In today's highly competitive business environment, customer experience (CX) is a key focus area for companies aiming to capture and retain loyal customers. With the advent of digital technologies and the rapid expansion of online services, customers have higher expectations due to their exceptional experiences interacting with consumer brands such as Apple and Google.
As a result, their expectations for seamless, efficient, and personalized experiences have increased. As many as 30% of customers will leave a brand they once admired after one bad experience. Facing this shift in consumer expectations, businesses must prioritize CX to secure a critical competitive advantage.
There is little doubt that investing in customer experience (CX) technology is a business priority. Digital-first businesses have transformed the landscape by providing customers access to anything, anytime, and meeting their needs with personalized experiences.
Delivering a positive customer experience significantly impacts a company's bottom line, with 85% of customers willing to pay more for a positive brand experience. Studies show that companies prioritizing customer experience perform better than competitors thanks to higher customer retention, enhanced brand reputation, and better cross-selling and upselling opportunities.
Customer retention
A positive customer experience can increase customer loyalty and retention rates. Increased revenue from existing customers is much more cost-effective than attracting new customers. This makes managing the customer base by offering an exceptional post-sale experience essential during challenging economic times.
Enhanced brand reputation and word of mouth
Customers who interact with a brand that exceeds expectations are more willing to recommend it to their friends, family, and social networks. This organic word-of-mouth marketing is valuable. According to Nielsen, 88% of global respondents trust recommendations from people they know more than any other channel.
Cross-selling and upselling opportunities
Satisfied customers who have had positive experiences with a brand are more likely to buy again and buy more. This can be highly effective in driving revenue growth, as companies implementing cross-selling strategies can see an increase of up to 30%.
By understanding customer needs and offering relevant, personalized product or service recommendations, companies can increase the average transaction value and generate more revenue from existing customers. Adding cross-sell offers to physical messaging tied to easy-to-use online interactions is a strategy helping many businesses to add value to existing client communications. Modern customer communications technology makes extending the messaging to multiple digital channels easier.
Despite increased investment in CX, 73% of enterprises need help managing siloed organizations, measuring ROI, integrating a human-centric culture, and leveraging real-time customer data. Meeting customer expectations in a business environment where competitors are highly customer focused requires buy-in across your entire organization.
Experts predict large-scale investment in digital transformation and CX initiatives to continue in 2023, with robust, comprehensive, customer-first solutions emerging to win and retain customers. But where to start? Our experience shows businesses should focus their efforts on 4 key areas to maximize results in delivering an optimal customer experience:
- Employee experience
- Advanced IT technologies
- Customer journey management
- Digital transformation
To enhance customer experience, it's essential to begin with the employee experience. Research indicates that improved employee experience directly boosts customer experience, with highly engaged employees contributing to up to 147% better performance.
Scott Draeger, VP of Customer Transformation at Quadient, emphasizes that poor employee experience leads to a subpar customer experience. Achieving exceptional customer experience requires a culture emphasizing the importance of going the extra mile - a culture encompassing the entire organization - not just a single CX team. Companies must prioritize their employees and invest in employee experience for a successful customer-first strategy.
As covered in the Quadient eBook Critical Customer Experience Investments, here are 5 business benefits of a highly engaged workforce:
Artificial intelligence (AI), machine learning (ML), internet of things (IOT), data analytics, and natural language processing have advanced significantly over the past decade. For example, with the recent release and adoption of ChatGPT and MidJourney, IT leaders are increasingly incorporating these technologies into their business processes across various industries.
AI tech stacks consist of multiple technologies that enable machines to sense, understand, act, and learn with human-like intelligence. AI-powered solutions are agile and self-optimizing, allowing enterprises to identify customers with the most potential to achieve more with less, improve accuracy, and leverage deep data for personalized customer experiences.
Connected physical systems with integrated cameras, sensors and scanners allow what were once standalone systems to work together as part of a larger whole to serve up collected data for the use of a larger data ecosystem and, in turn, use collected data to make smarter decisions and streamline processes.
For example, today’s mailing systems and folder inserters can connect to enterprise systems to ensure that customers who opt out of digital communications or who must receive them due to regulations are sent mail in the most efficient way possible. All sent mail can be scanned and archived, and returned mail can be quickly scanned to determine which communications are undelivered for follow-up by other teams in the business.
Systems implemented to generate customer communications must leverage the significant amount of data generated in your organization. They must integrate with core systems and leverage future AI technologies' capabilities, benefits, and potential ROI to deliver on customer needs and solutions that bring tangible value and solve real-world challenges.
