CX Can Be Profitable, but….
Over the years, there have been many claims, articles, presentations and discussions about the impact of Customer Experience and profitability. Every provider out there believes in the idea that improved customer experience will yield greater profitability, and QuestionPro is no different as demonstrated here.
The impact might be measured in various ways, the magnitude of the profitability may differ within each company and there will always be exceptions that cannot be proven. Regardless I truly believe that CX is a way to be more profitable, that satisfied customers (or Promoters or Delighted Customers) will ultimately spend more of their money with that company, overall and as a share of their spend in that category. If one is unsure of this idea at this point, you should take a moment to validate this idea for your own firm.
However, while I am an operations minded individual that focuses on profit above most metrics, I still have the belief that you are focused on CX as an organization solely for profitability, then you are likely not implementing a program that maximizes profitability.
When Profit Reigns Supreme
It may seem contradictory, because I do believe that profit maximization is a great selling point within an organization to get buy-in for a large CX program. I would also state that an ongoing analysis of this profitability and the relationship to CX should exist. However, profit should not be the only determining factor in a CX program – large or small, departmental focused or enterprise-wide.
There are several reasons for this standing. The first is an increasingly common reason, Corporate Social Responsibility (CSR). According to some research, up to three-quarters of individuals are unlikely to purchase from companies that do not behave ethically based on their own standards, which can include how they treat their customers and employees. While this is not measured on the bottom line or easily computed, it is a reality that will affect a business.
The second goes hand in hand with the first, and that is the reputation of the company in the public eye – Marketing. No one forgets the stories of someone having their package thrown from a distance at the door like this one. If the true reason behind a customer experience program is just a measurement or for profitability, your organization will not embrace the customer experience culture, and it will be demonstrated. Conversely, there are also many great stories that can come from a good customer experience culture, in fact so many that a company would have a difficult time picking the best ones.
Cost Measure versus Experience
I think the last reason you cannot base it solely on profit, is that if you are measuring Customer Experience, it will cost money. Our services are not free and neither are the services of QuestionPro competitors. There is also a cost in implementing CX internally, between providing internal CX leadership, training the staff on both tools and outcome scenarios, and even the impact of those delivering the experience (yes, I’m referring to the Employee Experience aspect of Customer Experience).
If profit is the sole reason for having a customer experience, it would just get mandated. One could easily implement a policy of “zero customer complaints” – if a customer complains, then someone gets fired. However, we recognize that this is impractical.
Usually this shows itself in different – and more subtle – ways. If you are asking to reduce your CX spend or budget annually or when the program is paused due to unforeseen circumstances (which can include a pandemic or just bad press so you don’t want the scores to go down). The reality is that even in the worst of times, one should be looking to do more with customers and understanding the customer experience, not less. When an unusual situation occurs that can severely negatively affect the brand in the eyes of the customer, it would be a time to increase the impact in their eyes. Your loyal customers will appreciate that.
If you’re really just measuring customer experience for profitability, then you are really missing the point.