Bad Customer Experience Isn’t Just a Reputation Problem—It’s a Revenue Problem
There is a widening gap between the digital experience companies think they deliver and the experiences that customers actually have. Our research indicates that 89% of businesses think customer experience (CX) is a key differentiator for them in the market—but at the same time, 85% of organizations find that understanding why customers struggle in the digital experience and what the impact is on revenue is a major challenge.
Addressing the digital customer experience gap is essential—not just for its implications on your reputation, but also for its ability to erode revenue.
The Impact of a Bad Customer Experience on Revenue Potential
When we think about the impact of bad customer experience on revenue, it’s easy to jump straight to the retail/ecommerce industry. However, a recent study found that a simple one-point increase on Forrester’s Customer Experience Index resulted in major revenue gains for companies across multiple industries—$175 million for a wireless provider, $118 million for luxury automakers, and $65 million for upscale hotel chains.
More broadly, an Oracle CX survey discovered that senior executives estimate that failing to offer customers a positive and consistent experience across all channels can diminish annual revenue potential by 20%. This would mean that a $2 billion company would easily give up $400 million in revenue by not truly understanding how customers experience their digital channels.
Offering a multi-channel experience is already a widely accepted standard for most industries. If you truly want to differentiate your company based on CX, you have to close the gap between the experience you think you’re offering and the one customers are actually experiencing.
The Role of Digital Customer Experience Analytics in Realizing Revenue Potential
Companies are recognizing that they aren’t investing enough in online customer experience. According to Gartner’s February 2016 research “How Marketing Can Lead Organizationwide Customer Experience Maturity,” without successful CX management it will be difficult to meet your business and marketing goals due to the leaky bucket of low customer retention and low levels of advocacy. These failures will lead to higher levels of marketing spend to capture and retain customers.
Our survey found that 71% of businesses believe this lack of investment is impacting overall growth. As people continue to realize the connection between digital CX and revenue, customer experience analytics (a relatively new area of interest) will take a more substantial shape across many industries.
However, customer experience analytics (CXA) solutions come in many flavors. When you’re looking to make a CXA investment that can help you close the CX gap and achieve your true revenue potential in the digital era, there are a few characteristics you should keep in mind:
- Timely and Actionable CX Insights: You need to be able to score and monitor high-level CX KPIs, analyze website abandonment, quickly prioritize digital friction and more. All without burdening teams with management and maintenance tasks.
- Leverage CX Data for Overall Strategies: We have more data than we know what to do with today, but the right CEA solution will help you capture and analyze granular data that is necessary to refine an overarching CX strategy.
- Collaborative CXA Provider: There’s no use in integrating a solution specifically suited for today’s CX needs—the solution has to adapt while your business grows.
- Data Privacy Is Everything: The greatest customer experience is useless if it results in a massive data breach and loss of customer trust. Your CXA solution must work closely in line with regulatory requirements and legislative guidelines.
- Keep Up with the Latest Tech: The technology within and external to your business transform it on a regular basis. Whether you’re moving to the cloud or changing the way you deliver customer content, your CXA solution must keep pace.
Implementing a CXA solution with each of these characteristics will help you avoid revenue erosion as a result of a poor digital CX.
If you want to learn more about the impact digital customer experience (both good and bad) has on your business, download our research report, Counting the Cost of Not Knowing.
John Thompson, CEO, UserReplay