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Focus More on Current Customers Than Acquiring New Ones
Budgeting for sales and marketing is always a dicey situation. You want to spend appropriately, and in directions that result in the best returns. But you should never skimp on the attention and resources spent on current customers.
The fact is it costs five times as much to attract a new customer than to keep the ones you already have. If you’re able to boost your customer retention rate by just 5 percent, your profits can enjoy a big boost.
Managing and budgeting for customer experience (CX) is so important simply because it’s your main differentiator from your competitors. According to consultancy firm Gartner, 89 percent of businesses compete mainly on customer experience — greater than product excellence, price, or any of the many other elements of the business process.
So, how do you budget for managing customer experience? You could start by multiplying by two the amount you currently spend on acquiring new customers. Those monies could go toward assigning a certain employee primarily to assuring positive CX, investing in new software to gauge positive social interactions, employee training, or other approaches. But you do need a budget and it should be a decent one.
You also could take a look at the current array of customer experience software platforms, but most of these are oriented toward very large companies and digital interactions. Putting an effective customer experience management methodology in place at your shop may be simpler and less expensive than you think.
Understanding what’s working
First, you need to know what’s working and what isn’t, and the easiest way to do this is asking your customers for feedback. Consider sending feedback surveys to customers every time they interact with you or your employees. There also are plenty of voice of the customer software packages that can manage surveys and feedback collection for you.
Also, arrange for a phone chat or personal visit to your top customers, and discuss specifically the customer experience from their standpoint. Importantly, make the conversation about the customer, not about you. By all means ask for suggestions on how you can improve services, customer service, features, and any other area you can think of, but seeking customer feedback should focus on the customer’s most recent interaction with you company, and how their needs were fulfilled. And never, never try to sell during these conversations. Your main purpose is to connect.
Next, make sure training of customer-facing employees is a key focus. You know who your account executives or support people are. Spent part of your CX budget on coursework or outside counseling from a CX trainer to help them get better at customer interactions. Consider CX workshops at an outside location, when all employees brainstorm ways to improve the customer experience. To encourage excellent customer relations, consider tying compensation and bonuses to employee evaluations from customers.
And of course you’ll want to measure your CX efforts for their effectiveness. Besides surveys and employee ratings, you’ll can keep track of your Net Promoter Score (NPS), which gauges the proportion your company has of enthusiastic customers versus unhappy customers. You can accomplish this with surveys as well as social media measurement.
Customer satisfaction (CSAT) is another common metric for customer experience, where customers rate their experience on a survey scale, such as one to 10. And of course, take stock of customers who don’t stay your customers for very long. Make sure to understand where things went wrong. You may not get their business again, but you’ll have an indication how to improve internally.
Christopher Hosford is editor at large for Target Marketing. Former editor-in-chief of Nielsen’s Sales & Marketing Management magazine, he covers all aspects of sales, marketing, and cutting-edge marketing technologies.