Top CEOs say great CX drives profitability
Chief executive officers (CEOs) are the masterminds of their respective organizations. They have to connect a lot of moving parts and decide based on the big picture. When it comes to customer experience (CX), they should know the minimum investment to keep up or be ahead.
“Great customer service costs less,” said Dan Hesse, former CEO of Sprint, which has a history of being the #1 customer service company in the wireless industry according to results from the 2013 American Customer Satisfaction Index (ACSI).
Hesse added that Sprint spent less than $2 billion per year when it reached the top than it did when it was at the bottom of the rankings. Here, you’ll read about the six steps that the carrier relentlessly took toward improvement, as well as several other models from enterprises that made CX a key driver of growth.
Hesse and Sprint’s Six-Point Plan
The first step was to align compensation and rewards. Regardless of department, employees received compensation depending on churn improvements and customer care call reductions. Next, these two metrics were always first on the agenda of every Operations Team meeting. Then, the company used hard data to identify the root cause of customer dissatisfaction.
The fourth step was to hold the right team accountable for removing the pain points (identified from the root cause analysis). “The customer care organization is not usually the cause of customer dissatisfaction,” wrote Hesse in The CEO Forum Magazine in 2015, “but often, inappropriately, they’re held accountable for customer experiences they don’t control.”
The last two steps were about establishing strong leadership and simplifying Sprint’s offerings. The carrier introduced the concept of “unlimited” to make it easier for its sales associates and care reps to work with customers. Hesse also said in a roundtable discussion at the Frontiers in Service Symposium at Fordham University that during his time, they spent a little more time explaining smartphone features to customers, which eliminated future calls regarding the subject.
Automation: Self-Service and Chatbots
Self-service tools are on the rise, with both the providers and the customers recognizing its value. The market research firm Forrester reported a year ago that web self-service spiked to 76% in 2014 from 67% in 2012. Over 75% of customers preferred to use self-service and expected a self-service option.
Airlines are among their first adapters. In 2016, Cathay Pacific and Dragonair set up Self-Service Bag Drop machines at the Hong Kong International Airport. The two airlines aimed to enhance the customer experience by slashing the normal processing time by half.
Passengers who had completed the check-in process — online, at check-in counters, or at designated kiosks — could check in their baggage by themselves. The self-service included printing the baggage tag, tagging their luggage, and dispatching their luggage.
New technologies have enabled the self-service trend. In the case of the bag drop function, machines provided the service and accelerated the process. Automation tools replacing humans is a subject for another day, but it is definitely an option that businesses can no longer ignore. According to Forrester, not paying attention would entail higher customer service costs. The use of chatbots can lower a company’s cost per interaction by up to 81%. By taking care of simple issues, chatbots free up live agents to deal with more complex cases and high-value transactions.
Closing the Divide
Few organizations are succeeding in delivering great CX, at least if you ask the customers themselves. A Capgemini study showed that only 30% of consumers agreed with companies that believed they are customer-centric.
On the other hand, a majority of customers are prepared to spend more money and share more data if CX will be improved. Capgemini suggested that 81% would be willing to pay more on products and services in exchange of a better experience. About 1 in 10 (9%) would be willing to increase their spend by 50%.
Meanwhile, RichRelevance surveyed more than 3,500 shoppers in the United Kingdom. It reported the same figure of 81% regarding consumers who are happy to share more data with retailers in return of a better CX. Almost half (46%) said they would prefer to share data anonymously.
The continuing challenge is to close the divide. Former Sprint head Hesse said that focus is key. For those in charge of customer service in their organizations, it is essential to address and deliver quantified improvements. These differ per company. But as for Hesse, these focus areas were “EBITDA, average revenue per user, churn, net promoter score, and customer lifetime value.”
Vikas Agrawal is a start-up Investor and co-founder of the Infographic design agency Infobrandz.com, He is a highly influential research analyst and strategic marketing consultant. Vikas advises and plans the visual marketing campaigns of Medium to Large companies. Vikas has worked...