Globally, companies lose more than $300 billion due to poor customer experiences.
Nearly 90 percent of chief marketing officers (CMOs) expect to be responsible for the whole customer experience (also referred to as CX) by 2020, and almost two-thirds have already added it to their purview. Considering that big data has taken over decision-making in a big way, be prepared: Marketing professionals will be increasingly required to monitor and analyze CX data, along with the rest of the data-driven marketing numbers they are already crunching.
CX maintains a growing influence on customers' relationships with brands. Since marketing teams are responsible for nurturing the customer-brand relationship as well as advancing leads through the sales funnel to generate ideally recurring revenue, it stands to reason that CX responsibility needs to belong to the marketing team.
The sooner marketing teams develop the aptitude to collect and process big data more effectively, the better prepared they will be for a significantly stronger CX focus.
Maximize customer value to drive business value
Customer value has two dimensions: business value and experience value.
Business value is value created for the business itself (translated into brand awareness, customer engagement and profit) while experience value is really the value created for customers (the infamous "what's in it for me" factor).
As CX becomes increasingly important to customers, brands need to focus on and optimize experience value, or they will risk compromising business value severely.
The immediate challenge marketers face is cultivating a single view of the multitude of data points that represent the entirety of the customer experience. Considering that CX changes dramatically over time and across multiple platforms, how does a brand document, analyze and optimize experience value?
As with business value, measuring experience value requires both cultivated strategy and comprehensive analytics. The challenge with CX is that most companies lack the capabilities to capture and collate cross-channel data from multiple sources and derive practical, actionable insights from that data to move the CX needle.
Companies can meet this challenge in one of two ways. The first option is a time-consuming and expensive (yet customized) process of designing and building proprietary cross-channel data analytics platforms and then hiring a data analyst to translate results into actionable decisions. The second option is integrating a third-party solution that does all the heavy lifting independently.
Third-party services do just that – they provide off-the-shelf integrations into the platforms a brand already relies on as well as the unique ability to build custom dashboards that not only make the waves of data intelligible but also deliver actionable insights across the board. No advanced data analytics knowledge required.
Some platforms are harder to set up and maintain, but if you have the IT resources and are interested in "blended views" of your data, or "mashups" that use complex formulas to merge numbers as they come in from numerous sources, they may be the way to go.
The CMO as the CX champion
Globally, companies lose more than $300 billion yearly due to poor customer experiences. Roughly two-thirds of that $300 billion is funneled to competitors of the losing brands. That right there should be enough to motivate marketing teams to prioritize the critical nature of measuring and improving CX.
Customer experience responsibility has traditionally been distributed across multiple departments, including customer support, product and sales. Decentralizing and dividing CX responsibilities, however, has proven detrimental to a company's ability to strategically build and strengthen it. Considering that today, customers perceive brand value as the multifaceted experience a company provides, thankfully, many marketing departments have now assumed full responsibility for CX.
This shift to a strong customer-centric market is forcing brands to develop personalized interactions and solutions that more specifically address customers' individual needs. As CX has become more important to strategy, the marketing department has (thank goodness) become its champion. If marketers are going to be in charge of making brands more human, then it only makes sense that they'd be in charge of CX as a whole as well.
More value from customers over time
Ultimately, companies should focus on meeting or exceeding customer expectations for one simple, bottom-line reason: Customers become more valuable over time. According to the Harvard Business Review, a 5 percent increase in customer retention can boost profits by up to 100 percent.
Reducing churn by 50 percent can double a company's growth. Shifting the focus from customer acquisition to customer retention builds stronger, longer lasting, and more profitable customer relationships.
Delivering and maintaining a solid customer experience is good for business and for marketing growth. The only way to effectively achieve that is by making measurable progress and that means collating, analyzing, and making informed decisions using data from all relevant sources.
Focus on CX as part of a data-driven mentality
Today's customers have more power than ever, and their experience is essential to sustainable marketing value. CX is about more than meeting customer expectations; delivering a stellar CX is an integral part of customer retention, and retention is critical to profit margins.
In today's competitive, analytics-based business culture, data-driven decisions are the only decisions. The most productive course of action is to remember that measuring and ultimately enhancing customer experience can't be limited to a single part of the funnel, or worse, relegated to a department incapable of managing it.
To ensure a thriving business, CX requires centralization, dedicated tools, comprehensive analytics and, above all, an enlightened, data-driven marketing-focused champion.