Businesses Might be Missing Out on the Benefits of Customer Loyalty
Research by Satmetrix, the Net Promoter software company, found that organizations of all sizes could be missing out on the business benefits of a best-practices approach to customer loyalty. In fact, 64 percent of small and midsized companies (SMBs) with revenue less than $150 million per year, rising to 70 percent of larger businesses with revenue more than $150 million per year either do not know, cannot measure, or cannot prove the return on investment (ROI) from customer experience management (CEM) initiatives.
The research also shows that while larger businesses see current customers as their main priority (34 percent), SMBs would rather focus on acquiring new customers (48 percent). And, almost one in five (18 percent) SMBs have no means of measuring loyalty in place.
The research, based on more than 1,000 responses from companies of all sizes around the world, shows that 16 percent of SMBs have no CEM initiatives in place, compared to just 5 percent of large companies. Of those that do, 73 percent of SMBs and 58 percent of large businesses have built the CEM systems in house.
The research uncovers a number of other challenges for SMBs when it comes to delivering effective CEM programs. When asked what they considered the biggest challenge when measuring customer experience, respondents identified a range of issues including the following:
- Twenty-four percent find it hard to close the loop with customers. This means customers who give feedback might feel ignored, which creates diminished satisfaction (21 percent of large businesses).
- Fourteen percent struggle to get alignment about the right metrics to use (11 percent of large businesses).
- Fourteen percent find it hard to get employees engaged in CEM initiatives (12 percent of large businesses) meaning improvements needed to keep customers loyal might not be properly implemented. Closing the loop with every employee transforms the organization, creates the ability to pollinate best practices, and creates a bond and conversation that engages the customer.
- Seven percent have a lack of vision about how CEM will help the company. This doubles to 15 percent for large businesses.
"This research shows that while businesses understand the strategic importance of delivering an excellent customer experience, they are struggling to make this a reality through best-practice CEM initiatives," said Steve Baxter, general manager of global mid-market solutions at Satmetrix, in a statement. "It's impossible to get true commitment to creating a customer-first culture if you can't measure the ROI or agree on a simple metric for ROI, struggle to get employees engaged, and fail to close the loop with customers."
Satmetrix Debuts Social Net Promoter
Metric draws on sentiment analysis to tie customer conversations to brand customer experience strategy