In our “Customer Experience Best Practices Study,” researchers from Miller Heiman Group explore the business case for investing in a customer experience strategy to drive revenue performance. In today’s competitive market, growth strategies based on low pricing or product innovations are not enough to create a lasting advantage. What does? Customer loyalty. Businesses that focus on improving customer loyalty enjoy higher customer retention rates and spending per customer than their peers that don’t.
Our study evaluated more than 50 service practices of what we call “Leaders” and “Laggards” to determine which factors contributed to improving customer satisfaction (CSAT). We defined “Leaders” as organizations reporting an improved CSAT, while “Laggards” reported a stagnant or declining CSAT.
Our study uncovered four key ways that Leaders differentiate themselves through their customer experience strategy.
1. Executives Walk the Talk
In both Leader and Laggard organizations, senior executives believe customer loyalty is a key to success. But the difference is in how they back up those beliefs.
- Executives in Leader organizations are 2x more willing (56%) to commit the money and resources to their customer experience initiatives than their Laggard counterparts (26%).
- Leaders outpaced Laggards by 27% in creating a cross-functional team focused on improving the customer experience.
- Two-thirds of Leader organizations reported having customer experience ownership at the executive level, compared to 45% for Laggards.
Organizations that met all three criteria reported a staggering success rate of increasing customer satisfaction of 85%.
2. Customer Experience Practices Translate Strategy Into Action
Simply knowing that an organization needs to improve its customer service experience doesn’t move the needle; neither do vague plans such as providing better service or offering an “effortless” experience. Leader organizations translate their knowledge into specific action.
Leaders with well-defined actions following customer experience best practices have a significant advantage over Laggards, with a 30% higher CSAT score.
Our study found five key practices that contributed to CSAT improvement.
- Link the investment in customer experience to business outcomes. Organizations that use hard numbers to build a business case retain the buy-in of senior executives.
- Define and communicate a vision for the desired customer experience. Instead of fixing broken customer experiences, Leaders define the experience they want to provide and create a plan for closing the gap between actual and intended customer experiences.
- Ensure the customer experience lives up to the organization’s brand promise. Leaders share their vision for customer experience with customers and other stakeholders, then hold themselves accountable for delivering it using customer experience metrics.
- Capture voice of customer (VoC) data to monitor customer experience delivery. While 50% of Leaders agreed that they collect this data, only 26% of Laggards reported collecting this data. The poor penetration of this practice indicates that organizations aren’t capturing the right data yet: they’re “data rich” but “insight poor.”
- Drive continuous improvement using VoC data. VoC data illustrates how organizations can close the gap between customer feedback and organizational action.
3. Use Journey Maps to Eliminate Organizational Silos
The study identified three customer experience practices where Leaders beat Laggards by roughly 30%:
- Create a customer journey map that links interactions with customer expectations and emotions.
- Data is available on the positive and negative elements of the customer experiences.
- Best practices are collected and shared across sales and service organizations.
The key difference between Leaders and Laggards in this regard comes down to the silos that exist between marketing, sales and customer service. Customer journey maps are an essential tool for breaking siloed communication: they diagnose problems that may arise in the customer’s path through the organization, such as when a sales team promises things that a service can’t deliver, creating problems that customer service can’t address. Optimizing the customer service experience begins well before a customer calls a customer success rep, so organizations that facilitate information sharing between departments are better able to address these roadblocks.
4. Hire and Develop the Right Talent
About half of Leaders excel throughout the talent lifecycle, from hiring, assessing performance, and implementing improvement plans to terminating poor performers. By contrast, only one in five Laggards claims to manage their people effectively.
Our study also found that Leaders follow these customer experience best practices:
- Recognize service personnel for performance.
- Develop the knowledge and skills of service personnel.
- Build teams across the service organization.
- Set standards for the service organization.
- Empower frontline employees to take action.
To reinforce these behaviors, Leaders, on average, invest $1,500 in training for each service associate each year—about 50% more than Laggards. And, while a quarter of Leaders spend $2,500 yearly per associate, a quarter of Laggards report spending less than $50 yearly per associate.
Training for service reps includes instruction designed to improve product and service expertise and to teach soft skills, such as listening with empathy, solving problems and defusing anger.
Leaders also offer their teams meaningful feedback and coaching to reinforce this training. At least 81% of managers in Leaders use an informal coaching process; 35% use a formal process aligned to a service enablement framework. Meanwhile, in more than half of Laggards (56%), training is “left up to the manager,” which sometimes means service reps get no coaching at all. And managers at Leaders are nearly twice as likely as those at Laggards to spend at least one hour per week coaching their team.
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Our Customer Experience Best Practices Study is packed with even more insights, so you can start building a customer experience strategy to differentiate your organization and build brand loyalty.