This article is featured on TechHQ
In 2023, we can organise almost all aspects of our lives via technology. From basics like eating, drinking and getting around to the most complex of financial arrangements, a smartphone app or website is the way we make things happen – often in mere seconds after a screen tap or click of a button.
In fact, it’s quicker to list the processes in life that we can’t use technology for. (Our straw-poll list comprises: registering births, deaths & marriages, voting in elections, and getting a passport renewed in a hurry.)
As customers and service users, our expectations for “right now” responses are created by so-called big-tech companies like Uber, Just-Eat, Go Compare, Netflix and many more, whom we assume plough billions into CX (customer experience). Since the original iPhone appeared in 2006, we as consumers might have expected our experiences to improve thanks to all that clever technology available behind the scenes.
And in some surprising areas, CX in the UK is held to be pretty good, like, believe it or not, banking.
So, why have banks made great strides in improving customer experiences?
The answer is two-sided. Firstly, governments have actively mandated banks to make it easy for customers to switch from provider to provider. So banks have to differentiate themselves from each another; without the differences, customers will drift away. Secondly, it makes better financial sense to invest in customer experience.
That’s smart thinking from decision-makers in the banking sector. New products for customers are expensive to research, develop, maintain and underwrite. In time, innovative products will help retain customers, but on a day-to-day basis, it’s improvements to customer experiences that make financial sense. CX improvements are cheaper, have a faster ROI, and more loyal customers are easier to cross- and up-sell to once new products come on stream. In times of economic restraint, getting the best out of what’s already available – contact centre agents and procedures, for example – makes perfect sense.
The same rules apply outside the financial sector, of course. In addition to new products and deals, many companies improve their operational processes to reduce costs, boost revenues, and give better value to their customers.
But there’s not always a guarantee of a direct correlation between expensive operational improvements and improvements to the bottom line. In financial terms, the ROI on large-scale change management operations might be minimal or only realised in the long term. And plotting customer loyalty against investment into operations is complex.
The Six Billion Dollar Customer Experience Question
Famously, Eurostar invested £6bn on new tracks between Dover and London that reduced the UK side of the cross-channel train journey by 40 minutes. But as advertising guru Rory Sutherland pointed out in a TED talk, a mere £1bn could have employed, in perpetuity, international supermodels who would serve Chateau Petrus to passengers on every journey. In pure CX terms, which would best increase repeat business? A journey time of four hours and ten minutes while being pampered by beautiful people (and £5bn in pocket change), or a three-and-a-half hour journey?
That particular thought experiment serves to highlight that putting money into operations doesn’t necessarily equate to improvements in CX and, therefore, into a loyal customer base. Operations can be as smooth as they can be, but the more difficult an organisation makes it for its users or customers to interact with it, the more it costs the organisation and its customers.
Improve the Entire Business Model with Customer Experience Focus
Even the mighty behemoth of the UK government is (slowly) learning the lesson that making itself easier to work with makes for good business, both for the Exchequer’s accounts and its suppliers. Responding to reports from the National Audit Office in 2018 and the CBI in 2020, the G-Cloud and Network Services systems take the pain out of submitting tenders for public sector contracts.
In this context, “pain” refers to resources spent by companies simply trying to interact properly with the government. How many companies offering fantastic value to the UK taxpayer didn’t bother to bid for tenders in the past when faced with basic problems every time they tried to interact?
That paradigm translated into the B2C sector tells us that customers want to interact with brands, but when it’s difficult, it costs them (time and frustration) and the business (lost revenues, customer churn).
And CX investment needn’t be measured in millions or billions.
Customer Experience Improvements That Get Fast ROI
An investment in CX can not only reduce those costs on both sides of the business-consumer equation but actually reduce operational costs, such as the cost to serve, according to Harvard Business Review. The company’s research states, “Delivering great experiences actually reduces the cost to serve customers from what it was previously. Unhappy customers are expensive — being, for example, more likely to return products or more likely to require support.”
Investment in customer experience sometimes comes at the bottom of a list of priorities when a company digitises, for example, or – more commonly – CX improvements are thought to come as accidental consequences of improvements to processes elsewhere in the business. But research shows that CX should be the top priority, and ROI on any investment in that area is not only quick but has positive effects all over the company.
To find out more about improving the critical interface between a business and its customers, consultation with an objective third party can unearth insights that many companies miss. Customer expectation levels are set by billion-dollar multinationals in many cases (Amazon, WhatsApp, UPS et al.), but almost every organisation can afford to invest in that crucible of CX, front-line contact facilities.
Customer experience is measured in quality, not quantity. British consumers are still of the mindset that reaching out to a contact centre is, in some way, ‘making a fuss’. We have to ask ourselves, is that because of our innate sense of politeness or because our contact centres make us feel that way? There’s clearly progress to be made, and it won’t cost £6bn.