4 Reads That Will Help You Prove CX ROI

At the end of the day, investing in customer experience (CX) is about more than just the score. Sure, it’s great to see a boost in CX metrics like NPS, CSAT, and CES, but what really drives impact? Creating tangible value for your business—and that means proving that sometimes elusive CX ROI. 

Historically, CX practitioners have struggled to assign a dollar amount to the value of their programs. And if that sounds familiar to you, that’s okay! Throughout our decades of experience helping the world’s top brands craft memorable, business-powering Experience Improvement (XI) programs, We like to call them the four economic pillars of customer experience (or the four pillars of CX ROI for short).

Curious about the pillars and how they support a foundation of bottom-line value? Look no further! We’ve packed this blog with information on each pillar, examples of programs who have found success in that area, and assets you can leverage to mirror that success in your own program. Let’s dive in!

Four Ways to Prove CX ROI (and Assets That Show You How)

  1. Customer Acquisition
  2. Customer Retention
  3. Cross-sell & Upsell
  4. Cost Reduction

#1: Customer Acquisition

A well-built voice of customer (VoC) program enables organizations to anticipate what new customers are seeking in a brand and thus be ahead of the curve. 

For example, a major athletic company sought to capitalize on acquisitions by optimizing its surveys to find new types of customers. By targeting respondents between the ages of 18 and 35 with specific questions, the company was able to understand this demographic and expand to new cities and demographics.The practitioners who ran this initiative were able to prove CX ROI by tracking the new customer acquisition, increases in unique customers, and market share growth that it generated.

In “Four Customer Experience Tools That Fuel Your Customer Acquisition Strategy,” we highlight four CX solutions you can add to your tool box that will help you bring new customers through your doors. They include Key Driver Analysis, Competitive Benchmarking, Microsurveys, and Multimedia Feedback. You can read the full piece here!

#2: Customer Retention

Organizations should never underestimate the power of service recovery—70 percent of customers who have a situation resolved in their favor will return to a brand, while a 10 percent increase in customer retention can grow a company’s value by 30 percent. Truly customer-centric companies can easily reach and maintain these percentages.

For example, America’s largest cable and home internet provider leverages VoC technology in their regional customer care centers (and are able to prove millions in CX ROI). They discovered that 3% of all respondents requested callbacks, meaning the brand had 1,000 customer recovery opportunities a month (or a whopping 12,000 per year). By combining this insight with customer lifetime value, the company was able to identify $23 million in recoverable revenue—directly resulting from customer retention! 

Our eBook, “How to Improve Customer Retention & Generate Revenue with Your CX Program” is an all inclusive guide to everything you need to know to make your program a customer-keeping machine. Read it here!

#3: Cross-sell and Upsell

Given that it costs 25 times more to acquire a new customer than to retain an existing one, brands stand to gain a lot from finding new cross-selling and upselling opportunities.

Organizations can leverage CX listening tools to identify what about a brand spurs trust and loyalty from its customers and take action to make those offerings even stronger. After all, nearly 50 percent of customers are willing to spend anywhere from 11 to 50 percent more with a brand they feel they can trust.

An example of this is a large cafe group that was able to capture feedback from its existing customer base, analyze their sentiments, and make fundamental menu changes accordingly. As a result, the cafe group saw a noticeable revenue bump that it was able to link directly to their program insights and subsequent menu changes.

Curious how your CX program can help you identify opportunities for cross-sell and upsell? Check out our white paper, “Understand and Predict Your Customers’ Needs with Customer Journey Analytics,” you’ll learn more about understanding your customer journey, identifying what matters most to your customers, predicting customer concerns and behaviors, and how that information helps you to drive business growth. Get your copy here!

#4: Cost Reduction 

Organizations can use CX feedback and employee feedback to both save money within operations and to simplify their provided experience. Are there ineffective processes that are costing more than they’re worth? Eliminating such costs can save companies time, resources, and revenue. (After all, training one employee can cost an average of almost $1,100!)

A top-tier mattress retailer used CX tools to install an exit survey for departing employees, giving them a greater understanding of employee sentiment. After implementing the necessary changes to reduce turnover and new hire training costs, the company was able to establish a clear link between its CX strategy and the ROI it helped to generate.
This infographic, “3 Ways Your CX Program Can Save You Money” lays out three areas where you can cut costs, lower cost to serve, and still deliver the same great experiences. You can access it here!

How Cost Reduction Factors into Experience Improvement Strategy

I recently put together a Point of View article about the importance of cost reduction, and how going about it a certain way enables brands to reduce costs, lower friction, and build better relationships by improving customer experiences. These are goals that brands can accomplish with a single motion, and the organizations that say otherwise are not, unfortunately, utilizing their experience platforms and data as much as they could be.

