This is part three of a four part series on the economic value of Customer Experience Platforms
In part one of the blog series, we looked at a framework for building a business case to invest in customer experience technologies. In part two, we looked at KPIs that drive enhanced customer experience and true financial benefits. In this part, we will look at how contact centers can increase customer lifetime value.
Contact centers are traditionally seen as cost centers; the key measure of success points to reduced cost to serve. That trend is being overridden by a new wave in customer experience. By 2020, we expect Customer Experience to take the front seat in terms of driving competitive advantage, much ahead of product and price (Walker – Customer Experience Consulting). That places a huge upside for contact centers who play a critical role in delivering exceptional customer experience. This will shift contact centers to a more strategic revenue play rather than a cost and efficiency play.
Contact centers are the powerhouse to drive exceptional customer experience all through the customer lifecycle from acquisition, growth, retention to advocacy. Here are some insights on contact center impact on each of these stages:
- Acquire – Contact centers help you acquire customers by meeting customers in their channel of choice at the right time, in the right device. It is not just the ability to proactively engage them in their channel of choice but also providing the right offer based on customer profile and interaction history which drives much higher conversion. Also, through dialers, there is a very effective and efficient way of reaching out to prospects without sacrificing on agent time.
- Grow – Satisfied customers buy more, they spend 67% more on average than those who are new to your business (RJ Metrics). Contact centers have a crucial role in ensuring customers are satisfied. Also, service moments when combined with the right data about the customer drives an easy service to sale conversion.
- Retain – Customer retention is absolutely a key factor to driving revenue. 62% of global consumers have stopped doing business with a brand or organization due to a poor customer service experience (Microsoft Global State of Multichannel Customer Service Report). Lost customer is lost revenue and not just that, it impacts the cost side as well. As per ThinkJar, it is 6 times more expensive to win a new customer than to retain one. Contact centers are absolutely a critical touch for a customer when it comes to retention.
- Advocate – Customers are the best advocate to bring other customers. 92% of consumers trust recommendations from other people—even if they don’t know them personally—over promotional content that comes directly from brands (Neilsen) and word of mouth is the primary factor behind 20% to 50% of all purchasing decision (McKinsey). With an exceptional service delivered through contact centers, there is a greater prospect of converting customers to advocates.
Contact centers need a means to measure CX (Customer Experience) like Net Promoter Score, CX score or CSAT scores. Not just that but a programmatic approach to taking the next best action to improve CX even by a few points. With these improvements definitely comes a true revenue impact. Research by Forrester shows that a one-point improvement in a mass market auto manufacturer’s CX Index score could result in $874 million in increased revenue (Drive Business Growth With Great Customer Experience, Forrester Research, Inc., October 12, 2017).
NICE inContact commissioned Forrester Consulting to build a Total Economic Impact (TEI) model for NICE inContact CXone. For a composite organization with 1,100 seats, CXone can deliver up to $1.1M in incremental gross profit through incremental revenue opportunities uncovered with the dialer. One interviewed CXone customer improved customer satisfaction scores from 59% to 85% and another interviewee was also able to even beat a 33-year old sales record by growing opportunities by 22% in the first year and another 14% the following year.
As you start building your business case for customer experience platform, think through the customer lifetime value benefits. It is not just costs savings. Stay tuned for the next part, which will discuss how various delivery models can impact the financials.