Customer experience writer and keynote speaker Stan Phelps once said, “Customer experience isn’t an expense. Managing customer experience bolsters your brand.”
In the present-day business landscape, companies face growing demands to provide excellent customer experiences while ensuring their finances are well-kept. For many, this can be challenging, as balancing these two goals can sometimes conflict. Yet, the relationship between CX and a company’s financial metrics can be challenging to navigate. Even though this is the case, numerous studies in recent years have demonstrated how customer experience directly impacts revenue growth.
According to Entrepreneur, the previous 20 years have shown that businesses have prioritized heightening the customer experience and will continue to do so over the next five years. Business owners continue trying to keep up their operations in digital spaces with new technologies while maintaining a human element. But, they are finding that costs can outweigh the benefits if not approached with care.
Delivering exceptional customer service often comes at a cost. And, allocating resources for adopting new technologies to enhance the customer experience can be resource-intensive. If you are a business leader, you should not view customer experience and finances as a paradox. Instead, you should see them as two sides of the same coin. By investing in a strong customer experience, you will invest in your future financial success. This article takes a closer look at how you can deliver an excellent customer experience, all while achieving financial growth for your business.
Always Prioritize People over Profit
Perfecting the customer experience can be a challenge for any business. This remains true whether you are the owner of a large corporation or a freelancer looking to make the process easier for your customers. Every type of business is looking to make a profit, and every customer knows this. But, ensuring your customers are beyond satisfied by exceeding the expected level of service is what makes the biggest difference.
In her best-selling book, “Creating Superfans: How to Turn Your Customers Into Lifelong Advocates,” customer experience speaker Brittany Hodak discusses prioritizing people over profit. If you do, you’ll have both, but if you do it inversely, you’ll always be chasing new people to serve the profit.
When discussing the value of customers, Brittany notes that when inevitable customer mistakes or challenges come around, it is better to focus on the customer’s experience and satisfaction rather than the bottom line. “Of course, there are many factors that go into individual decisions,” she says, “but try to approach every instance thinking about the lifetime value of the customer and not just the value of the single transaction.” This can mean encouraging employees to address issues before they become major road bumps for your company or providing an exception for a customer to guarantee they will return in the future.
Align the Right Internal Positions
Frequently, we see businesses work hard to align customer experience positions with that of Chief Financial Officers. However, many leaders today find that putting the CXO under the CFO implies to the customer that the company cares far more about money than it does experience. While experience is still a pillar of the internal organization, the goals and objectives do not match the customer’s expectations.
According to The New York Times, such a relationship is no longer relevant in today’s marketplace due to the last decade of technological advancements making customer relationships and expectations far more intricate and progressive. The integration of data analytics and customer targeting has made it so that “Keeping customers happy is now becoming the job of everyone in the company, not just a single department.” Even smaller teams have the capacity to deliver memorable experiences to customers with strong communication, collaboration, and consistency.
Yet, redefining customers and service is the key for every department to better connect and serve each customer. Even so, it is agreed that the Chief Executive Officer is the most important internal position for the CXO to work closely with. Research published by the Harvard Business Review in 2022 found that “CEOs who engage directly with customers can help improve products, boost customer satisfaction, and create a competitive advantage.”
Invest in Customer-Centric Initiatives
Another way to overcome the paradox between successful finances and customer experience is for businesses to invest in customer-centric initiatives. More specifically, they should invest in ones that can deliver long-term strategic growth.
For example, placing greater focus on both customer loyalty and positive word-of-mouth marketing aligns well with effectively managing operational costs for financial sustainability. This may sometimes be more challenging for startup companies and small- to medium-sized businesses. However, customer loyalty and experience should never be sacrificed.
Brittany Hodak provides a great example of this in her book when providing an anecdote of her father looking to purchase a new lawnmower at a local store. As other customers have experienced, he needed a new product, but the store was out of stock of the brand and model he desired. Instead of waiting until the following week for the product to be shipped to the store, Brittany’s father asked to pay for assembly of the floor model instead, and the shipped product would be the store’s replacement.
Initially, the in-store employees viewed such an idea to be an economic loss for the company, insisting that it was not possible to accommodate their customer’s requests due to store policies. However, as a result, the company lost a long-term customer. If the company had instilled more customer-focused initiatives throughout the company, they would have gained greater customer loyalty and positive customer referrals, all without sacrificing overhead operational costs.
Identify New Sales Opportunities
It is becoming common knowledge today that it costs a business far less to retain a current customer compared to acquiring new customers. Meanwhile, heightening your company’s customer retention efforts can significantly increase annual profits by at least 25% and can save U.S. companies billions of dollars each year.
So, instead of having the slight possibility of selling to a new customer, businesses should identify new sales opportunities with current customers for the greatest outcomes. By focusing more on cross-selling and upselling opportunities, companies will see customer behaviors and connections flourish because their needs are being met. Together, not only do cross-selling and upselling opportunities deliver room for personalization or customization, customer satisfaction, and financial stability.
Peter Daisyme, the co-founder of Hostt, notes that these are only a couple of ways your business could steer more significant revenues. Your business can also accomplish this by renewing relationships with former customers, expanding a new line of products or services, reviewing the customer journey in your sales funnel to reduce gaps and friction points, exploring a different audience, or improving your brand presence and reputation on social media. By finding new sales opportunities with current customers, employees and leaders are given the tools to enhance customer relationships and drive greater competitive growth.
Review Pricing Models and Strategies
In 2019, the National Institutes of Health looked closely at the relationship between pricing strategy and business performance outcomes. Many regularly assume that product or service price increases and decreases will scare away customers. But, the reality is that this is rarely the case. The authors note that “An effective pricing strategy can improve business performance and lead to positive outcomes such as customer satisfaction, loyalty, and customer retention, especially for business entities.”
This can be whether you lower or increase prices, depending on what you aim to achieve for your company. Lower prices can attract new customers, increase or maintain market share, or outstand the competition. Meanwhile, increasing prices can indicate to customers that your product or service is of higher quality. And, it can suggest to customers that they will gain greater brand satisfaction. No matter which direction your pricing strategy is aimed, Peter Daisyme suggests remaining transparent with your regular customers when changing pricing. This is because they are more likely to respond positively – as long as the price hike is not extreme.
Delivering Both CX and Financial Sustainability
To deliver a positive customer experience and a strong financial bottom line, business leaders and those interested in personal finance must think more about what they can do for their customers. Selling your product or service is what your company does. However, it is crucial to recognize that the goal of any company is not to simply make a profit.
Instead, balance profits with customer satisfaction and recognizing your customer’s full profit potential. By doing so, revenue growth will naturally find its way to your doorstep. Likewise, learning to better allocate business resources allows companies to enhance the customer experience. And, they can do so while simultaneously keeping up a healthy financial bottom line.
Featured Image Credit: Photo by Mikhail Nilov; Pexels; Thank you.
