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Customer Experience Increases the Bottom-Line and Social Media Makes Changing the Customer Experience Easier
Posted by Natalie Petouhoff on February 14, 2010
91% of executives say customer experiences are critical or very important to their businesses, nearly 5,000 consumers prefer better customers experiences over lower prices and better customer experiences drive higher revenue and profits,—according to Forrester Research .
While the customer experience does provide bottom-line competitive advantages, most companies still struggle with implementing better experiences. An unexpected outcome of the CRM and Customer Service Social Media research was that many of the obstacles that companies face when implementing change initiatives are dissolved when the company deploys customer service social media. The result? Not only can the company transform customer service, but it can also transform the rest of the companies with solid changes that bring lasting results.
In surveying nearly 5,000 consumers, Forrester found that across many industries they prefer better experiences than lower prices:
When Forrester calculated the contribution to the bottom-line, for great customer experiences, it found that revenue could be increased substantially. In the case of a retailer, it could be nearly $70 Million:
And its not just Forrester that has found this type of result. Claes Fornell, at the Ross School of Business University of Michigan, has found that stock prices have a correlations with customer satisfaction. The American Customer Satisfaction Index (ACSI) shows:
Implementing customer service social media had an unexpected side benefit: the dissolution of many of the obstacles that have plagued the success of customer experience initiatives, i.e., lack of executive support, clear strategy, interdepartmental cooperation and budget.
Here’s how social media played the role of change agent for business process executive stakeholders wanting to improve the customer experience:
- Direct and engaged support from CxO Office
- Clear strategy and process insight from social media voice of the customer data
- Unprecedented interdepartmental collaboration and high performing teams.
You might be asking yourself, "Why did implementing social media change the dynamics of organizational behavior?" The answer lies in understanding that people don't mind change, but what they resist is being changed. When social media initiatives are brought to light in the CxO office, the CxO's are often shocked by what customers are thinking and saying about their company. The initial reaction is, "FIX THIS AND FIX IT FAST."
In particular, customer service social media is where customers tend to scream the loudest about what they are frustrated about. With millions of other customers watching, listening and engaging, all employees, from the CxO office to the line worker, get a sense that what they do has an affect on the customer experience and by observing what is being said, most people have pride in their work and don't want the net result to be a negative experience that the customer is screaming about within the social net. As a result, the resistance, the "not invented here", the politics part and the genuine concern for the customer becomes the new focus for all.
For more details, here's the report: Customer Experience Pays Off As Social Media Reduces Obstacles For Real Change
Additional research in this series on Customer Service, CRM, Social Media and Social Business! If you are wondering what the other research has been done in this area, below are some links. The first part of each listing is the link is to the Forrester Case Study or document and the second part of each title has a link to the story on my blog-- that way if you are not a Forrester client (yet ;-) ) you can see some of the results and start taking action!