VP of Client Engagement at rSTAR Technologies.
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With a solid solution, manufacturers stand to gain much greater long-term value from improved customer experience (CX). However, the difficulty in quantifying the greater value at play is a major contributor to poor investment in CX programs. As a disclosure, my company rSTAR is one provider of customer experience solutions for manufacturers.
To drive investments in CX tools, technologies, automation and strategies, customer experience leaders must go beyond discussing how a customer-centric approach can improve satisfaction, increase loyalty and lower service cost. Today they must also demonstrate, with ample evidence, how their solution can contribute directly to a company’s worth, generate long-term value and enhance organizational revenue and bottom-line metrics.
How can leaders demonstrate the long-term value of a CX solution?
Let's break down some of the best strategies to help CX leaders demonstrate the long-term value of a solution for manufacturers. What information can CX leaders present to trigger the required investment in a solution?
1. Highlight a solution's ability to deliver positive experiences and increase referrals.
Customers talk about their experiences. Recommendations and referrals remain at the top of the list when considering high-converting lead acquisition channels. A company that delivers excellent customer experience might not need to invest billions of dollars in ads or conversion optimization to convince a prospect.
One recent Investpro report states that 90% of respondents are more likely to trust and buy from a brand that is recommended by a friend. The same report indicates that word-of-mouth impressions result in 5x more sales than paid media impressions. This is just a further indication of the degree to which customer experience can translate into to long-term value for manufacturers.
Social media has further enhanced the growing influence of customer referrals. Many customers now regularly write about their experiences on social media platforms. This is no longer a case of one-on-one referral marketing but one-to-many referral marketing, wherein the manufacturers who provide standout customer experience are now best positioned to reap the long-term benefits—while those who don’t suffer the consequences. Being the subject of negative press coverage or low reviews can have a disastrous effect on a company’s bottom line.
2. In creating more referrals, a strong CX solution should also lead to more purchases over time.
Like most customers, referral customers test the waters with minor orders. Most customers evaluate their experience with a manufacturer after this first transaction. This initial experience will determine if they will stay with that manufacturer or move on. The better the experience, the greater the trust and the higher the order value and retention rate.
Proving the ability to deliver consistent, exceptional CX every time creates a ripple effect, bringing in more referrals and higher revenues.
3. Seek out proven strategies to increase customer loyalty and increase customer advocacy.
Earning a customer’s loyalty isn’t a walk in the park. It requires more than just offering a great product and competitive pricing. Positive customer experiences help manufacturers turn customers into company loyalists and advocates. Incentives such as rebate management programs can help boost loyalty and retention.
According to Zendesk's 2022 Customer Experience Trends Report, 81% of customers will likely make another purchase after a positive customer service experience. Meanwhile, 61% of customers indicated they would switch to a competitor after one bad customer experience and 72% after two bad experiences.
Considering that customers move on when unhappy, a strong CX solution in manufacturing can help reduce the churn rate, lending a significant competitive advantage. These two variables can make all the difference to a company's bottom line in an industry ridden with a thin profit margin.
4. Illustrate how a solution can reduce the cost incurred by an inefficient customer experience.
Inefficient customer service is expensive. On the other hand, delivering excellent customer experience significantly reduces the service cost and improves your bottom line.
When a company takes the time to identify and address the root cause of a customer’s complaints, it can prevent further complaints about the same issue from other customers.
On the flip side, an unresolved complaint can result in the customer bringing the same complaint to another of the company's channels several times, putting several customer service personnel on the same issue. This impacts productivity and increases customer service costs.
An even bigger negative outcome is the cost of losing the customer entirely—or losing future prospects due to a customer’s negative review.
Companies that improve the customer journey will increase revenue while reducing cost-to-serve significantly.
5. A strong solution will leverage customer insights to improve service delivery.
Customer-centric manufacturers improve CX by transforming feedback into insights for strategic customer service delivery decision making.
According to a 2021 report from McKinsey, 71% of consumer respondents report they now expect companies to deliver personalized interactions. Meanwhile, 76% say they grow frustrated when this doesn't happen.
6. Employee retention should also benefit.
A company’s customer experience delivery is vital to its employee retention rate. Customers have a more enjoyable time interacting with companies that deliver excellent customer service. This leads to higher quality interactions with employees at different touchpoints, which can also benefit the employee experience. When customers are happy, employee stress is reduced. In contrast, a company with poor customer service can lose service agents due to the added stress.
To maintain productivity and increase the bottom line, innovative manufacturers should ensure their customer service solution provides every necessary resource needed to deliver an incredible experience.
This is how to demonstrate the long-term value of a CX solution in manufacturing.
Excellent customer experience drives both short and long-term value. Several CX solutions and technologies are available to manufacturers, with automated rebate management systems being a particularly hot topic amongst manufacturing thought leaders to increase loyalty and repeat business. I hope this article helps outline some of the best strategies by which manufacturers can feel confident in the long-term value of a strong CX solution.
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