Feb 26

Feb 26 How Customer Experience Analysis Can Uncover Common Blind Spots Killing Profit Margins

A customer experience analysis helps you do one important thing: walk in your customers' shoes to understand the experience your company provides first-hand. When you know where and why customers are frustrated with their experience, it’s easier to see why they are spending less, or spending elsewhere; you can better see the connection between the poor experience and profit margin.

More importantly, the insights you uncover will help you move toward making improvements and removing friction for customers, which ultimately reduce churn, and increase profit margins. Here’s what to look for when using your customer experience analysis to uncover blind spots that are killing profit margins.

1. Is the customer experience brand-aligned?

Does the experience your brand provides reflect your brand promise and values at each touch point? Does it reflect what your target customers value?

Imagine if you walked into Neiman Marcus or Saks Fifth Avenue expecting a high-end, high-touch, luxury experience with the prices to match and instead you encountered IKEA service-levels and prices. Your expectations wouldn’t be met.

The same goes in reverse. If you go into IKEA expecting ready-to-assemble furniture, appliances, home accessories and Swedish meatballs at great prices, but instead have a high-end experience with Neiman or Saks prices to match, that's not brand aligned either. Brand mis-alignment results in promises not met and values not reflected in the experience customers are having.

This question matters just as much to a B2B business as it does in the B2C example above.

Some brands cater to companies looking for highly customizable solutions and very responsive SLAs. Other brands provide solutions that may be less customizable and more template-driven with vast self-service resources for DIY support. Both brands may provide excellent experiences for their target clients.

The experience would inevitably be perceived as poor by its target clients, if the brand I prize for its wealth of self-service resources that make it possible for me to DIY suddenly requires I call in to get support; or, vice versa if I value quick and easy access to experts, being surprised with great self-service tools in lieu of my usual support.

2. Is the customer experience easy?

What is the customer’s effort at every point of interaction? Is the effort required what they would have expected? Is it worth their time? Matt Watkinson, author, keynote speaker and CX expert, explains the importance of answering this question: "Few things generate more goodwill and repeat business than being effortless to deal with.”

You may notice yourself considering this question as a modern-day consumer. I was recently ordering logo apparel and each time I created another design and clicked “add to cart,”I was taken to a new shopping cart that was otherwise empty.

I ended up with three carts and had to place three separate purchases. The company then emailed me to say they manually combined the three orders, so I wouldn't be charged logo set-up fees for each one, since the logo was the same for all three.

This was a good catch on their side—thanks to manual employee effort—but it’s also probably added an extra step, which they likely have to take regularly, which means they’re losing money.

What's more, I had paid a premium for quicker turnaround time. That was not added to the combined order, which was not evident in the email they sent me, so they missed the guaranteed expedited delivery date and had to give me a credit not just for the premium I paid but also as part of their guarantee.

This is the perfect example of customer friction and how easy it is to lose customers to bad CX in every industry. Whether they abandon their shopping cart online because it wasn’t user friendly or make a single purchase and never shop or work with you again, this customer churn kills profit margins and cleaning this up is critical.

3. Is the experience you provide consistent?

Is the customer experience the same regardless of time of day? Regardless of channel? Regardless of who answers the phone or cashes the customer out at the register? If the experience isn't consistent, it isn't reliable. And, if it's not reliable, it can't be trusted.

customer experience analysis—jessica noble

Your customer shouldn't have to go from one channel to the next to get the right answer, like I did recently. I was interacting with a SaaS company I use for my business—two calls and four chats later, I had six different answers.

As a result, I cancelled the premium $200/month service after just two weeks. Customer experience is directly related to profit margin, and this is the perfect example of how easily customers can slip through your fingers.

When doing your customer experience analysis, look at these potential behind-the-scenes issues:

Multiple disconnected sources of data about me as the customer versus one complete source of master data (single source of the truth) with accurate view of my interactions across ALL channels with the company.
Varying policies and procedures between channels. For example, perhaps there are more lenient return policies if you call in because the service agent is empowered to make exceptions.
Inconsistent training. Some employees provide the correct experience while others don’t know how.

