The global commodity slump has hit Australia’s vital mining and oil sectors, and the Aussie dollar has also taken a beating in the last few months, falling more than 40 per cent since reaching a high of $1.10 against the US dollar in 2011 to around US$0.75.
In the past, it could have been expected that China would come to the rescue. But that won’t happen: The Chinese economy just grew at its slowest rate in 25 years.
Companies that obsess over these developments might be tempted to panic and cut spending on customer experience (CX) improvement programs, despite the fact that many firms are sitting on piles of cash. But cutting CX budgets is a terrible idea because CX is the greatest potential source of competitive advantage – especially in times of high market volatility. For example:
CX leaders grow revenue 3x faster than CX laggards:
Forrester recently analysed the correlation between customer experience and revenue growth for seven industries in the US between 2010 and 2014. We found that companies with superior customer experience grew revenues faster than their competitors with inferior customer experience: On average, the eight CX leaders had revenue CAGR of 15 per cent, while their eight CX laggard competitors grew at an average rate of 2.5 per cent.
Superior CX drives customer loyalty and purchase intent:
When customers have a good experience it makes them want to stay with you longer, spend more with you, and recommend you: all of which drive revenue. This relationship holds true for mass market brands like wireless service providers as well as high-end brands like luxury autos – and even banks, credit card issuers, insurers and investment firms.
Companies with superior CX can charge more for their products:
Customers are willing to pay a higher price in return for a superior customer experience. That’s what we found when we analysed data from Forrester’s Customer Experience Index to determine the relationship between the CX Index score that customers give a brand and their willingness to pay a premium for that brand. It’s especially true for customers who rate an experience as outstanding.
That’s just the upside.
The downside risk of not funding CX improvements is also high: Your competitors that improve their customer experience while you stagnate will steal your customers and erode your margins. You’ll make it even easier for them if your employees become disengaged as a result of your CX flip-flop and start delivering a less satisfying experience.
Despite these harsh realities, it’s tough to stay focused when the world around you seems on the verge of panic. Here’s how businesses should stay grounded:
As 2016 progresses, you can’t count on the markets settling down. CX investments will allow you to connect your customers’ excellent experiences to revenue, profitability, customer loyalty, cost reduction, and pricing power.
As our customers exhibit growing desire to be recognised for their preferences and passion points, ...
In the third and final episode of our 3-part CMO50 video series exploring modern marketing and why it’s become a matter of trust, we’re delighted to be joined by Telstra’s former CMO and now digital services and sales executive, Jeremy Nicholas, and Adobe VP Marketing Asia-Pacific and Japan, Duncan Egan.
Flash back to the classic film, Willy Wonka and the Chocolate Factory. Television-obsessed Mike insists on becoming the first person to be ‘sent by Wonkavision’, dematerialising on one end, pixel by pixel, and materialising in another space. His cinematic dreams are realised thanks to rash decisions as he is shrunken down to fit the digital universe, followed by a trip to the taffy puller to return to normal size.
Why is it there is no shortage of leadership development materials, yet outstanding leadership is so rare? Despite having access to so many leadership principles, tools, systems and processes, why is it so hard to develop and improve as a leader?
As a nation united by sport, brands are beginning to learn money alone won’t talk without aligned values and action. If recent events with major leagues and their players have shown us anything, it’s the next generation of athletes are standing by what they believe in – and they won’t let their values be superseded by money.
