Organisations of all sizes may be missing out on the business benefits of a best practice approach to customer loyalty, according to research by Net Promoter software company Satmetrix.
The study found that 64% of SMBs (i.e. those with annual revenues of under US$150 million), rising to 70% of larger businesses (those with revenues of over US$150 million) either don't know, can't measure, or can't prove the return on investment (ROI) from their customer experience management (CEM) initiatives.
The research, based on over 1000 responses from companies of all sizes around the world, also showed that, while larger businesses see current customers as their main priority (34%), SMBs would rather focus on acquiring new customers (48%). And almost one in five (18%) of SMBs said they currently had no means of measuring loyalty.
Some 16% of SMBs said they had no CEM initiative in place, compared to only 5% of large companies. But, of those that do, 73% of SMBs and 58% of large businesses had built their own CEM systems in-house.
The study also uncovered a number of other challenges for SMBs when it comes to delivering effective CEM programmes. When asked what they considered the biggest challenge when measuring customer experience, respondents identified a range of issues including:
- 24% find it hard to close the loop with customers. This means customers that give feedback may feel ignored, which creates diminished satisfaction since the respondent effort and time was not respected (21% of large businesses).
- 14% struggle to get alignment about the right metrics to use (11% of large businesses), which may be one of the reasons why proving the ROI of CEM is so hard.
- 14% find it hard to get employees engaged in CEM initiatives (12% of large businesses) - this means that improvements that are needed to keep customers loyal may not be properly implemented. Closing the loop with every employee transforms the organisation, creates the ability to pollinate best practices and creates a bond and conversation that engages the customer.
- 7% have a lack of vision about how CEM will help the company. This doubles to 15% for large businesses - perhaps an indication of why the ROI is so hard to assess.
"This research shows that while businesses understand the strategic importance of delivering an excellent customer experience, they are struggling to make this a reality through best practice CEM initiatives," said Steve Baxter, general manager of global mid-market solutions for Satmetrix. "It's impossible to get true commitment to creating a 'customer first' culture if you can't measure the ROI or agree on a simple metric for ROI, struggle to get employees engaged and fail to close the loop with customers."