The ROI of customer-obsessed companies
Updated: Mar 28
“A satisfied customer is the best business strategy of all” (Michael Lebouf, an American businessman).
Just how important customers are to the most successful companies in the world can be learned by the actions of their CEOs. Apple’s CEO Tim Cook is known to respond to up to 100 customer service emails every single day. And Amazon’s CEO Jeff Bezos goes over many customer-complaint emails daily and forwards them to his executives in charge with a question mark, demanding that they drop off everything that they are doing, research the complaint and write a well-crafted response.
Some companies may deliberate on how much money and effort they should spend on their customers. But for many of the leading world companies, customer-related return on investment is a non-issue. After all, customers are their business.
What are customer-obsessed companies?
Companies that center on putting their customers first are referred to as customer-obsessed. These organizations, such as in this list of the 25 most customer-centric companies from 2020, constantly prioritize their customers with great service, sustainability efforts, maximum digital convenience, and personalization.
Understanding that only 1 out of 26 unhappy customers complain but that the rest churn, drives customer-obsessed companies to invest in their existing customers and not take them for granted. As expert Blake Morgan writes, companies that consider the potential of the customer for the future, are much better off.
The challenges of proving the ROI of customer experiences
Business managers that ponder the costs of retaining customers fear that every dollar spent there will take away from the company’s bottom-line profits. They understand the need to increase sales, they have no problem with investing in bringing in new leads, but when it comes to the “softer” side of customer retention, they may tend to hesitate in terms of spending. Those managers, when thinking about where to cut costs, will oftentimes look for customer retention expenses first. They may deem such expenses as less important when compared with the more obvious areas of lead generation and sales.
The notion that “we already acquired those customers, therefore we don’t need to invest in them anymore” may backfire, as customers’ tastes and behavior change. Customers may feel disappointed if they notice that companies take them for granted and do not continue to offer them benefits and great service.
Then there are the company’s competitors which are always on the lookout to steal its customers. If customers see a greater value in competing businesses, they may not show loyalty to the company and choose to churn. Trying to bring them back may become more costly or even impossible after they have left the company in favor of a competitor.
When trying to balance the pros and cons of customer retention and experience, the calculations of investing in maintaining existing customers require a deeper analysis. Companies must employ long-term strategies when it comes to customer experience and invest in keeping them happy and engaged.
The benefits of ROI of customer experiences to companies
Executives making budget plans and spending considerations must realize that there is a bottom line to customer retention as well. How to prove the ROI of customer experience comes down to measurable figures such as 84% of companies investing in customer experiences saw their revenues increase as a result. In yet another research, companies that invest in their customer experiences see close to 6 times more revenues than companies with poor customer retention investments.
In order to measure their customers' lifetime value, some companies calculate the average order total multiplied by the average number of purchases in a year multiplied by average retention time in years. For building long-term customer loyalty, such calculation aims to show a bottom-line figure to the importance of keeping one’s customers happy.
Affogata at the forefront of customer-obsessed data analysis
According to Gartner's research, the collection of customer feedback can result in a 15-20% sales increase for companies. That same report also showed that companies that employed specific customer experience programs and were attentive to their customer's voices, saved 25% in customer retention vs. companies that did not go that road.
At Affogata, companies can find a multitude of customer feedback analysis insights that would help them make the most of their it:
Real-time understanding of what customers want and need: which is carried out by collecting their conversations from multiple open web and internal data points. What follows is a thorough analysis of such feedback in order to create a coherent picture with actionable insights.
Analysis of top complaints categories: companies can prioritize what to fix first after they evaluate Affogata’s analysis of what their customers are less happy about. Be it the product itself or some of its features, or their customer service performance, or even their recent marketing campaigns, whatever their clients criticize and complain about, the company will be able to quickly find out and to handle it accordingly.
Ability to not only analyze but also engage from our “all-in-one-place” platform: when companies respond to their customers directly, in whatever platform, it shows that they care about them. If a review site or a social media comment is left unanswered, be it a praise or a complaint, customers may feel that companies take them for granted. At Affogata, all mentions are gathered together and appear in a manner that enables reps of companies to respond quickly to their customers. Companies can also measure how quickly their teams have responded to comments and even analyze the sentiment that stems from such collected real-time data.
Every company’s team can be served: customers are important to different company’s teams in different ways. Product people wish to get feedback on their products’ features and designs while marketing people wish to figure out what customers are thinking about their latest campaign or on their overall brand reputation. Collecting feedback and categorizing it to each department's needs enables the company to receive a full depiction of what customers think about its efforts and can lead to better planning of future actions.