Every organization exists and evolves because we, as customers, see value in our lives. In the broadest sense, a customer is anyone who interacts with an organization whether they are an employee, paying for a product/service, or simply seeking information. CX captures the full spectrum of interactions a customer has with an organization across their entire journey and how an individual feels about their experience.
CX is more than just making customers and employees feel good. Let’s dig into a real-life example of CX in action and how my positive experience translates to financial ROI.
Smoke Detector: 1, Lindsey: 0
Last Saturday around 3:00am the smoke detector in my bedroom began chirping. Groggy, I climbed onto a chair to change the battery. When I stepped off the chair, I landed wrong, and my ankle rolled. When I woke up later that morning, my foot was severely swollen, I couldn’t walk, and I was in pain. Concerned I might have broken my ankle, I was anxious to see a doctor in fear the issue could get worse if left untreated.
Not being able to walk makes walking into a doctor’s office…difficult. Lucky for me, my primary care provider has a very user-friendly phone app which gave me the option to schedule a video visit with a member of the medical team. Video visits are offered 24/7, and the expected wait time is five minutes or less. After requesting the video call, it took about four minutes for a nurse practitioner to greet me and begin assessing my ankle.
Ultimately my ankle wasn’t broken, which the nurse practitioner was able to diagnose by simply asking me to show her my ankle by flipping my phone camera around. By the time I hung up, she had not only eased my concerns, she also gave me suggestions on treatment via a recovery packet sent through the app’s message center. To monitor my recovery, I sent photos of my ankle using the message center until the medical team felt satisfied with my progress. Quickly and without a lot of effort, I was able to get a diagnosis, receive a treatment plan, and track recovery progress without ever leaving my couch.
CX = Financial ROI
As a result of my experience, my medical provider has one very satisfied customer, but how does this experience translate into financial ROI for organizations and how can this value be quantified? In the case of my medical provider, it’s from positive-word of mouth and Net Promoter Score (NPS), a simple tool used to indicate how likely I am to recommend their services to someone else. My positive experience increases the likelihood that I’ll share this experience with a few of my friends who may decide to switch medical providers, increasing my doctor’s customer base and overall company revenue. More satisfied customers mean less customer complaints, and fewer customer complaints reduces expenses in an organization’s time, effort, and resources spent needing to satisfy each individual grievance.
My positive experience also means I’m now a customer for life. My provider was able to successfully retain me as a customer and will continue to generate revenue from future interactions. Customer experiences like this impact my loyalty and open me up for future sales and lowers my price sensitivity. Customers are not always looking for the best deal, they are looking for the organization who can meet their needs with the most accuracy, least amount of effort, and through an enjoyable experience, even if that means paying a premium.
Finally, the fact that I was able to connect via video chat with a provider means that there was one less trip to a brick and mortar doctor’s office. My nurse practitioner supported me from her home, resulting in a savings of overhead costs for the medical provider and personal savings on travel for the employee.
Myth Busted… CX Value Can Be Quantified!
In a 2019 study, companies focused on CX generated a total return of 45 points higher than the S&P 500 Index average over an 11 year period. Conversely, companies slower to adopt CX practices were 76 points lower in return than the broader market. Additionally, Harvard Business Review found companies with a Customer Experience Score of 10 (on a scale of 1-10) had an annual revenue per customer that was nearly 2.5x higher than a company receiving a Customer Experience Score of 1.*
Organizations exist to fill the unmet needs of their customers. Companies can no longer afford to avoid adopting a CX focus if they wish to remain competitive and profitable. As the data shows, CX is not just about making your customers feel good; your customers’ perceived interactions with your company contribute not only to their overall experience but to the health of your organization as a whole.
What have you heard about CX that needs myth busting? Drop me an email and let me know what topics you’d like us to dig into next.