In the face of business volatility and economic uncertainty, enterprise brands are likely to explore cost-cutting strategies — but they should never come at the expense of customer experience optimization.
Why? Because while markets may change, customer expectations don’t.
Cost-cutting measures — such as streamlining technology investments or focusing more on customer retention instead of customer growth — are common when organizations shift gears to align with market fluctuations.
But to achieve your business goals and support your success for the long term, you have to make sure customer experience optimization remains at the center of your cost-cutting strategy.
Find out why it’s so important — and how to get it right — below.
Make Customer Experience Optimization Part of Your Cost-Cutting Strategy
Customer Expectations Don’t Rise and Fall With Markets
While indiscriminate belt-tightening may net you short-term gains, it will come back to bite you if it comes at the cost of CX optimization.
The majority of customers now have higher standards for customer experiences when interacting with brands. Tailored, omnichannel engagement is the benchmark, with 90% of consumers saying they’ll spend more with companies that personalize customer experiences and 68% saying they expect all experiences to be personalized.
This aligns with our own research as part of the 2022 CX IQ Index. Among the characteristics consumers said were most important to customer experience, understanding customer needs and providing cross-channel consistency were among the highest rated.
On the flip side, customers aren’t shy about jumping ship if a brand doesn’t deliver. Seventy-six percent of consumers say they’ll switch to a company’s competitor due to multiple bad experiences — and 61% will do so after just one.
Unfortunately, brands are struggling to keep pace with customer expectations, resulting in a significant customer experience gap. While 61% of U.S.-based businesses believe their customers are “very satisfied” with CX, only 23% of consumers said they were “very satisfied” with brand experiences and interactions.
Smarter Spending Shouldn’t Mean Worse CX
Technology investments often come under the microscope in cost-cutting environments — and it’s easy to see why some enterprise organizations may take that approach.
After all, there are currently almost 10,000 marketing technology solutions available to brands. The average enterprise company pays for 364 software-as-a-service applications alone, but research shows that less than half of licensed employees regularly use these tools.
Outdated and unnecessary tech can lead to bloated martech stacks and capability overlap. But it’s vital to differentiate between expendable and essential tools.
The solutions that make up your CX Hub — the core of your CX stack — allow you to:
- Capture a 360-degree view of your customers
- Segment and model audiences
- Orchestrate customer journeys
- Deliver real-time experiences
In short, they’re crucial to customer experience optimization — and customer retention.
Just a 5% increase in customer retention can increase revenue by 25-95%, meaning it should be a top priority for any organization looking to weather economic turmoil.
With the right CX solutions in place, you can save money and provide better customer experiences simultaneously.
The Right Solutions Power Bottom-Line Growth and Better CX
Audience segmentation is just one example of how brands can save money while improving customer experiences. (Explore our Enterprise Guide to Audience Segmentation and our Retail Guide to Audience Segmentation.)
By using an audience segmentation solution that helps business teams self-serve audience discovery and activation, you can reduce operational costs by 80% and increase marketer efficiency by 25% — all while empowering customer-facing teams to enhance personalization.
And with the insights they glean from segmenting audiences, teams can automatically suppress existing customers and low-value prospects from paid media campaigns. This not only helps reduce acquisition costs by up to 50% while increasing return on advertising spend, it prevents current customers from receiving irrelevant brand messaging.
Meanwhile, the ability to create lookalike models based on existing customers helps brands identify audiences similar to those that have churned, giving them the insights they need to engage at-risk customers. This helps brands build customer loyalty and reduce churn by 20%.
This is only a small sampling of what’s possible with the right CX solutions, but it clearly illustrates the value of customer experience optimization when attempting to manage costs. (See how Albertsons executed a successful multi-brand loyalty strategy to elevate the shopper experience in the post-pandemic retail landscape.)
Enterprise brands must consistently work to navigate economic trends. Sometimes that means focusing on customer growth; other times it means concentrating on cost efficiency.
But the choices brands make today will have a far-reaching impact on how customers view them tomorrow. If you’re embarking on a cost-cutting strategy, make sure you have the tools and tactics you need to support customer experience optimization.
Learn More About Customer Experience Optimization
Download our guide, How to Save Money & Retain Customers With Your CX Strategy, to learn more about cutting costs and maximizing value while providing extraordinary customer experiences.