Despite notions to the contrary, we are not in the customer experience business to make customers happy. We are in the customer experience business to help our companies achieve tangible business results.
According to one definition I read recently, the purpose of a customer experience team is to meet or exceed “customer expectations, thereby, increasing customer satisfaction, loyalty and advocacy.” Others say the role of customer organizations is to help customer get more value, develop higher and wider relationships, coordinate internal resources, etc.
Sadly, these definitions are incorrect. People are confusing the ends with the means.
The ideas listed above, while laudable in some respects, are laughable when viewed through management’s eyes. Remember, management’s role is to increase revenues and profitability (the ends). So trying to “sell” your vision using misinformed definitions like those above (the means) creates an uphill battle for customer experience professionals. Using “means” terms implies costs even though the goal is to improve financial performance.
Instead, CX professionals must align their efforts to revenue and profit goals (the ends) to earn attention, funding, and broad executive support. Customer experience teams (or programs, or initiatives) exist to improve the financial performance of a company. If they cannot, they should be cut. Put another way, if efforts to increase satisfaction, for example, fail to improve profits or revenue, those efforts should be stopped.
We are not in the customer experience business to make customers happy.
We are in the customer experience business because happy customers are more profitable.
Common business benefits of positive customer experiences involve around two (2) main areas, increasing total lifetime value (TLV) and decreasing customer acquisition costs (CAC):
- Higher margins – 80% of U.S. consumers would pay more for a superior customer experience
- Better cross-selling opportunities – when customers feel they have received fair value, companies create a favorable selling environment
- Reduced failure costs – when companies believe a customer may defect they jump into “hero” mode. Hero mode is expensive as internal resources pivot from growing the business to efforts to prevent the business from shrinking (churn). I also dislike hero mode because it insults customers when they realize that your care/attention is conditional on them threatening to leave
- Decrease churn – loyal, happy customers stay longer which means any previously acquisition costs are amortized over a longer lifecycle (i.e. unit costs decrease)
- Reduced marketing costs – marketing new products to satisfied and loyal customers is cheaper than trying to find and sell to new prospects
- Reduced sales costs – the time and costs associated with negotiating contracts and processing orders are more efficient when companies sell more to the existing base
- Reduced customer acquisition costs – positive word of mouth turns customers into salespeople
Look, the title is deliberately provocative because we most certainly aim for happy customers. Their happiness, the utility of our solutions for them are a means to end. We want happy customers. But the pivot point is that customer experience professionals must start talking about business benefits and stop talking about loyalty, satisfaction, and happiness.
How can you change the way you communicate about your CX initiatives so that they focus on attaining corporate goals instead of outlining the means to achieve those goals?