Back in 2013, customer experience consulting firm, Walker Information, Inc., released an in-depth study that made some pretty bold predictions about customer experience in 2020. Now as we are approaching the next decade, an updated version has been released: Customers 2020: A Progress Report. Breaking down their findings to a few shareable bullet points is near impossible, but we’d like to highlight a couple things we found most interesting. We were especially interested in those that relate to the impact of customer experience on software revenue and costs. According to the study:
- Customers will have the final say in the customer experience. This really shouldn’t surprise anyone. We’re talking about the customer experience after all. Customers are looking for a more personalized experience, and there is no wiggle room here. They expect you to thoroughly know their business and have an understanding of where it’s headed. They want you to use that knowledge to design products and services that deliver a frictionless experience. The software companies that create a transparent, open environment that accounts for their customers’ needs are the ones that will be left standing. There is no room for hesitation or indecisiveness anymore.
- Companies that do not adapt to this change will fall behind. Darwinism is alive and well, and the rule of survival of the fittest will prove to be a universal truth among software companies by 2020. Software providers need to be able to adapt to customer insights with haste. But it’s not going to just be about listening to your customers. They’re going to expect proactiveness. You will need to anticipate their needs and plan accordingly, so your customers aren’t caught in situations where their needs aren’t being addressed. Companies that can lift themselves up and see what’s coming over the horizon are going to be in a much more strategic position than their competitors.
How This Affects Revenue and Costs
According to McKinsey & Company, organizations that strive to make improvements in the customer experience are seeing:
- Revenue growth of 10-15%
- Reduction in cost of service by 10-20%
- “Higher” customer satisfaction scores, which means greater retention
These numbers are pretty mind-boggling when you think about it. Double-digit revenue growth coupled with double-digit cost savings can have a monumental impact on your company. That doesn’t even consider what greater customer retention and acquisition rates can do for you. In fact, this just reinforces things we were hearing at TRANSACT 2019.
What This Means for You
So where does one begin to transform the customer experience? How can you guide the impact of customer experience on software to fit your revenue goals? It always starts with your customers – you must get to know their business and understand what is important to them. Then, that should become important to you and your product roadmap. I can pretty much guarantee that the experience of THEIR customers, the actual end-users, is first and foremost in their minds. Hence, you will need to monitor and enhance customer experience on both levels. Here’s what that means:
- Service, service, service. (This is so important, I actually considered adding a few more “services” to the start of this paragraph!) The importance is amplified even more if you have integrated capabilities in your solution from external partners. A great example is payment acceptance. You are entrusting your customers and their end-users to a third-party processor that may not always deliver the same level of service you do. This is a big risk, and if you start to see that your customers either can’t reach anyone to solve their problem or they do not get timely resolution, you’ll want to rethink your provider relationship.
- Meet their needs. As noted above, your customers expect you to know their business and their unique needs. Meeting those needs should be incorporated in your product roadmap whenever possible. The same thing goes for your external partners. Off the shelf, one-size-fits-all doesn’t deliver the optimal customer experience. Your partner should be flexible enough to accommodate the needs of all your customers. If not, look for another partner.
- Add digital convenience to the experience. B2C companies have long understood the benefits of allowing self-service to make the customer experience more convenient, and software companies should take note. A great example is A/R automation. Automating your Accounts Receivable process and enabling a self-service digital portal will allow your customers to retrieve their own invoices, ask questions, apply credits, and even pay their bill.
- Embrace transparency. Your customers are your biggest asset. They have direct line of sight to your processes, and they can easily become frustrated when things aren’t clear. The simple act of sharing information and being open and honest about where things stand can go a long way to making your customers happier. Again, your partners should be held to that same standard. Payment processing partners, in particular, need to be transparent about rates and fees. This will avoid surprises when your customers open their payment processing invoices.
We’re in a time where service has never been more important, and the impact of customer experience on software revenue and costs can not be understated. In order to succeed, companies are going to need to be proactive, responsive and nimble. We’ve been implementing the above recommendations among others in how we approach integrating payments into our clients’ platforms, and we’d be happy to share our experiences with you.
Let’s have a chat about what you can do to offer a better experience for your customers.