The Rewards and Pitfalls of Customer Experience
In our recent webinar, No More Lip Service: Customer Experience in the Age of the Customer, guest speaker Kerry Bodine shared her research and views on the important topic of customer experience. This article is based on the content of the webinar.
Customer experience for many industries is worth billions of dollars of incremental revenue every single year and the contact center plays a large role in delivering this incremental revenue. Imagine that you have 200 agents in your call center. They are each taking 50 calls per day. Let’s say you are open 24/7, 365 days a year. That comes out to four and a half million calls. Now imagine you have 1,000 agents; you quickly move to 18.2 million calls. Up it to 3,000 and you get to 54.6 million calls. Let’s say that each of those 3,000 agents are taking 100 calls a day—that is 109.2 million calls over a course of the year and that is 109.2 million opportunities for you to create a great customer experience.
Let us compare this to the 2013 Super Bowl. The number of Super Bowl viewers was 108 million, down slightly from the previous year. The advertisers who wanted to get in front of these viewers had to spend four million dollars for a 30-second spot. This was an increase from the previous year’s cost even though viewership was down. Also, don’t forget that they have to pay expensive ad agency fees to create those ads.
We all know from watching all of the analysis the day after a Super Bowl that some of the ads hit the mark while others just miss the mark completely. I find this to be a really interesting dynamic because we have companies investing so heavily in this one chance to make an impression, yet they often fail to execute it successfully. Our call centers are making a similar number of impressions that are personal one-on-one interactions that can be very tailored.
In a previous post we discussed the correlations between customer experience index scores and loyalty metrics. In the same research Forrester found correlations between call-center satisfaction and loyalty metrics. The data is based on Forrester asking U.S. customers about companies with which they have done business, specifically consumers who have had a phone conversation with an agent. What they found is that call-center satisfaction correlates strongly with future purchases, the desire or willingness to purchase again. They also see high correlations between call-center satisfaction and word-of-mouth and likelihood to recommend to a friend or a family member and negative correlations between call-center satisfaction and intent to switch.
There is also a connection between customer experience and stock price. This analysis was performed by a company called Watermark Consulting, a customer experience consulting firm. They analyzed two stock portfolios. One I’ll call the customer experience leaders and these portfolios are made up of the top 10 publicly-traded companies in the customer experience index for any given year. They compared them to a portfolio that I’ll call the customer experience laggers, the bottom 10 publicly-traded companies in the Forrester customer experience index for any given year.
Let us pretend that it is 2007 (the first year that Forrester released the customer experience index) and let us say that you decided at the beginning of the year to invest $10,000 in that year’s customer experience leaders portfolio. So you took your $10K and divided it equally among those top 10 publicly-traded companies in the 2007 customer experience index. Meanwhile, your buddy down the street invested $10,000 in that year’s customer experience laggers portfolio. At the end of 2007, you both sold your holdings and then in 2008 you reinvested in that year’s customer experience leaders and lagers, respectively, and you did the same thing every year through 2012. Over this six-year period the S&P500 was up about 14.5%. Our customer experience leaders portfolio received a whopping 43% cumulative return over that period.
The customer experience laggers portfolio, on the other hand, was down 33.9%.
Hopefully all of this data gets you really excited about the power of putting customers at the center of your business and the business value of customer experience!
This article was adapted from the webinar, No More Lip Service: Customer Experience in the Age of the Customer.