Customer experience transformation, a practitioners point of view
What is customer experience (CX)?
Customer Experience refers to the overall perception that a customer or a company has of brand or a business based on their interactions and experiences throughout their entire customer lifecycle.
It encompasses every touch-point, starting from the first interaction to becoming and staying a loyal customer.
Imagine the end to end journey which involves building awareness about the product, educating about it’s benefits and making a sale to acquire a customer. Once a customer has been acquired, keeping the customer happy and ensuring the products meets or exceeds the perceived value is challenging in itself. Hence having a great on-boarding experience, followed by stellar customer service and support leads to customer success and delight driving loyalty.
Why is CX important for businesses?
CX–led growth strategies boost engagement, satisfaction and retention. A recent McKinsey study concluded CX leaders beat laggards in Revenue growth by 2X.
Following are some additional benefits
15–25% increase in cross-selling
5–10% higher wallet share
20–30% higher satisfaction and engagement
Generative AI (GenAI) is a CX enabler
McKinsey estimates GenAI to drive $2.6 trillion to $4 trillion productivity gain and the top two categories driving this growth are 1/Customer operations and 2/Marketing & Sales — essentially key CX functions leading the charge.
What are some high value interventions across the CX journey map?
CX leaders focused on improving the end-to-end customer journey can think through a set of high value interventions to drive step change. The goal is not to boil the ocean, but focus on a few to get the flywheel started, deploy, test and refine interventions and gradually rotate the flywheel over a period of time.
Let’s dive into a few use cases.
- Customer Lifetime Value (CLTV) Analysis
Definition: Customer Lifetime Value analysis is a metric that estimates the total revenue a business can expect from a single customer account throughout the business relationship. The calculation considers a customer’s revenue value and contrasts that with the company’s predicted customer lifespan. Companies use CLTV analysis to identify high-value customer segments and allocate marketing resources more efficiently.
Business Value: Understanding CLTV helps businesses:
- Allocate marketing spend more effectively by focusing on high-value customers.
- Forecast revenue and growth more accurately.
- Customize services and product offerings to retain valuable customers.
- Prioritize customer service and support efforts to enhance retention rates.
2. Install Base Analysis and Personalization
Install base analysis involves examining the products or services a customer has already purchased from a company. This analysis enables personalized marketing and support by understanding the customer’s current needs, usage patterns, and potential future requirements.
Business Value: By conducting install base analysis and implementing personalization strategies, businesses can:
- Increase cross-sell and up-sell opportunities by recommending relevant products or services.
- Enhance customer satisfaction through tailored experiences.
- Improve customer retention by demonstrating value and understanding of customer needs.
- Drive revenue growth by targeting customers with high potential for additional purchases.
3. AI-Supported Automated Issue Resolution
AI-supported automated issue resolution uses artificial intelligence technologies, such as machine learning and natural language processing, to identify, diagnose, and solve customer issues automatically without human intervention.
Business Value: Implementing AI for automated issue resolution provides several benefits, including:
- Reducing support costs by minimizing the need for human agents.
- Enhancing customer satisfaction through quick and efficient problem-solving.
- Improving response times to support requests, available 24/7.
- Learning from interactions to improve future resolutions and customer service processes.
4. Omni-Channel Multi-Language Support
Omni-channel multi-language support ensures that customers receive consistent and comprehensive support across various channels (e.g., email, chat, social media) and in multiple languages. This approach meets customers on their preferred platforms and in their native language, enhancing the overall experience.
Business Value: The key advantages include:
- Expanding market reach by accommodating a diverse customer base.
- Improving customer satisfaction and engagement by communicating in their preferred language and channels.
- Increasing customer loyalty by providing convenient and accessible support options.
- Enhancing brand reputation as customer-centric and globally inclusive.
5. Self-Help Gen AI-Powered Bots
Self-help AI-powered bots are intelligent systems designed to provide automated assistance to customers. They can understand and respond to customer queries in real-time, guiding users through troubleshooting steps, providing information, or directing them to the appropriate resources without human intervention.
Business Value: AI-powered self-help solutions offer:
- Lowered support costs by reducing the volume of queries that require human assistance.
- Improved customer satisfaction by offering instant, 24/7 support.
- Enhanced scalability of customer service operations to handle peak volumes without additional staff.
- Personalized support experiences by learning from interactions to provide tailored advice and solutions.
Hope this provides a mental model to think through your CX transformation initiatives, and how to structure the program.
In the next post we will discuss how cloud can enable some of these use cases and accelerate return on investments.
