Is There ROI from Customer Experience? (Yes, read the news – this is no longer a debate)
A recent horrific customer experience incident with a major US airline resulted in a stock drop by several points—a one-day loss of over a billion dollars for the company. While the incident is isolated and still hazy on full details, what is clear is that we are living in an age where customer treatment is extremely transparent, and brands who don’t value or nurture this key component of their business will take heavy, heavy financial hits.
The fallout from this disaster will likely hurt customer loyalty to the brand for quite some time, and wooing customers back into a trusting state will require a culture shift. Clearly, somewhere along the customer experience chain, the treatment of passengers did not live up to the company’s brand image—and to make matters worse, the CEO’s initial unsympathetic response only solidified the belief that customer experience isn’t a real priority for the airline despite what they say.
Again, while the details about the issue are still unclear, the point is this:
There is clearly a ROI from customer experience these days, but more importantly, customers are stronger than ever in their resolve to support each other and fight back against companies that don’t treat them (or their peers) well.
While the above is an extreme example of how one terrible customer experience can affect business returns, it brings to light a huge shift in the consumer atmosphere. Customers, no matter how desperately they need your product or services, aren’t willing to roll over and cater to your demands to get them anymore. The enforcement of policies that are outdated, unfair or simply inconvenient are no longer tolerated, and strong-arming customers into accepting them will only harm your brand.
The airline incident is important on so many levels for those seeking to learn something from it. First (this one should go without saying) customers are people and deserve respect and kindness—especially when you are inconveniencing them. Second, when it comes to company culture, how you view customers from the top down truly affects every facets of your company’s customer experience efforts. No matter how much money you spend on marketing or fancy slogans, your ability to live up to these promises is what really matters. This all starts in the executive boardroom and with leaders’ true beliefs in the value of their customers—not just as numbers—but as people. Finally, on a financial level, customers’ experiences are truly the crux of business success in today’s market. This airline’s mistake was so extreme that tracking its effect in the stock market was easy to calculate, but think about all the other thousands of poor experiences happening as well. They might not be as easy to spot, but they are there, and they need to be tracked, managed, repaired and saved because they are also costing you billions.
Even beyond money, treating customers poorly is simply a sign of bad management, outdated company philosophies and even poor treatment of employees. Everyone expects better these days, because better actually exists, and it’s not hard to find. Generally, you can find better service and companies with a few swipes of your finger or the click of a mouse.
Brands that take customer experience seriously are spending good money on their technology and teams because they definitively bring large returns. These companies are testing out new customer loyalty programs and state of the art communication methods, and are creating better employee, company and customer policies that focus on connecting with the customer on an emotional level. To some, this type of work initially sounds frivolous, unsubstantiated and too sentimental, but as we are seeing time and time again, the truth is quite the opposite.
Simply put, there is no longer a debate about whether there is a ROI from customer experience. The answers are in the news, the stock market, social media rants and memes. The big question now is: how do you become a brand that takes customer experience to heart and fulfils consumers’ big expectations?
It’s not a simple one word answer by any means, but it begins with learning about and connecting with every single customer. It grows when you show them you actually care, rather than telling them you care. And, it requires investments in your people, analytics, measurement capabilities, communication methods and the overarching culture that your brand has towards the people (never forget that they’re people) who are the most important part of your business. Without them, their loyalty or trust, you don’t have a business.
If this post interested you, read our earlier post on the case for employee engagement and how it leads to revenue and ROI here.