The customer is always right, and in the age of social media, their feedback has a big impact on your business—good or bad. That’s why every business strategy should focus on customer ROI
The proliferation of and dependence on the internet has brought many pros and cons for businesses large and small. You can more easily connect with your client base and benefit from positive reviews, recommendations, and discussions. Yet when a customer has a negative experience, a bad review can mean that a lead will opt for a competitor after researching your brand.
A report from Forrester indicates that customer experience drives revenue growth, and customer-experience leaders outperform laggards by 24 to 26 percentage points within the cable and retail sectors.
Because customer impressions have a lot of control over your business’s performance, customer ROI is one of the most important strategic considerations. The value of your offerings to the customer needs to align with cost—otherwise, customers certainly won’t be satisfied with their experience.
Learn why the customer experience and customer ROI should be top priorities for your business:
Customer ROI: An overview
Customer ROI is what your customers get out of your products or services; the value of what they paid for compared with what they actually paid for it.
You’re likely all too familiar with assessing ROI for your business, including marketing costs and how much impact they’re making. But how often do you take a step back to assess the ROI for your customers?
Focusing on the customer experience means that you’re assessing and updating your products and practices based on what the customer wants and what will satisfy them. It’s not just about making money—any successful business owner knows how important quality is to keep the lights on. But going farther than quality is providing a unique service that a customer can’t get anywhere else, even if it’s taking one extra step to show that you care.
Asking your customers for feedback is a good first step to assessing whether or not they’re happy with your business’s offerings. Send out a survey. Or implement a feedback pop-up on your website so that consumers can interact immediately when interacting with your brand—or when they’ve just purchased something.
It’s then wise to follow up after the fact to make sure they’re still satisfied. This gives you valuable data while making your customers feel valued. When this is the case, they’re more likely to make repeat purchases and recommend you to their friends and family.
Feedback and customer ROI
When you have happy customers, it strengthens your relationships with your audience while providing you important opportunities to improve aspects of the business. Satisfied customers may leave positive reviews and start good discussions about your business online, which will impact referral and recommendation rates.
In Nielsen’s Global Trust in Advertising Report, 83 percent of respondents said they trust recommendations from friends and family. One happy customer could lead to a domino effect and win you a lot more business.
In the same report, 66 percent of respondents said they trust consumer opinions that are posted online. While that’s great news for your business when you get a stellar review, it also means that negative reviews can have a major impact.
So where does customer ROI come into play? The fact is, your customers will only be satisfied if they feel that they’ve made a valuable purchase. If they feel like they paid too much for a product or service that didn’t meet their needs, they’re likely to talk about it. But if they felt they paid a reasonable price for outstanding service, then they’ll feel satisfied with their investment: the ideal customer ROI.
Customer experience and business performance
Focusing on the customer experience is directly related to performance. According to the State of CX Management report from Temkin Group, 73 percent of companies that have above-average customer experience maturity show better financial performance than their competitors.
Another report from Temkin Group showed that if customers have a “very good” experience, they’re 3.5 times more likely to make additional purchases than if they have a “very poor” experience. They’re also 5 times more likely to recommend a business if they have a very good experience.
If customers aren’t satisfied with their ROI, they’ll simply stop spending with the same brand or product. Qualtrics report entitled “What Happens After a Good or Bad Experience” showed that 22 percent of customers decrease their spending and 19 percent stop doing business with the company they had a bad experience with.
Not only do you have to worry about a blow to your reputation after bad feedback is posted and shared, but you also have to worry about the negative effects on your business performance. As a small or medium-sized business owner, you just can’t afford to ignore how important customer ROI is to your business strategy.
The team at Provident CPA & Business Advisors is here to help you with growth and profit improvement. We help entrepreneurs achieve financial freedom by putting together the business’s building blocks along the way. Contact us today to learn more about our services.