As important as cost reduction is, however, it’s one piece of a larger picture that brands should draw inspiration from as they try building better experiences. That picture is what I call the four economic pillars, and we’ll briefly run through them now.

Four Economic Pillars for Your Experience Improvement Strategy

  1. Customer Acquisition
  2. Customer Retention
  3. Cross-Sell/Upsell
  4. Cost Reduction

Pillar #1: Customer Acquisition

Brands should always try to acquire new customers as a matter of course, but a lot of organizations don’t tune their experience platforms & programs to that objective as much as they can and should. A versatile Experience Improvement (XI) program can help brands identify where prospective customers live in the feedback universe, then digest their sentiments to create an experience and product offering that those individuals will find attractive. One reason why more brands don’t succeed here is because they don’t decide where it might be best to look for new audiences before turning their programs on. Be sure to discuss and agree on your program design  before proceeding!

Pillar #2: Customer Retention

We can all agree that it is more efficient for brands to retain current customers than to rely too much on new ones for revenue. That’s why you should use your experience programs and feedback tools to not only seek out new customers, but also ensure you’re keeping tabs on conversations within your existing customer base. The best way to do this is to bring all relevant teams to the table, construct a profile of your existing customer against a backdrop of operational and financial data, then use that info to continuously refine your products and services, as well as reduce friction in the experience you deliver. Customers appreciate a brand that does more than react to problems as they arise.

Pillar #3: Cross-Sell/Upsell

Creating a profile of your existing customers is useful for more than ‘just’ building a better experience for them; it also reveals new opportunities to cross-sell and upsell that group of clientele. Seeking out new sources of revenue is all well and good, but most brands would probably be surprised at what opportunities are just waiting in their own backyards. For that reason, organizations should build a customer profile with both better experiences and cross-selling opportunities in mind. Try to resist the urge to consider this pure sales; rather look at it as helping your customers get the most value from all that you have to offer. 

Pillar #4: Cost Reduction

Cost reduction is very important on its own, but it takes on added meaning when viewed through the lens of these other three pillars. What makes cost reduction exciting  is that brands can achieve cost reduction goals via a lot of the same processes that underlie these other pillars; reducing friction, streamlining processes like customer claims, and the like. Again, brands should not view cost reduction as something that’s mutually exclusive with a better experience. Rather, with the right experience platform, organizations can achieve both goals with one approach.

Click here to read my full Point of View on cost reduction, in which I take a much deeper dive on this subject, and stay tuned for additional material we’ve got coming down the pike on the importance of this and other economic pillars!

2 Ways Reducing Friction Benefits Customers & Brands

Reducing customer friction is extremely important to any brand. However, going about friction reduction in the right way can do more than lower costs for an organization; it can also build a fundamentally improved experience for your customers. Today’s conversation briefly covers how brands can strike this balance with a single approach.

Creating Friction-Free Journeys

Ostensibly, reducing cost is supposed to do just that. However, what a lot of organizations don’t realize is that reducing costs can also reduce friction along the customer journey—that excess effort that customers have to put in just to interact with your brand. Things like repeat phone calls, having to go back to the store, and the like all fall under that category.

Friction creates higher customer dissatisfaction, steeper costs, and, in a worst-case scenario, customer churn.  Fortunately for organizations, this dynamic also works in reverse, which is why it’s all the more important for organizations to leverage their experience programs as much as possible to address customer friction points. Continue gathering feedback, but make sure to analyze its sentiments, share that information with the wider organization, and work with all the relevant teams to come up with solutions and program enhancements. Even fixes like taking a few seconds off of contact center calls, for example, can save brands a lot of money while also increasing customer satisfaction.

The Ties That Bind

There’s a bigger picture to reducing costs than making individual transactions easier for customers: their overall relationship with your brand. Remember that, while evaluating singular interactions is certainly important, most customers don’t think about your company in those terms. Generally, customers think about their entire relationship with your brand from beginning until now, which is why going about cost reduction with friction elimination in mind is so fundamentally important.

When customers feel like all their interactions with your brand are frictionless, you create a more human connection and a more loyal customer relationship. Cost reduction isn’t just about saving money; it’s about refining your customer experience into something that keeps customers coming back for more because they know you care about them as people.

So, how else might brands use cost reduction to create a more human experience while also strengthening their bottom line? Click here to read my full-length point of view on this subject and to learn more about how cost reduction can create Experience Improvement (XI) when it’s done meaningfully.

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