Is Customer experience too much fluff for the CFO?
Posted by Ajay Kelkar on Thu, Feb 11, 2010
Often marketers are rapidly putting together rollout plans and aggressively chasing market share and customer centricity takes a back seat. But does customer centric action impact the bottomline!Do the CEO & CFO care?
Forrester’s previous research has shown a high correlation between customer experience and three key elements of loyal behavior: willingness to buy more, reluctance to switch, and likelihood to recommend.
Here is an extract from an interesting study from Forrester:
But how does Customer experience affect a company’s bottom line? To answer that question, we looked at the percentage of loyal customers within the customer bases of more than 100 companies. It turns out that customer experience leaders have an advantage of more than 14% over customer experience laggards across all three areas of loyalty. The annual revenue gains from a modest difference in customer experience can total $311 million for a large hotel. Banks and hotels garner the largest gains from their current customers, while airlines get the most from an increase in positive word of mouth. Customer experience professionals should use this information to build customized business plans.
I believe that in growth markets such as India the opportunity to embed "customer centric" processes into the fabric of the organization is very strong. This is because entire industries are being created right from "scratch"-Retail, telecom and many others.
It needs a strong CEO who drives the customer centricity agenda himself and makes it practical for the market to absorb. The CEO then must drive a technology agenda, with the CTO, which puts together the "plumbing" for crafting a great customer experience.