How CX Demands Are Driving New Tech Changes
Customer experience (CX) isn’t just one of the ways businesses market their products and services today, it’s the defining factor.
More and more over the last few years, we’ve seen demands for a better customer experience outpace virtually everything else, including price and quality.
87% of organizations agree traditional experiences no longer satisfy the needs and expectations of customers today.
What has driven this change to a more customer-centric approach from modern businesses, and how has it affected tech investment from SMBs?
Personalization of Customer Experiences
Without a doubt, the most significant disruptor of CX has been the adoption of new tech by businesses.
Businesses with an effective customer experience tech system, like an ERP for example, have a massive advantage over competitors simply by being able to more accurately measure customer data and determine their needs.
If you use large online retailer, you’ll be familiar with the “Recommended for You” section that gets placed front-and-center for you to see.
They’re able to do this by using an ERP to aggregate your data and provide a more personalized experience for you. This more tailored experience than traditional shopping means the customer is more likely to make repeat purchases, and of course the business will make more sales.
Loyalty programs sometimes work on the same basis, with companies segmenting their email campaigns to personalize their approach to you.
Why Does this Matter?
The reason this matters is really down to improving customer retention. Repeat purchases from loyal customers is essential to the success of any SMB.
Increasing customer retention rates by just 5% can increase profits by 25% to 95%.
Add into the mix the pandemic, and businesses have even more reason to do everything they can to keep a loyal customer base that is more reluctant to spend.
The question for SMBs then is how can they improve the customer retention? The answer is by using a more personalized approach to customers, and that means adopting new technology and new ways to more effectively provide for them the experiences they demand.
None of this has gone completely unnoticed by SMBs, many of whom recognize that improving their company’s CX will be crucial moving forward.
32% of CMOs rank customer experience as a top three priority for their business to contend with.
Recognizing it is one thing, but what have businesses been doing to address CX?
For one, the adoption of artificial intelligence to aid in data crawling and actionable insights has become a top investment priority for many businesses.
In fact, in a study by MIT Technology Review, it was found that 80% of all businesses have either deployed or planned AI solutions for the purposes of bolstering their CX capabilities.
Leaders in tech adoption have already seen success in their CX efforts—the same study found that just 10% of large enterprise firms have no plans to deploy AI tech for the purposes of improving customer experience.
Customer Experience as the Key Competitive Element
Your ability to provide a great customer experience is a key difference between retaining a customer and them taking their business elsewhere.
That’s according to 81% of companies in a survey by Dimension Data. In short, there’s a clear understanding now that improving customer experiences is vital and the way to do that is through technology that can help you better cater to customers.
Customers themselves have the biggest demands when it comes to expectations over their experiences.
Take websites—57% of customers won’t recommend a business with a poorly designed website on mobile. It’s no longer viable for a business to not have a site that’s presentable, and those who neglect their websites risk losing customers simply on that basis alone.
Businesses must also consider the effects of a customer’s negative experience—a customer will tell an average of nine people about a positive experience with a brand, but they will tell nearly double that number (16) about a negative experience.
In a time when customer retention will prove such a determinant between success and failure, it’s no surprise businesses are putting so much emphasis on improving CX through technology adoption.
The Future of Customer Experience
Customer experience and customer experience tech are not going anywhere, and recent indications suggest that there’s a growing expectation among customers as to how they should be handled by businesses. More than three-quarters of customers expect companies to have an understanding of what they want and to tailor their experience accordingly.
That’s a big demand to place on SMBs, and in order to respond they have to invest in technologies that allow them to utilize customer data in order to be able to meet their demands as effectively as possible.
This is clearly something that SMBs are recognizing in large numbers and a big part of the reason we’re seeing so much investment in new tech primarily for CX functions.
Businesses which provide a good customer experience see almost double year-over-year growth in customer retention, repeat purchases, and customer lifetime value than competitors.
Expect to see more investment in strategies that seek to improve customer retention, and expect the majority of these strategies to be focused on using CRMs and ERPs to more effectively target customers using data to offer them a superior customer experience over competitors.
At Impact Networking, we’ve been working with SMBs for over 20 years to help them implement new technology to better serve their customers. For more information, visit our Enterprise Resource Planning page and discover what a unified business management system can do for you.