The Power of Customer Experience (CX) in Business
Cracking the Code Behind the CX Acronym
Over the course of my career, I have witnessed the evolution of the CX acronym from a niche term to a widely recognized pillar of modern business strategy. Not long ago, people would ask me what “CX” stood for with a puzzled expression. Yet today, it’s common knowledge that CX is shorthand for Customer Experience, a concept that lies at the heart of every successful enterprise.
So, what exactly is Customer Experience? In essence, it encapsulates every single interaction, touchpoint, and engagement a customer encounters while navigating their journey with a brand or company. From the initial discovery phase to post-purchase support, CX encompasses the entirety of a customer’s relationship with a business.
Let’s delve deeper into this definition with a real-life scenario. Imagine you’re browsing online for a new set of golf clubs. You stumble upon a sleek, modern website showcasing the different clubs and accessories, complete with detailed specifications and customer reviews. The seamless navigation and user-friendly interface make your research effortless—a positive CX moment. After comparing options, you decide to make a purchase and proceed to checkout. Here, you get the option to register as a loyalty customer and get an immediate 10% off and free shipping. The payment process is streamlined and check out is fast, enhancing your experience further.
But the journey doesn’t end with this transaction. What if you encounter a bad experience with delivery? You reach out to customer support and are pleasantly surprised by how well they take care of you, provide support and offer a fast resolution—a testament to stellar post-purchase Customer Experience.
Now, imagine stepping into one of the company’s brick and mortar stores where the sales representative not only recognizes you but also understands your shopping habits, effortlessly recommending items tailored to your preferences. Your experience seamlessly transitions from online to in-store, with checkout and service exceeding expectations. Such a flawless encounter leaves you eager to return and recommend the store to friends and family.
This epitomizes the essence of CX today—an omnichannel, relevant, convenient, reliable, trusting, and flawless customer experience that achieves “brand stickiness.” One large retailer that was successful in achieving “brand stickiness” is Adidas. Its strategic focus on digital customer journeys has yielded significant benefits in its competitive industry. By prioritizing customer experience and investing in digital initiatives, such as creating personalized, data-driven experiences and addressing customer feedback for sustainability, Adidas has seen substantial growth in sales, with notable achievements like selling over 1 million pairs of shoes made from ocean waste. This strategic shift has also contributed to Adidas being perceived as an innovative digital company, leading to a steady rise in its stock value and establishing its position as a leader in the field.1
CX is The Driving Force Behind Business Survival in Today’s Consumer Jungle
In today’s dynamic landscape, where social media reigns supreme and opinions spread with lightning speed, retailers face an unforgiving environment. A single negative experience can reverberate across platforms, tarnishing a brand’s reputation and eroding customer trust. With influencers wielding significant sway and consumer expectations at an all-time high, mediocrity is simply not an option.
Forrester’s latest findings reveal a troubling trend: for the second consecutive year, the quality of Customer Experience (CX) among US brands has experienced an unprecedented decline. Despite over 80% of business leaders acknowledging the importance of enhancing CX, only a mere 6% of brands witnessed a significant improvement in 2023, a drop from the 10% reported the previous year.1
What’s driving this decline? Several factors contribute, including shifts in investment priorities, the demotion of CX initiatives, and external challenges such as supply chain disruptions, soaring costs, and workforce shortages. It’s quite disheartening to witness that even retailers who managed to weather the storm of the pandemic are now losing ground to their CX-focused counterparts.
One crucial takeaway from the research is the enduring significance of emotion in shaping CX performance. Top brands in 2023 were able to evoke an average of 29 positive emotions—such as happiness, feeling valued, and appreciated—for every negative emotion experienced by customers. In a recent case involving Spectrum, an internet provider, a customer encountered significant frustration due to miscommunication and inadequate coordination between customer support and maintenance teams. This breakdown ultimately resulted in the customer opting to cancel their subscription and migrate to a competitor’s service.2 CX emphasizes the critical importance of aligning different departments within a company, especially customer support and maintenance, to provide a seamless and positive customer experience.
Rick Parrish, Vice President and Research Director at Forrester, underscores the importance of investing in CX quality, stating, “When companies prioritize improving their CX, they unlock numerous benefits, including heightened customer loyalty, retention, and devotion.” These findings underscore the critical role that CX plays in driving business success and customer satisfaction.
In short, to thrive in this hyper-connected era, retailers must transcend conventional notions of customer experience. They must strive to evoke strong emotional responses, exceed expectations, and forge deep connections with their audience. In essence, it’s not merely about meeting standards—it’s about crafting intelligent customer experiences that seamlessly align with business processes and cater to the entirety of the customer lifecycle.
Gone are the days when satisfactory service was enough to satisfy consumers. Today, customers hunger for hyper-personalized, immersive experiences that touch them on a deeper level. Whether it’s anticipating their needs in advance, offering tailored recommendations, or seamlessly supporting them across various channels, businesses must orchestrate a symphony of interactions that etch an unforgettable impression on their customers’ minds.
