The market benefit of a customer experience (CX) programme can be measured in a variety of ways. More of these schemes, however, are focusing on cost savings as the clearest proof point for justifying their introduction. although cutting costs is significant, organisations that focus solely on this aspect may be missing the bigger picture. There’s another, bigger reason to cut prices, and it’s one that brands that want to remain competitive should pay attention to: improved customer experience (XI).
Today’s discussion isn’t just about cost cutting; it’s also about how doing so in the right way will help brands achieve both financial and consumer experience targets, drive organizational and cultural change, and build positive interactions that can help businesses rise to the top of their industries. So, without further ado, let’s look at how brands should think about cost savings in a way that improves the customer experience rather than just the bottom line.
Why Is It So Important to Reduce Friction?
As a matter of course, most brands search for ways to improve efficiencies and cut costs, but many overlook the fact that doing so can and should minimize consumer journey friction. Friction, in this sense, refers to the extra effort customers must put in at critical journey touchpoints—the moments that matter. Friction comes in several forms, whether it’s repeat calls, returning to shops, or managing obstinate aid sites. Most importantly for this debate, friction will lead to not only higher costs for brands, but also higher consumer frustration and, eventually, churn.
Let me give you an example of how minimizing friction saves money and time for customers. I discovered as a customer experience (CX) professional in the insurance industry that every second we could shave off of calls could save our tech support contact centre $100,000 (annually). On the one hand, saving so much time (and money) benefited the company’s bottom line. More importantly, if we could find “good” ways to cut call times by even a few seconds, we would improve the customer experience. Who wants to listen to disclaimers and legalese, anyway? Working to and friction saved both money and time for the customer.
All of this is why it’s important that companies use customer engagement systems to not only cut costs, but also to enhance the customer experience. Anyone who claims you can’t do both isn’t using all of the data from a well-designed customer service programme. Reducing friction is thus a win-win scenario, creating a meaningful customer experience while also positively impacting your bottom line.
Making Foundational Connections
The consumer claim journey is one of the most important cost-cutting areas for brands to consider, particularly in areas like insurance. Organizations that approach this method correctly will save money while also improving consumer relationships. Customers who have an easy, low-effort claim experience come back feeling like your company really supports their business, forming a fundamental bond between them and your brand. And they’ll tell all of their friends and relatives!
Even if your company isn’t big, you could use some automated claim processing to make things simpler for customers and keep trivial tasks out of costly contact centre channels. I’ve seen the most powerful claim–handling systems capture as much information as possible from an automated channel in as few steps as possible. customers whose claims can be auto-handled walk away knowing like all was resolved quickly, allowing the contact centre agents to focus on more important issues.
Of course, mastering this dynamic can be difficult. Customers don’t like having to listen to legalese and disclaimers, so brands must be cautious about which auto-resolution systems they employ. Rather than keeping this conversation siloed, brands should pull together all related departments to find the right balance. Although this can be a time-consuming task, it does not have to be. These journey exercises can be both enjoyable and beneficial—contrary to common opinion, these results are not mutually exclusive! A good cx team should ensure that each department meets its objectives and that the consumer benefits from a positive experience. Through this strategy, you can also build a more customer-centric community.
Making Change Proactively
It’s all well and good to find ways to cut today’s business expenses, but what about tomorrow’s? Being aware of how unprecedented change will alter your brand’s market and experience landscape—sometimes in real time—is a significant (and sometimes overlooked) component of any effective cost reduction strategy. This isn’t to say that businesses should be able to predict any shift that occurs, but being cautious from the start will save a lot of money and damage to customer relationships. This is where an emphasis on experience improvement, constant listening, and keeping an eye on market forces comes in handy.
As COVID-19 ramped up, many supermarket stores, for example, took a more constructive approach to potential cost and friction reduction. Customers were listened to, sentiments were analysed, and rapid responses to the “new standard” were all aided by these chains’ experience channels. These chains implemented policies that reduced friction and optimised cost considerations, such as curbside delivery, as a result of their proactive approach.
Cost-cutting allows you to get the most out of your experience.
To summarise, brands should always be on the lookout for productivity gains in order to reduce cost to serve and increase customer value. However, the overarching goal of this initiative should always be to improve the user experience (XI). Even if you have a lot of competition or bad market conditions, a radically enhanced experience would draw consumers back to your brand. It fosters a personal bond that extends beyond industry and benefits companies’ bottom lines. Best of all, all of this can be accomplished by thoughtfully searching for cost reductions to enhance the customer experience, rather than focusing solely on market value and cost savings.