Enterprises are increasing direct customer interaction with the companies, vendors and partners with whom they do business, which is placing more importance on delivering a better customer experience (CX). These enterprises have learned that customer experience and satisfaction is a differentiation that is no longer limited to B2C companies.
Maximizing profits in today’s environment not only requires penetrating new markets and renewing licenses, but also focusing on retaining the company’s current customer base. How a company treats its customers or, more importantly, how they perceive they are being treated, can lower or increase your churn rate.
In addressing this very issue, Jam Khan, Director of Professional Services at Gemalto, said in a presentation, “Customer satisfaction is neglected in our [enterprise] area.” As a result, the question is no longer whether a company should exert the same effort in CX as in other segments of its organization, but rather what level of return can the company expect after placing an emphasis on improved CX?
The following are six reasons noted by Khan as to why customer satisfaction drives better results for enterprises.
A Point of Differentiation
There is more parity now with the product and services provided by enterprises than ever before. The digital ecosystem, the very technology that is creating innovative solutions, is also responsible for disseminating the knowledge and making it more accessible. Additionally, these new iterations will be cheaper and more flexible, in most cases neglecting the CX. For established organizations, delivering the best CX possible will be a differentiation that will appeal to new customers and retain existing ones.
Leading Indicator of Consumer Repurchase Intentions and Loyalty
When your customers are satisfied with your product and service, they are more likely to repurchase, try new solutions and remain loyal to your brand. These same customers also become an invaluable source of marketing data for beta-testing and product launches.
Reducing Customer Churn
Customer churn can be boiled down to two key factors: a) the customer did not receive their desired outcome from the enterprise, or b) something happened to the customer that may well beyond the control of the enterprise (e.g. the customer was acquired or went out of business). If the business is still solvent, delivering the outcome the customer desires in terms of the solution that is being offered and a great CX is a sure fire way to lower churn.
Increases Customer Lifetime Value
If the customer churn is reduced, this in turn will increase the lifetime value of the customer because they will be around that much longer.
Reduces Negative Word of Mouth
We are more aware than ever of the power of social media. Whether it is a Tweet or a blog post, a negative comment can create devastating effects on the company, oftentimes with an immediate impact. If your customers don’t have a reason to say anything negative about your organization, that is one less fire to put out.
It is Cheaper to Retain Customers Than Acquire New Ones
The price of new customer acquisition has been well documented, often costing five to seven times more than retaining your current base. By providing a superior CX with just a percentage of what it would cost to acquire new customers, the retention rate will increase and will last much longer.
These are commonsense approaches that are still not being carried out by many organizations. According to Khan, putting customer retention into action requires knowing where to focus your efforts. He recommends paying attention to the enterprise end user, internal customers and channel partners.
This means managing the enterprise end user experience by providing easy access to data, such as detailed purchase information and self-service options. Next, this is followed by improving the internal customer experience by having a single system that is fully integrated to eliminate disruption and increase the rate of adoption.
The final step is extending the CX to the channel because, according to Khan, poor distribution is a leading cause of failure. He suggests providing a more flexible environment for channel partners with improved visibility to indirect customers so they can easily manage entitlement such as splits/transfers/reassignment.
In conclusion, a better customer experience is now a competitive advantage after consumer expectations have migrated to the enterprise. What Gemalto offers is the backend that will connect these very critical points with portals that can be accessed by everyone across the value chain with a transparent view of their purchases, services, and entitlement under one platform to deliver a better customer experience.