Sagar Rajgopal is the president and chief customer officer (CCO) of Ubiquity, a leading outsourcer for disruptive brands.
During times of economic uncertainty, organizations are pressured to cut costs. Even businesses that haven’t started feeling the pinch just yet might pull back spending to brace for any challenges that could be coming. One of the first places businesses often look to scale back is customer service investments, but customer experience can now make or break brands.
More than half (54%) of U.S. consumers have lost trust in a company or brand, and, among those, 42% stopped using a brand and started using their competitors, according to a 2022 report by Morning Consult. Nearly 40% stopped using them and claimed they’ll never use them again. Rather than just reducing headcount or relocating to lower-cost regions, businesses need to adopt a strategic approach that includes optimizing operations.
Hasty cost reductions can, and often do, backfire, which creates unintended consequences for long-term success. Gartner research found that only 43% of companies actually achieve the cost cuts they are striving for in the first year, and only 9% of companies actually create enough capacity to take on the growth and innovation that can support their long-term goals. And, even then, at what expense do such cost-cutting measures impact a business’s reputation with its customers?
The quality and efficiency of a brand’s CX have material bottom-line impacts. By prioritizing CX, an organization can drive loyalty and gain market share. Reducing costs while boosting CX operational performance is one of the best ways to improve a brand’s overall profitability.
Why CX Management Is So Hard To Get Right
Historic turnover, hiring challenges, lack of investment into high-quality CX resources, data privacy and fraud threats have created a perfect storm for tough CX management in today’s business climate. This was evident in Forrester’s 2022 Customer Experience Index rankings, where CX quality fell for 19% of brands in 2022. That’s the highest proportion of brands to drop in one year since the inception of the survey, according to the research and advisory firm.
Strategies To Optimize CX For Profitability
Optimizing CX can eliminate inefficiencies and redundancies; you can trim expenses while also driving higher customer satisfaction. In turn, customer retention can improve, which helps reduce costs associated with churn and investments in customer acquisition. It’s often said that it’s five to 25 times more expensive to acquire a new customer than it is to retain their business. Similarly, engaging and retaining existing employees, especially those who serve your customers, is also better for your bottom line and for consistently achieving a great CX.
Make self-service work for customers, not against them.
Design (or redesign) tools such as interactive voice response systems or chatbots to work for you and your customers by ensuring simple questions—such as tracking information, balance inquiries, etc.—can be resolved through self-service, while more complex questions can be quickly routed to the correct live agent. Keeping call volumes low is a good way to keep costs down, but it also requires thoughtful customer journey mapping. The alternative is simply implementing barriers to get to a human agent, which ends up creating an adverse effect by increasing customer effort.
Get and use customer and agent feedback.
Use customer scorecards and quality audits to learn more about what customers want and what needs improvement. Pay close attention to key performance indicators such as average call time, call volume and the reasons behind the data. If agents can’t solve customers’ problems, this type of analysis can help determine if it’s due to a system, access, staffing or another issue.
It’s also important to ask agents about what’s working well and what isn’t. Acting on your agents’ feedback will help not only improve the customer experience but also make agents feel valued, listened to and empowered. McKinsey & Company research shows that engaged customer service agents are more than three times as likely to feel empowered to solve customer problems.
Recognize that workforce management demands analytics and engaged employees.
A common mistake companies make is overlooking or avoiding addressing customer wait time or turnaround time to address a query or complaint, which can lead to customer frustration and dissatisfaction. The issue can then be exacerbated if customers are calling back repeatedly to resolve the same issue. By understanding and monitoring critical metrics like average wait time, abandonment rate, turnaround time, backlogs, etc., workforce management proactively solves for staffing issues to ensure customers are attended to quickly and efficiently. Monitoring and adapting to workload and intraday arrival patterns is essential to making sure the needed agents are scheduled at the right time.
At the same time, combat agent absenteeism by investing in meaningful incentives, rewards, recognition and employee engagement. In my experience, investing in employee experience and engagement can help boost productivity and agent retention, both of which have direct correlations to better customer experience.
While these strategies might seem simple enough, practical realities and poor execution can stifle even the best optimization plans. As organizations continue to face tough economic headwinds, cost reduction will continue to be a part of the discussion. While spending cuts are always challenging, considering strategic approaches to spending reductions now, including optimizing CX rather than simply cutting headcount, can pay off long-term when it comes to the overall health of your business.
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