How will you know that you are making progress in meeting customer expectations? Due to the complexities and challenges of data silos and limited visibility, enterprises increasingly struggle to manage and optimize customer interactions. To overcome these challenges, enterprises require tools to automate customer pathways, facilitate real-time proactive personalization, and foster customer loyalty.
Industry experts at Ovum have identified 12 essential capabilities that form the foundation of an effective Customer Journey Management (CJM) strategy.
These capabilities enable businesses to connect customer pathways in real time and promote holistic, proactive engagement across an enterprise:
- Integrate customer data: Combine customer data from third parties, social media tools, online and offline behaviors, and transactions to create a target audience based on unified customer profiles.
- Identify customer journeys: Analyze consumer interactions, pinpoint crucial touchpoints, and explore customer journey phases to understand the factors that drive customer purchases or attrition.
- Visualize and collaborate: Employ business intelligence, visualization, customer feedback, and mapping tools to collaborate with team members on specific events or issues within customer journeys.
- Define personas: After gathering data, organize user characteristics into persona groups and humanize them by assigning names to represent distinct user segments.
- Develop organizational responses: Outline steps the organization will take to address critical moments in customer journeys and ensure continuous communication with relevant teams.
- Identify touchpoints: Recognize channels, devices, and third-party providers that serve as touchpoints within customer journeys.
- Predict engagement opportunities: Refine marketing strategies, address target problems, and capitalize on trends by anticipating engagement opportunities.
- Map content to journeys: Identify relevant content and map it to each customer journey stage.
- Run A/B testing and simulations: Monitor touchpoints and interactions by testing various journey flows and observing how journeys evolve and coordinate over time.
- Track journey-based metrics and KPIs: Analyze critical moments within the journey map and correlate them to metrics and KPIs to determine which behaviors prompted changes.
- Identify and close experience gaps: Detect gaps in the customer's experience and take necessary actions to bridge them. Pay close attention to how customers feel throughout the journey, and document changes in sentiment on the journey map.
- Operationalize customer journeys: Align customer journeys with employee processes by graphically depicting contextually relevant journeys, promoting transparency and motivating employees to engage actively in critical moments to improve the overall customer experience.
By implementing these 12 essential capabilities, enterprises can significantly enhance their CJM practices, ultimately improving customer satisfaction, loyalty, and long-term success.
The always-connected consumer anticipates seamless access to information, and personalized and consistent interactions across all channels, with companies like Google, Amazon, and Apple setting the gold standard for customer experience. Failing to personalize communications and experiences may lead to consumers switching brands, as technology has simplified the process of taking their business elsewhere. Consequently, organizations face immense pressure to adapt and provide the desired digital experience.
Although embarking on a digital transformation journey can be daunting, particularly for companies grappling with legacy systems, disjointed customer communications management (CCM) infrastructure, and paper-reliant business processes, there is still hope for those trailing behind in this race.
What is digital transformation?
Digital transformation is defined as the integration of digital technology into all areas of a business. Digital transformation isn’t just about offering new digital channels, it’s about streamlining business operations, bi-directional communications and eliminating manually intensive, paper-based processes and workflows, therefore, it might be better described as digital business transformation to incorporate the business aspect of the journey.
Delivering an exceptional customer experience goes beyond merely enabling new digital channels for customer acquisition. Focusing solely on customer acquisition can lead to a widening gap in customer experience. The customer experience encompasses all interactions, feelings, emotions, and perceptions a customer has with a company or brand throughout the relationship and spans various channels. This necessitates a robust customer communications management (CCM) strategy.
A digital-first approach can be practical for designing simple communications that do not require extensive integration or personalization. However, for more complex documents or the modernization of legacy output, an omni-channel perspective is advised, enabling communications across all delivery channels to enhance the customer experience.
What is Customer Communications Management (CCM)?
CCM is creating, delivering, storing, and retrieving outbound communications, including statements, customer correspondence, invoices, policies, and contracts, as well as communications for marketing, new product introductions, renewal notifications, and claims correspondence.
CCM software enables the design, personalization, management, and omnichannel delivery of these communications from a single platform.
While a customer journey map plays a crucial role in understanding the experience across all touchpoints during business interactions, companies embarking on a digital transformation initiative should use them to re-evaluate existing business processes essential for supporting newly offered channels.
Traditional paper-based servicing interactions, such as insurance claims, can be enhanced by replacing paper forms with digital interactive forms on a website or mobile app. However, data must be integrated into backend systems to deliver a streamlined workflow and better overall customer experience.
Digital transformation is not solely about enabling new channels. It also involves upgrading business operations to ensure that customers continue to have positive experiences – from first inquiry to purchase and beyond. The message for companies starting this journey is straightforward. Digital transformation is essential but should always be done with the customer in mind if businesses are to meet rising customer expectations.