Editor's note: Valory Myers is a former vice president at Ipsos Loyalty, a division of France-based research firm Ipsos focused on customer and employee relationship management.
Most business leaders today agree that customer experience is a critical competency for competitive advantage and business growth. “Customer relationships” consistently ranks in the top three of the most pressing challenges facing CEOs as reported by the Conference Board’s CEO Challenge. Top strategies for addressing this situation include: develop a more outward looking customer-centric culture; enhance quality of products/services; communicate corporate values to customers and key stakeholders; improve alignment and accountability of corporate business practices/management behavior with corporate values; and tailor marketing, promotion and communications campaigns to key customer needs.
All of these strategies require significant investment to implement. What barriers are preventing better execution? In many cases, barriers stem from a lack of understanding the potential ROI of customer experience initiatives. Often, CX professionals are simply not speaking the language of CFOs and CEOs when seeking funding for worthy projects.
To gain executive attention, the CX program needs to have a clear business case. Leadership needs to know specifically how customer experience improvements contribute to financial performance. There are many studies that show the relationship between improved CX and increased sales, expanded market share, superior stock market returns and operational efficiency.
How does CX increase sales? When the customers perceive that a brand provides a significantly better customer experience than their competitors, that brand is chosen by more people, more often and more easily (Figure 1).
More people: Satisfied customers become promoters or brand advocates, sharing their stories of great cu...