What Is Customer Experience Transformation?

July 13, 2023
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What is CX transformation... and what is holding it back?

Customer experience (CX) has been a growing priority for brands for some time. 

Big names like Amazon have pushed CX forward with game-changing features – from personalized recommendations to same-day deliveries. 

While industry disruptors from Uber to JustEat have shaken up their respective verticals with CX, that is an order of magnitude better than what was seen before.

In the last few years, with the onset of the Coronavirus pandemic in 2020/2021 and the mass adoption of digital services, customer experience has become near-universally considered the primary way for brands to differentiate themselves from the competition.

This means that if they haven’t already, most businesses are going through a period of CX transformation. They are unifying their data, gathering insight from customer feedback, and using AI/machine learning to better automate the processing of all of this at scale.

But as with any kind of business transformation, there are barriers. 

It takes staff and investment to fundamentally change the culture of an organization. And to ensure there is sufficient buy-in from business leaders, the onus can be on those who care about CX to make a case for why it is so valuable.

Why is customer experience transformation important?

It reduces the likelihood of customer churn

When we talk about churn, we are really talking about losing customers over time. 

Many businesses accept that some churn is inevitable. But it is best practice to try and reduce churn rates – and to try and stop what we call “avoidable churn.”

What does this have to do with CX? 

Poor CX is one of the most cited reasons customers take their business elsewhere. 88% of customers say they will switch to a competitor after three or fewer bad experiences. In the US, avoidable churn costs companies around $136 billion annually.

Transforming your CX is a concrete step toward reducing customer churn. 

Having a comprehensive understanding of your customers that blends analytics data with actual customer interactions can help identify why they have stopped buying from you or switched to a competitor. 

It’s then possible to make the necessary changes so others won’t follow suit and to potentially retarget those churned customers to try and win them back.

With sufficient real-time data and agile customer service staff, spotting pain points as they are happening and intervening before churn occurs is possible.

It builds customer loyalty

While reducing churn is essential, businesses transforming their CX are also better positioned to nurture customer loyalty.

Customers today are less loyal than they ever have been. 92% of shoppers admit that they have no brand loyalty at all. Customer expectations have changed. So it’s understandable why brands are doubling down on trying to figure out what can keep their customers returning. 

Coronavirus has had a big part to play here. In our recent roundtable, Winning Customer Loyalty in a Disloyal World, the CX leaders behind Boots, Gorillaz, Ocado, and Udemy agreed that it is now much easier for consumers to compare prices elsewhere and to access new retailers. 

Today, customers are more used to buying a more extensive range of products online and seeing a broader range of deals. 

But those who bought from you beforehand provide the most significant opportunity. After all, there’s a 60% to 70% chance of selling to an existing customer, compared to a 5% to 20% chance of selling to a new one.

Again, unified data and customer feedback are crucial to know what your customers think and feel. What do they love about your products? What drives customer satisfaction? What is it about the experience you provide that might make for repeat purchases and more frequent visits going forward?

Only a proper customer-centric brand can really understand this.

It can turn your customers into evangelists for your brand

To really beat the competition, leaders in CX are also striving to make more of their customers advocates for their products and services.

We know that customer acquisition is expensive today. So it makes sense to try and leverage positive sentiment among your existing customers to get that extra promotional boost.

To do this, brands need to provide CX that is an order of magnitude better than what customers are used to. Equipping your business with the necessary tools and strategies to gather insight into what makes your customers super enthusiastic is critical here. 

Successful shoe brand Zappos calls it “delivering WOW through service.” 

You need to understand what makes your customers say, ‘WOW!’

Net-promoter scores (NPS) are a great way to gather insight into what proportion of your customer base will promote your brand. 

But organizations genuinely proactive with their CX transformation will analyze their NPS alongside other customer feedback sources and build that into their future strategies. 

This makes for continuous improvement and evangelical customers down the line.

The business benefits of customer experience transformation

To reduce churn, nurture loyalty, and turn customers into evangelists for your brand, you need to understand them.

By marrying up data with customer feedback from as many sources as possible, you can attain this comprehensive, holistic view of your customers. 

Here at Chattermill, we call this the single source of customer truth.

This unified data is a crucial benefit of CX transformation. It brings insights into one source of truth that is easier for your team and others within your business to digest.

Artificial intelligence, machine learning, and automation also help to streamline your organization – meaning you can process all of this data at scale. 

Staff no longer have to spend hours manually poring over trends and tagging data. And they can be better supported to act on this insight as promptly as possible.

Best Practice: How to enable effective customer experience transformation

Listen to the customer

Consumers are talking about brands in many places. 

Those leading the CX charge are analyzing existing sentiment across reviews and social media and providing their customers with the opportunity to provide feedback throughout the customer journey.

This is crucial. To get that comprehensive understanding of the voice of the customer, you need to be able to hear from them across the various channels they use and at all stages of the purchase funnel. 

For instance, if customers have an issue with delivery, they are more likely to remember to send feedback on this soon after receiving their product rather than several weeks later. 

Similarly, feedback gathered a month or so after purchase is more likely to provide insight into how satisfied the user is with the product itself.

Implement the right tools and technology

Tools such as Chattermill bring your data and feedback into one place. 

We call this Unified Customer Intelligence. This is the first step to ensuring that your whole organization can access a single source of customer truth.

Our tools also use AI/machine learning to glean actionable insights from qualitative (text) feedback across almost every channel your customers interact with you. 

This makes it possible to process all of this data at scale – saving your business valuable time and freeing up your staff to gather insight and act upon your findings.

Process, prioritize and strategize

What is the sentiment about your brand on Facebook? Is there a product feature that is frequently mentioned in support tickets? Or perhaps something in your feedback sheds light on why customers are dropping out at peak times?

Once you have the answers to these questions, you can decide what issues must be resolved. 

You can strategize on what order things need to be acted upon and who within the organization is best placed to take this action.

Communicate to those who can take action

Data and insight are helpful, but it doesn’t have much value if it isn’t used to make positive change. 

Communicating your findings with the rest of the business is arguably essential to transforming your CX. It can even change your whole business culture.

What other teams within your business are best placed to take the necessary action? 

From tweaking marketing materials, redesigning a product, or asking web developers to change your site, you need to share relevant CX insight and explain its value to the business. 

At this stage, you must also ask whether your colleagues need support. And who is responsible for that support?

Customer Experience Transformation: It’s about tools and business culture

Here at Chattermill, we live and breathe data. But we know that customer experience is about humans – what they think and how they feel.

CX transformation, therefore, is about having the right tools and technologies in place. But those tools are only there to serve you and your colleagues. 

Those who are winning at customer experience – from Zappos to Amazon, Uber to JustEat – have transformed not only the tech they have in place for analyzing data and feedback but also their business culture. 

For us, the single source of customer truth – is vital for minimizing churn, building loyalty, and making customers advocates for your brand. 

But we also know Unified Customer Intelligence is more than just unifying data. It’s about unifying your business – ensuring leadership and staff are singing from the same hymn sheet when it comes to understanding the value of CX. 

Ready to get started with your Customer Experience Transformation journey?

Book a demo to find out more about Unified Customer Intelligence 

See Chattermill in action

Understand the voice of your customers in realtime with Customer Feedback Analytics from Chattermill.