Despite the evidence, there are countless organizations who fail to include the customer experience when brainstorming ways to improve their business. There are plenty of excuses as to why, the bottom line is that management simply isn’t convinced of the ROI for their efforts.
Unlike other factors, ROI on customer experience isn’t as easy to calculate because it begins with perceived value and emotion instead of a number. This makes it seem, to some, like an unsafe bet or gamble. That isn’t true, though. If you’re looking to convince the big wigs that this avenue holds an immense payoff for your organization, then here’s how to prove its ROI.
Skip the Anecdotal Evidence
The customer experience is primarily anecdotal because it’s based on personal accounts from one consumer to the next. Pitching it this way, however, is a lose-lose situation. Instead, give your higher ups the hard data their brains are wired for.
You could state that companies focusing on the consumer experience are 60% more profitable, that they bring in 5.7 times more revenue, or that 84% of companies focusing on the customer experience report increased revenue. Sticking with the numbers solidifies this otherwise anecdotal approach right into traditional ROI calculations.
The Proactive Nature
While relating customer experience to cost, it’s worth your time to mention how companies use this as a proactive tool. Start by taking the cost your company pours in to crafting messages they think consumers want to hear, then shift to the ROI that generates.
Next, pitch the obvious. How much better would that messaging be if it incorporated feedback from consumers? With a feedback loop, your company can make adjustments as needed based on the customer experience as told by the customers themselves.
This sounds reactive, but the overall approach is a proactive one. Your business is setting up a clear channel of communication for customers to interact with the brand, thus building their relationship to your organization and creating higher retention.
Customer lifetime value is dollar amount assigned to each individual who does business with your company. Your higher ups are already working diligently to assess this number, whether they know it or not, but your customer experience approach is going to give them the tools they need to finalize their solution.
For starters, focusing on the customer experience builds higher degrees of loyalty that translate directly into ROI. The trick is building and strengthening that relationship, followed up with customer value management software to analyze progress.
Pitching this idea starts by explaining that acquiring a new customer costs five times as much as retaining an established one. From there, you simply focus on building a more personalized and intimate experience between the customer and your brand, boosting their lifetime value in literal dollar amounts.
That last part should be enough to grab any executive’s attention because you’re speaking their language. Now, inject a little value into your value approach by stating that market spend on personalization produces five to eight times the ROI their current approach does.
To recap, you want your pitch to lead with the raw data. This shows the financial benefit that focusing on the customer experience offers. Save the cost of the approach for after you’ve fully expressed the ROI.
Provide them with the benefit this approach has over time by building relationships and loyalty. While it isn’t a quick approach, it is a reliable one long-term and ultimately for the lifetime of the company. Finally, equate the timeframe to lifetime value via hard numbers and your pitch is going to be a massive success.