Customer service as experience: fast, consistent comms boost customer lifetime value
Paragon DCX’s Andy Farmer investigates why the discourse around customer experience (CX) has remained stagnant for so long – and why a couple of customer service tweaks can change the game.
How can fast, consistent customer service level-up your CX offering? / Icons8 Team via Unsplash
Is it me or do we seem to be stuck in a customer experience (CX) time warp? You can’t download a report about digital or technology trends without being assailed with stats and surveys outlining how great CX is key to keeping and gaining customers. Figures like ‘89% of businesses see customer experience as a key factor in driving customer loyalty and retention,’ or ‘increasing customer retention rates by 5% increases profits by 25-95%,’ or ‘95% of customers will stay if their experience is outstanding.’: they’re everywhere.
While these figures tell a familiar story, the last one is almost ten years old. So, why is CX still the flavor of the month 10 years on? And why are we still saying the same things about it? Why does nothing seem to have moved forward (despite continued appetite to read all about it)?
First, it’s easy to say something pithy about CX. No one’s ever going to say they want poor CX; it’s obvious that if you have a bad one, you’re less likely to engage with that brand in the future. So it’s reasonably straightforward to create a report with some eye-catching numbers about how CX affects engagement.
And, second, CX has become a catch-all term. It’s used by CRM and media companies, customer service platform providers, digital agencies (guilty) and brands to talk about anything from how we react to a billboard ad, to a help desk call, or the act of sitting on a train. A customer journey map could mean (to a marketing strategist) a sequence of outbound comms or (to a UXer) a service design interaction map. The term resonates with a lot of us, while meaning different things to different people.
What is CX, really?
And there’s the challenge. Customer experience touches everything. According to McKinsey, CX “encapsulates everything a business or an organization does to put customers first, managing their journeys and serving their needs”.
That’s a nice holistic view. But it doesn’t translate easily into getting your customers to sit up and take notice, to engage/spend/interact more (or for longer) than they normally would, to hit a specific target or goal. Meanwhile, companies have increasingly challenging targets in this near-recession and their partners are often engaged to work in specific siloes. Then, the holistic view of CX goes out the window.
The figures back this up. CX quality fell for 19% of brands in 2022, to the lowest level in 17 years, and 44% of companies admit they still “have a greater focus” on acquisition, even though acquiring new customers costs 5x more than retention. More worryingly, 54% of consumers say brands treat customer service as an afterthought. Anyone who has been tearing their hair out trying to manage their disrupted train or plane journey this year (while being spammed with marketing emails about exotic destinations by the same brands) will sympathize.
39% of consumers have less patience today than they did before the pandemic. Following the pandemic and the rise of both digital self-service and AI, customer expectations have reached an all-time high. 90% of CX leaders agree.
Customer service as an experience
This is where brands and marketers are missing a trick. The reason CX is still on the agenda is that many are operating in specific swim lanes, focusing on the ones that are important to them rather than their customers. This is making customers angry and encouraging them to move elsewhere.
It’s time to remove the siloes, and focus on comms and customer service together. This is ‘customer service as an experience’: proactively taking problems away before the customer has an opportunity to walk. There’s plenty of evidence to show that good customer service experience makes you money, as well as saving you money. 62% of B2B customers purchased more after a good customer service experience, with almost a quarter seeking out vendors for over 2 years after a good experience, according to SuperOffice.
Among many key factors in this increase in engagement and lifetime value, speed of response is the most important. According to a survey by X (formerly Twitter), customer spend can go up by $9 if there’s a quick response through digital or social channels, and up to $20 for responses within 6 minutes. Consistency across channels is important too (as opposed to the number of channels). 55% of customers think this is the most important attribute of good customer service.
At DCX, with our capabilities across marketing technology and platforms, we’ve been taking this holistic approach to comms and customer service for some time. It has worked. For a client in the manufacturing sector, we’ve considerably reduced product service turnaround time through digital service requests and notifications, leading to a 1250% increase in take-up, 5/5 customer satisfaction scores, and a 158% increase in reseller referrals. For a consumer financial services organization, we’ve reduced the time to send out an email communication from 3-9 days to 15 minutes, greatly improving the ability to quickly respond to changing market conditions.
Great CX starts with identifying the most pressing business and customer challenge first, rather than focusing on swim lanes.
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