommend the company in their private sphere.
However, only those companies that make customers loyal for the long term achieve a competitive advantage this way. This works better when customers are happy. Customer experience management is the prerequisite for a first-class customer relationship along the customer journey and across the entire customer life cycle. That’s how customer experience management makes a significant contribution to a company’s success.