The NEW Secret Sauce for the Ultimate Customer Experience
You’ve likely heard the phrase “Meet your customers where they are” countless times, perhaps with a hint of exasperation. But guess what? Despite all the talk about putting the customer first, something in that phrase is missing something.
So, what’s the missing ingredient?
Trust.
In today’s world, trust is the currency that truly matters. Consumers yearn for it in their interactions, yet it’s often in short supply. For retailers, this presents an increasingly daunting challenge. They must not only deliver exceptional experiences but also relinquish control over customer data, allowing individuals the freedom to engage with brands on their terms.
Customers are done with intrusive tracking and relentless marketing. They demand relevance and personalization—all while safeguarding their privacy and preferences. Retailers must grant customers the freedom to explore and experiment without pressure or coercion.
As a retailer, it’s imperative to be ever ready to meet customers on their terms, providing answers, options, and support whenever the customers signal readiness. This is the new frontier of customer engagement—one where trust, freedom, and respect reign supreme.
CX serves as more than just a customer-facing facade; it’s a potent tool that can revolutionize backend operations, optimizing processes such as inventory management, procurement, pricing, and beyond. The impact? It’s directly reflected in your bottom line, determining whether your business flourishes or flounders.
How Can SAP Help you Improve Customer Experience and Your Bottom Line?
In this dynamic, and let’s face it, challenging retail landscape of optimizing customer experience and backend efficiency, SAP stands out as a powerhouse solution that leverages the trifecta of data, artificial intelligence, and real-time insights to fast-track a brand’s journey to effective and adaptive marketing. This holistic platform seamlessly integrates intelligent customer experiences with actionable insights, empowering retailers to enhance productivity and, crucially, fuel revenue growth—a paramount objective in any business endeavor.
Within this dynamic landscape of customer experience (CX) solutions, there are many innovative tools designed to enhance customer interactions and loyalty. Among these solutions, SAP® stands out with its robust Customer Engagement Platform, offering a comprehensive suite of tools and capabilities designed to optimize every touchpoint along the customer journey. The CX solution allows retailers to effectively harness their capabilities to achieve substantial revenue growth and turn a transaction into a relationship one step at a time all while building trust and respecting customer’s wishes and privacy.
Through seamless integration of customers and partners across digital channels, SAP facilitates the synchronization of supply and demand planning in real-time with unparalleled precision. Its extensive suite of integrated solutions spanning CX, ERP, Finance, and Reporting, all supported by an open API approach, provides substantial value to customers seeking to optimize their technology stacks, streamline costs through consolidation, and bypass the pitfalls of expensive customizations and integrations.
Investing in CX Reaps Rewards for Retailers
Focusing on the Bigger Picture!
In the intricate tapestry of modern business, prioritizing the customer experience isn’t merely a choice; it’s a strategic imperative. While budget constraints often tempt retailers to deprioritize CX investments, evidence from major players in the industry underscores the profound impact it can have on both customer satisfaction and revenue growth.
Consider the case of Rheem Australia3, the market leader in the design and manufacturing of a wide range of water heating products; the company embraced SAP CX solutions and witnessed remarkable outcomes. By streamlining operations and enhancing efficiency in field service management, the company achieved a remarkable 41% reduction in cost to serve alongside an impressive 11% revenue uplift in just one month. Real-time reporting and insights replaced the antiquated seven-day cycle, empowering Rheem to deliver unparalleled service while optimizing resources and time.
This success story isn’t unique among those companies that prioritize CX initiatives. Across diverse sectors, companies investing in CX technologies and solutions are reaping tangible benefits. From heightened productivity and reduced costs to accelerated time-to-value and increased revenue streams, the ripple effects of prioritizing CX extend far beyond customer interactions.
So, as you chart the course for your business’s future, dare to envision the bigger picture. Recognize that CX isn’t a mere appendage but rather the lifeblood that sustains your organization’s vitality. By investing in CX, you’re not just transforming customer experiences; you’re catalyzing a holistic revolution that permeates every facet of your enterprise, driving growth, profitability, and enduring success.
In this retail reality we inhabit, the choice is clear: Embrace the power of customer experience and thrive in the landscape of tomorrow.
1 https://www.forbes.com/sites/blakemorgan/2019/09/16/10-examples-of-customer-experience-turnarounds/?sh=21313904415a
2 https://cxp.asia/2021/04/12/8-customer-experience-fails-that-companies-can-learn-from/
3 SAP and Rheem Australia Success Story | Customer Reviews and Testimonials
Stephanie Haddad
President, Customer Experience
“Customer Experience (CX) isn’t just a buzzword; it’s the heartbeat of modern business. It’s about crafting intelligent experiences that resonate deeply with customers, forging lasting connections, and driving business success.”
United States:
1160 Battery Street East, Suite 100, San Francisco, California, 94111
Canada:
One Dundas Street West, Suite 2500, Toronto, Ontario, M5G 1Z3