According to the Dubai-based CX Expert, Raluca Berchiu, customer experience shouldn’t be considered a luxury, Even more, CX is a game-changer that optimizes revenues and profits, becoming it a priority for companies’ investments during tough times.
When a company doesn't measure its CX and marketing tactics, this company can not be aware of the impact that these factors have on its revenue and even its ROI. Then is tempted to reduce CX spending, prioritizing short-term savings. Committing a huge mistake regarding benefits.
CX is a game-changer that optimizes revenues and profits
As mentioned, this is a mistake, a bad analysis with a wrong conclusion. If we make a proper approach from a marketing view, CX improvements will deliver and get in most cases not only the customers’ preference but higher rates of interactions, conversions, and sales. Brands that offer a better experience get to perform both better Cost per leads (CXL) and better Cost per Conversion (CXC) than brands that implement similar publicity strategies with lower CX performance. Therefore, CX is directly related to brand marketing returns which is very relevant for business growth. According to Harvard Business School, just a 5% increase in customer retention can grow profit by as much as 75%. Following this, it’s also important to note that it is 6 to 7 times more expensive to acquire a new customer than to retain a current one.
Imagine that you are a brand with a 10% of conversion rate over your marketing spent. You will be able to increase your sales by increasing your spending whenever you keep the same rate of performance, but, what would happen if instead of increasing your spending you get to increase your conversion rate thanks to a better experience?.. You would be able to increase your returns significantly without increasing your marketing budget spent, then you will increase your ROAS.
Brands that offer a better experience get to perform both, better Cost per leads (CXL) and better Cost per Conversion (CXC)
Many times, companies don't need to be neither more aggressive or original in their marketing strategies, they just need to be better at converting the traffic they manage to direct to their brand experience funnel, and in several cases, this could be reached just improving the CX, which may be cheaper immediately, or at least being cheaper than increasing marketing spent for each period when not increasing the conversion rate.
But CX is not only important regarding marketing results, it is also relevant to operational efficiencies. CX is related to the way we present, bring access, service, and deliver a solution/benefit to our customers and clients, then CX affects or improves both our clients’ satisfaction and our operational cost (ROI). Then if costs have to be cut, cutting off CX budget is a recipe for disaster.
Cutting off CX budget is a recipe for disaster
As customers are affected by the economic recession, they become more price-sensitive and more selective with their purchase decision, then becoming less competitive regarding your products or experiences will affect your benefits more significantly than what your organization can save cutting off CX budgets.
At Crear Digital we work with strategies that go beyond product/projects development, we work toward business KPI performance. Let's talk about your brands and business models, and let´s design CX strategies that lower your conversion cost and increase your business revenues and benefits.