The research is overwhelming. Improving key CX metrics can transform your brand, boost customer loyalty, and improve your bottom line.
Attracting customers is just the beginning of the journey toward success. What truly tests your mettle is the ability to retain those customers for the long haul and keep them coming back for more.
Sure, you may land a buyer with a one-time need, but the real game-changers are the ones who become brand ambassadors, leaving great reviews, sharing their experiences with friends and family, and making repeat purchases.
That’s where the true power of exceptional customer service comes into play. It’s not just about making a sale; it’s about forging a lasting bond that shows your genuine commitment to their long-term satisfaction.
A positive customer experience (CX) is crucial to retention and loyalty, which drives higher revenue and increased profits. But how do you measure the real value of customer success?
In this article, we’ll delve into the true value of improving CX to help you meet your overall business goals.
Positive customer experiences are a must-have
A few decades ago, winning new customers hinged on the quality of your product and service. It’s not the same anymore. In today’s competitive landscape, victories are determined by the quality of every interaction throughout their customer journey: pre-purchase, usage, and post-purchase.
This isn’t just about customer satisfaction metrics—you can very tangibly measure the kind of impact that investing in customer experience can have on your bottom line:
Forrester reports that customer experience management platforms can boost revenue as much as 80%.
U.S. businesses lose $35.3 billion annually in unexpected customer churn simply due to preventable customer experience issues.
Based on Forbes’ in-depth analysis and survey, 83% of company executives say unimproved customer experience presents them with considerable revenue and market share risks.
At the same time, 61% of consumers will pay 5% more (at the very least) if they know that they’ll receive a good customer experience from a brand.
Reviews have gained significance in influence purchasing decisions. We also know that customers are more likely to leave a review after negative experience than a positive one. So delivering the most extraordinary customer experience possible isn’t just a nice-to-have, it’s a must-have to drive overall business growth.
“Customer experience drives more than two-thirds of customer loyalty—representing more than brand and price combined. Yet, more than 70% of CX leaders struggle with designing projects that increase customer loyalty and achieve results. That’s because CX leaders spend too much time time fixing existing CX pain points rather than developing new, innovative CX projects.”
Gartner
Creating a High-Impact Customer Experience StrategyThe impact of CX metrics on business objectives
Improving individual CX metrics might be a goal in and of itself, but let’s see how a boost in three key metrics can have a direct impact on your overarching business goals, too.
Customer Satisfaction (CSAT)
CSAT is a powerful indicator of customer loyalty and overall satisfaction with your brand. When you invest in CX and continuously improve your CSAT scores, it also has an effect on larger goals:
Increased customer loyalty: Ensuring that customers are satisfied when dealing with your brand means you can expect a higher customer retention rate. In fact, according to Gartner, customer experience drives more than two-thirds of customer loyalty—representing more than brand and price combined. Yet, more than 70% of CX leaders struggle with designing projects that increase customer loyalty and achieve results. That’s because CX leaders spend too much time time fixing existing CX pain points rather than developing new, innovative CX projects.
Reduced churn rates: Improving your CSAT helps minimize customer churn, which is critical for sustainable business growth. That’s because acquiring new customers costs five times more than retaining existing ones. Plus, the chances of selling to an existing customer are 60-70% higher than to a new customer, with a 5-20% successful selling rate.
Competitive advantage: High CSAT scores can give you an edge by differentiating you from competitors. Because when your customers have a positive experience, they’ll likely recommend you to their friends or leave a positive online review. 90% of respondents in a recent survey claimed that positive online reviews influence their buying decisions.
When you prioritize customer satisfaction and constantly deliver exceptional CX, you can achieve tangible benefits that can help your business. Remember, happy customers are not the only foundation of business success; they’re valuable brand advocates who can propel your growth and profitability.
Net Promoter Score (NPS)
NPS is a valuable metric to measure customer loyalty, satisfaction, and enthusiasm for your brand. You can use this metric to know how much your customers will recommend your brand to others. By focusing on improving NPS, you can strategize and see where you can better your performance, whether that’s in the area of customer support, delivery, self-service options, etc.
For example, if you have a high NPS (at least a score of 70-80), you can say that you have a healthy relationship with your customers, who can now act as evangelists for your brand and generate a positive growth cycle.
Here are three more ways NPS can impact your business:
Strong brand reputation: A higher NPS score reflects a strong brand reputation and customer satisfaction, which is crucial for business success. According to a study by Bain & Company, companies with high NPS scores tend to outgrow their competitors by an average of two to one in terms of organic growth rate.
Increased customer acquisition: Customers willing to recommend your brand are more likely to become advocates and bring in new customers. According to Qualtrics, 69% of customer experience leaders see NPS as their core CX metric. Nearly all customers (96%) say CX is the key to their loyalty, and 89% of them say they’d switch brands if they have an unpleasant experience with a business.
Positive Word-of-Mouth Referrals: As the name NPS suggests, promoters are more likely to spread positive word-of-mouth referrals, increasing brand awareness, improving customer acquisition, and helping you attract more loyal customers.
First Contact Resolution (FCR)
FCR is a critical metric that measures the ability to resolve customer issues on the first customer interaction. Focusing on efficient and effective customer service can reduce customer effort and enhance their experience. This, in turn, leads to higher customer satisfaction and increased operational efficiency.
Here are three more benefits of an excellent FCR:
Enhanced customer satisfaction: When your customer representatives resolve customer issues promptly and effectively on the first contact, you reduce the likelihood of customer effort and frustration. Achieving a 1% improvement in FCR can result in a 1% improvement in customer satisfaction and an increased transactional NPS of 1.4 points, according to a study by SQM Group.
Cost savings: Effective FCR benefits customer satisfaction and leads to operational efficiencies and cost savings. The same study found that a 1% improvement in FCR results in a 1% reduction in operating costs.
Increased agent productivity: Resolving issues on the first contact streamlines the workload for customer service representatives, allowing them to handle more inquiries and provide better service overall. This increased productivity translates to better resource utilization and cost optimization.
The power of customer success
In today’s competitive business landscape, improving your CX is no longer a luxury; it’s necessary to achieve long-term success. Focusing on all key CX metrics, such as CSAT, NPS, and FCR, can help your business drive customer loyalty, enhance brand reputation, and increase your operational efficiency—ultimately boosting your profits.
Ready to improve your CX?
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