Even if you happen to have a corner on the market for a particular product or service that’s head-and-shoulders above the rest, if you provide an inconsistent experience, customers likely won't consider spending more money with you for additional products or services. They won't recommend your brand to others, and if a better option comes along, they’ll leave. Your corner on the market is ripe for disruption! Your plump profit margins and poor customer experience are like Sirens luring competition.

4. Is every point of interaction adding value to you (as the customer)?

Do you have unnecessary steps that don't add value to the customer? Is the experience seamless? The customer experience starts with the systems and processes you use. I love how Kendra L. Shimmell simplifies the importance of this: “Without the intentional design of backstage systems and operations, the work of navigating them is outsourced to the customer.”

To better understand where the non-value-add hiccups are, you need to experience each touch point yourself. For example, is your “Get Support” button taking the customer to an easy-to-access contact page with phone numbers, chat and email? Or are they dropped at an FAQ page, where they have to continue digging around to find someone to speak with? Or worse, taken to a page where they must select the reason for contact, none of which apply?

Exerting extra effort on non-value-add steps drives friction and friction drives churn. The non-value add steps, the ones that cause them to do more work, are likely masking backstage issues. I’ve found that, oftentimes, those behind-the-scenes issues stem from manual hand-offs that aren’t effective or happening in a timely fashion.

In most cases, the question to ask yourself is: can this be automated? Or, can this be simplified? If not, the next question is: can a digital workflow improve consistency and reduce or remove the need for customer intervention?

Keep Reading: Can Business Processes Make or Break Customer Experience?

5. Is the experience personalized?

One of the most basic steps in a customer service analysis is to ask, while walking in your customers' shoes: How many times do I need to repeat myself, verbally or online? For example, do I need to restate my name when I call in and/or after I'm transferred? Few things are more frustrating than repeating the same information, think: name, birthday, customer ID, to multiple people, especially after having already input this information with the dial pad.

This is why ID/IVR integration is so important. With the right technology, you can personalize the experience when speaking with a customer and continue to keep track of their requests, calls and details as they continue to communicate and spend money over time. Here are a few scenarios to consider:

In both B2B and B2C businesses, it’s critical to make account-based data readily available and require it for all customer service calls. If a customer is requesting a service they get routinely, you can glance at their account and ask, “I see we usually do ABC, would you like that again or something different?”

In a B2B client onboarding process, initial intake discovery information should be made available and accessed ahead of the first meeting or call. A common scenario in professional services happens after a client signs a contract with sales. The delivery team (consultants) go in and start the first discovery meeting with some version of, “Tell me about your business/your problem/goals/project,” when all of this information has already been shared.

For a B2C retailer, if someone calls in to make a return, an agent could ask, “Is this related to your most recent order last week versus do you have your order number?” Without the right technology, the customer might need to both input their order number manually and then say it again more than once.

In a B2B scenario, where the relationship is not one-to-one but many-to-many, access to a shared or complete view of the customers’ history is key for everyone interacting with the same account. There’s nothing worse than a salesperson trying to close a major deal only to have the customer vent to them about an open or escalated case with Customer Support. This is also a problem for new employees interacting with existing customers but not knowing details like whether there’s a contract in place or negotiated pricing and payment terms.

Having to repeat yourself as a customer leads to friction, and that friction leads to churn, which decreases revenue and profit margins. The longer you have a customer, the more they expect you to know about them and their preferences; technology makes this an easy thing to do.

Uncover Blind Spots With Your Customer Experience Analysis

Customer experience is an important tool to lever when looking at declining profit margins. Consider the insights you can uncover with a customer experience analysis and get intentional about stepping into your customers’ shoes to better understand their needs, boost retention and drive higher profits.