Part 6 of our series on Goals for CX Management
The critical measure of success is whether a transaction occurred- did the customer make a purchase? A straightforward value of the transaction is measured by the amount of the purchase. Frequency and size of the exchange is a barometer of a business’s health, reflected in revenues, profits, stock price, and such proxies as advocacy, loyalty, word-of-mouth or word-of-mouse spread.
Unless there is an exchange, any type of product, service or customer engagement strategy will hold little value. Even when there is an exchange, companies must explore the quality of that exchange. Yes, customers buy and they may buy a lot, but it still begs the question- “Have customers bought exactly what they want?” They may say they are satisfied with their purchases because they have accepted what is offered. But, is what is offered the ‘best’ available?
The difference between what is offered and what customers ideally want is a measure of customer sacrifice. In any exchange, companies must always assess how much sacrifice their customers have made in the exchange, and to make every effort to reduce the magnitude of that sacrifice. While it is very difficult to gauge how much a customer is willing to sacrifice, we know that they will pay more if they have positive experiences. Kris (Peter Kris, “The Value of Customer Experience, Quantified”, HBR, August 1, 2014) notes that customers who have had positive experiences are willing to pay 143% more than those who have had poor experiences in transactional exchanges.
Best Practice Questions to Ask Your Organization
- Can we show the relationship between our CX strategy and financial performance?
- Do our associates know how they influence financial performance?
- Are we measuring and analyzing annual customer spend trajectories versus customer experience scores and employee engagement scores?
- Are we calculating ROI?
This post was created by Mohamed Latib, Ph.D., of CX University–a training organization tailored to provide the on-the-go professional development in the CX discipline–and formerly of Opinionmeter, a company dedicated to helping organizations conduct effective, impactful customer experience programs for over 20 years. To learn more about CX University, please click here. To learn more about Opinionmeter’s unique mix of technology and best practice guidance, please visit Opinionmeter.com.