Financial Impact of Exceptional CX
Investors can be unforgiving. They have high expectations for returns on investment (ROI) and rightly so. They expect – and deserve – a healthy return. When they don’t, it can be curtains for the CEO.
And so, “show me the money,” that iconic line from the movie “Jerry Maguire,” really nails it. Show me great ROI, and I’ll continue to invest in your company. It couldn’t be simpler. Right?
However, calculating ROI isn’t straightforward. Different CEOs and CFOs have varied approaches to measuring it. The road to achieving it is diverse, with no one-size-fits-all strategy.
Consider how businesses like Tesla and Amazon, had initial losses of billions for years before turning a profit. Both companies were granted generous market valuations by the investors, and the parties’ insight into future profitability was evident.
Meanwhile, Macy’s, the storied clothing retailer of the US market, is rethinking its approach to the brick-and-mortar vs. digital landscape, just at the end of last year as consumer spending has drastically changed. With declines in its in-store sales, it’s now catching up with the market’s new preferences, prioritizing leaner architectures and more automation practices.
Whether we choose to invest in potential, or adapt once it becomes clear that we have to, the cost of transition is unavoidable. Customer loyalty, on the other hand, tends to favor the innovators.
Follow The CX Dream: It’s Paved With Gold
Excellent CX is the North Star. Companies that create a loyal customer base have gained more than a toehold in the market. They’ve gone beyond increased revenue, profit, and brand awareness. They have their own momentum and they just don’t follow trends, they’re a part of making trends.
Consider Apple’s success with the iPhone, the iPad, music streaming, the original Macintosh with its graphical user interface, which spawned desktop publishing. Apple promised, and Apple delivered amazing customer experiences. For the investors, it has been a good ride and Apple today has a $2.87 trillion valuation.
So, how do you create and maintain excellent CX? These days, for CEOs and CFOs, following the CX dream presents stark choices.
CX and the Cloud – Not If, But When
The crucial role of CX is hardly in dispute. For modern, agile companies, loyalty can’t be underestimated, and you’ll find it on the bottom line where it’s spun into gold.
As Forbes magazine points out, great CX has a procession of benefits.
- Strengthens brand loyalty, encouraging repeat purchases.
- Boosts and spreads brand reputation, thanks to positive social media reviews.
- Increases customer retention, reducing new customer acquisition costs.
- Encourages customers to buy more and pay a premium for better experiences
- Empowers and fulfills purpose in the organization
According to PWC, 73% of consumers consider their experience with a company a key factor in their purchase decisions, as reported by PwC. Consumers demand not just quality service and fair pricing, but personalized and connected experiences across digital channels.
The Journey to Better CX Is Paved With The Cloud
Key trends in the CX landscape, including the omnichannel experience and Communications Platform as a Service (CPaaS), are shaping the future. As a CX Today article points out,new messaging apps, social media platforms, and even GenAI-powered search have expanded sophisticated touch points throughout the customer journey.
An omnichannel approach, supported by CPaaS solutions, offers convenience and seamless record access, enhancing both agent performance and customer service. And, when it comes to remaining agile, CPaaS provides a foundation for future demands.
Analytics and AI allow for real-time learning from engagements and aid in tailoring training programs, which traditional methods of supervision can’t achieve due to capacity constraints.
Justifying Capital Expenditures on Cloud Technologies
Whether you’re a market leader or only catching up, continual investment in technology is essential. It’s not a small feat, when simultaneously controlling operating costs while making (what you hope are) prudent capital investments.
Calculating the ROI of complex investments like cloud technologies and omnichannel platforms can be nuanced and intricate. In complex business scenarios such as global enterprises, calculating net profit and investment costs on cloud platforms can involve many elements.
For instance:
- Understanding Net Profit in Tech Investments
For cloud technology investments, net profit isn’t just about direct financial gains. It includes savings from process efficiencies, productivity improvements, enhanced customer satisfaction, and potentially increased sales or market share. These factors can be hard to quantify but are crucial for a comprehensive ROI analysis.
- Unpacking Investment Costs
Beyond the initial purchase or cloud subscription cost, investment costs can include implementation expenses, training costs for staff, ongoing maintenance, and even the cost of changing business processes.
- Considering Timeframes in ROI
ROI is often considered over time. An investment might have upfront costs that seem high, but if it leads to significant long-term savings or revenue growth, its ROI improves over time.
For a deep dive into calculating the ROI of customer experience initiatives, we recommend a Gartner report that examines financial services operations.
Let’s Do Omnichannel
An Adobe study on omnichannel strategies indicates that companies with robust omnichannel customer engagement typically produce ten percent year-over-year growth and a 25 percent increase in close rates. Indeed, an omnichannel customer experience enables better data flow, channel shift, and contact handling as agents enjoy more customer context.
An Adobe study shows that companies with robust omnichannel customer engagement report a 10% annual growth and a 25% increase in close rates. Indeed, this strategy enables better data flow, channel shift and contact handling as agents enjoy more customer context.
Small steps lead to big gains, tweak and tune as you grow. It’s a complex blend of technologies, market forces, and keeping a contact center team motivated and inspired. Excellent CX is continuous work in progress that pays off.
