Expenses on Customer Experience enhancement – Is it a cost or an Investment?

When a manufacturing organization looks at developing a product and further for enhancements of its features and functionalities – all expenses incurred for the same are viewed as investments and there is never a confusion around the same. Whether it is for R&D, competitive benchmarking studies, testing labs, etc. Indeed the ‘experience’ while using the ‘product’ serves as the competitive differentiator. So, anything spent in this regard that will help raise the ‘experience’ of product usage is clearly an investment – and there is no confusion around the same.

The dilemma arise afterwards.

Should a customer need any advise/guidance/help after they have bought the product – is the expense of providing the same a ‘cost’ or an ‘investment’ to deliver a good post-sales experience? If seen as a ‘cost’ the focus shifts on cost curtailment by various means – limiting access points, shifting the responsibility to trade, creating digital self-help channels that do not serve the needs of customers well, under-resourcing manpower, etc. Viewing the same expense from an ‘investment lens’ leads to ensuring multiple support channels are made accessible to customers to get prompt response for information and services. Self-help capabilities are created for customers to avail, if they choose to do so. Also, the services so provided are measured and monitored regularly so as to ensure the ‘support experience’ is best in class.

Since Customer Experience is a sum total of all touchpoint experiences – any expense incurred to enhance or improve the touchpoint experience should therefore always be treated as an ‘investment’ and never a ‘cost’.

R&D expense is incurred to improve a ‘product experience’ and the ROI of the expenses comes from better ‘competitive rankings’ and better sales. Similarly, expenses incurred to improve any touchpoint experience gets its ROI from higher recommendation scores, repeat purchases, and stronger brand loyalty (buying other products of the brand).

While it is true that expenses incurred in enhancing customer experience are always an ‘investment’ and never a ‘cost’, however CX Leaders have to see how this investment can be made more efficient.

1. Investments made for improving/enhancing each touchpoint experience should be done only after properly understanding customer expectations of different customer segments. Here the ‘Customer Segmentation’/’VOC’ programs of organizations are extremely important to be in place. Rightly designed and deployed CX program will ensure expenses incurred are well aligned with meeting targeted customer segment expectations.

2. Customer needs for support should be categorized into avoidable/unavoidable reasons and their agent support needs as desirable/undesirable.

  • Avoidable – Reasons for seeking support that shouldn’t have arisen at the first instance e.g., if customer education was done right during purchase/installation stage or due to a process, communication gap from the company. Expenses incurred around these are ‘costs’ so necessary process corrections or more robust customer education methodologies (e.g., video-based) should be deployed here to bring down the calls and thereby costs.
  • Unavoidable – Genuine support needs of customers during usage of the product/service that have to be provided for by the organization. Expenses incurred for delivering memorable experience to meet this expectation of customers whether for manpower, technology, process improvement, training, audit, etc to uplift the experience are all investments.

Similarly, it is seen that often ‘agent support’ for customers is usually seen as a ‘cost’ that has to be reduced anyhow – leading to a situation where the organization designs the support center in a manner that tries to get the customer to go through complicated automated response systems and making access to agent difficult. Chatbots are deployed with poor experience for customers when they are best served by an agent. Customers often have to wait for a long duration (often for 15-30 minutes) before they are able to reach an agent.

It is recommended to do a segregation of customer calling reasons to have clarity on where expenses are ‘investment’ and where it is a ‘cost’.

  • Desirable calls: Where customers want to speak to an agent for making purchase decisions or addressing urgent needs in emergency situations are desirable calls. Expenses here are investments and it should be done to make this a seamless, memorable experience for callers. An apt example for this will be an airplane passenger needing a change in date for his flight or take additional services. These services provide additional revenue to airlines and a customer expects a quick connect to complete his requirement. Today it is a frustrating experience to even reach an agent in many cases.
  • Undesirable calls: Customer calls that come for support where efficient self-help options are there or where the information is available in the public domain, etc. Expenses incurred for attending to these kinds of calls are ‘costs’ so every action/strategy should be deployed to reduce these undesirable calls or have them attended by chatbots/diverted to self-help channels.

The clarity in expenses for investment in building Customer Experience at different touchpoints for unavoidable/desirable calling reasons and reducing/eliminating cost at avoidable/undesirable points will help unlock huge potential and reduce the dilemma that organizations face. CX Leaders have to help in unraveling this with analysis/data and customer insights.

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