The global commodity slump has hit Australia’s vital mining and oil sectors, and the Aussie dollar has also taken a beating in the last few months, falling more than 40 per cent since reaching a high of $1.10 against the US dollar in 2011 to around US$0.75.
In the past, it could have been expected that China would come to the rescue. But that won’t happen: The Chinese economy just grew at its slowest rate in 25 years.
Companies that obsess over these developments might be tempted to panic and cut spending on customer experience (CX) improvement programs, despite the fact that many firms are sitting on piles of cash. But cutting CX budgets is a terrible idea because CX is the greatest potential source of competitive advantage – especially in times of high market volatility. For example:
CX leaders grow revenue 3x faster than CX laggards:
Forrester recently analysed the correlation between customer experience and revenue growth for seven industries in the US between 2010 and 2014. We found that companies with superior customer experience grew revenues faster than their competitors with inferior customer experience: On average, the eight CX leaders had revenue CAGR of 15 per cent, while their eight CX laggard competitors grew at an average rate of 2.5 per cent.
Superior CX drives customer loyalty and purchase intent:
When customers have a good experience it makes them want to stay with you longer, spend more with you, and recommend you: all of which drive revenue. This relationship holds true for mass market brands like wireless service providers as well as high-end brands like luxury autos – and even banks, credit card issuers, insurers and investment firms.
Companies with superior CX can charge more for their products:
Customers are willing to pay a higher price in return for a superior customer experience. That’s what we found when we analysed data from Forrester’s Customer Experience Index to determine the relationship between the CX Index score that customers give a brand and their willingness to pay a premium for that brand. It’s especially true for customers who rate an experience as outstanding.
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Author: Digital Dealer
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