How to improve customer experience (CX) to maximize customer lifetime value

How to improve customer experience (CX) to maximize customer lifetime value

Consumers put a lot of stock in personal feelings when it comes to choosing brands. Even if a product ticks every box, each individual experience within the process can impact the customer’s perception of a brand — for good or bad.

Whether you’re brand new to CX or looking to evolve your current strategy, this guide will provide straightforward ideas to improve customer experience and increase customer lifetime value. And because customer expectations are always changing, we’ll also offer recommendations for tools that can help future-proof your strategy.

Ready to improve your CX strategy? Here’s what to know.

Why does having good CX matter?

The way you interact with customers has a huge impact on whether they buy or not. The best customer experiences are fast, stress-free, and friendly. But offering great customer experiences isn’t only a kind gesture — it’s also a smart business strategy.

• Differentiate your business from competitors. When competitors sell similar products at similar prices, customers look at other factors to make their decision. Whose webpage is easier to navigate? Which mobile app is more user-friendly? Which one has more information about their product or service? Does one competitor offer personalized recommendations? When your product or service is similarly priced with a competitor’s, a great customer experience can be the primary differentiator that helps you stand out in the marketplace.
• Enable highly effective customer support teams. Customer service agents answer questions, respond to complaints, and help resolve customer issues. The more issues and questions there are, the longer customers must wait to get what they need. CX tools, such as self-service portals, knowledge bases, FAQ pages, and chatbot features, can ease the burden on customer support teams by giving customers a way to solve their own issues in their own time. This gives agents the bandwidth to handle more difficult issues. It also reduces the time customers must wait to get what they need. Happy customers equal happy agents — and vice versa.
• Increase revenue and customer lifetime value (CLV). Have you ever said the words, “I’m never doing business with them again”? A poor customer experience drives people away, cutting off future spending and shifting revenue to competitors. It’s well-known by now that it’s more expensive to acquire new customers than to keep existing ones — about five times more. On the other hand, a great customer experience reduces churn, builds loyalty, and opens opportunities to upsell and cross-sell. People who receive good customer experiences spend 140% more than those with negative experiences, proving that repeat buyers can generate significant income without the same upfront cost of gaining new ones.

Gain more business through customer advocacy. No one knows what the true CX is like better than previous customers. Many potential buyers will turn to sources of customer advocacy before making a purchase from a brand. They’ll look for case studies, reviews, ratings, testimonials, community forums, and social media posts to see what other people have experienced. In fact, over 75% of B2B buyers consult three or more advocacy sources before making a decision.

What does bad CX look like?

Poor customer experiences are disruptive to everyday life. They also leave people feeling as if the brand doesn’t value their time or convenience — only their wallet.

The result? Thirty-two percent of global consumers say they’d leave a brand they loved after just one bad experience. That doesn’t leave much wiggle room for error.

Some of the most common negative customer experiences include:

• Waiting for a slow-loading webpage.
• Getting too many pushy marketing emails.
• Having no way to escalate a self-service interaction to live agent support.
• Finding out one’s personal data has been shared without consent.
• Repeating the same information to different agents or through different channels to solve the same issue.
• Agents not having the context they need to address issues quickly.
• Lack of personalization throughout the experience.

Poor customer experiences like these are disruptive and time-consuming. They make people ask, “Why should I spend my money with a company who doesn’t value my time, convenience, or preferences?”

Some people might be willing to put up with bad CX if they love the product enough, or if they can’t get it anywhere else. But few companies have the luxury of assuming their product is good enough to erase the negative impacts of a poor CX.

How to improve customer experience: Six steps

If you’re looking to increase customer lifetime value (CLV) with superior CX, here are six steps for building a customer-centric strategy:

1. Get to know your customers. Understanding your customers is key to creating great customer experiences. What do they like and dislike? What frustrates them? What delights them? Gathering data and segmenting your customers into groups based on age, demographics, industry, and other details can help you build personalized experiences that cater to their individual preferences.
2. Expand your digital channels. Not all customers use the same channels to communicate. You might find that some customers prefer SMS, while others like Facebook Messenger or WhatsApp. Some may use a combination of multiple channels. You can improve customer experience by offering a range of ways to communicate so they can engage with you over their preferred platform. However, it isn’t enough to simply have multiple channels and call it a day. For a truly seamless experience, communication channels must be connected. This way, there’s a record of past conversations, making it easy for each new interaction to carry over from the last, even if they bounce between different channels.
3. Craft a well-orchestrated journey across all touchpoints. Consider the entire customer journey. How does each department impact those experiences? This is where data sharing between departments becomes essential. If you offer a self-service portal, what’s the next step in the journey if they can’t resolve their issue there? If you send personalized marketing emails, what’s the next step if they click through to the offer? Crafting a connected journey makes it easier for customers to move from awareness to conversion with minimal disruptions.
4. Gather customer feedback. Give customers the opportunity to provide real-time feedback through live chat, follow-up emails, and surveys. This will show where the gaps are in your CX strategy, along with where you’re excelling. From there, you can give them more of what they like and cut out the frustrations that are causing churn.
5. Invest in secure, easy-to-deploy technology. No matter how strong your CX strategy is, it can’t be implemented without the right tools. Ease of use, flexibility, and security are essential to a good customer experience. There are many customer experience management (CEM) tools on the market, but not all of them will have the features or scalability you need. Make sure to invest in flexible tools that are easy for team members and customers alike to navigate so the technology doesn’t become part of the problem.
6. Never stop optimizing. The job of crafting great CX is never done. As expectations change and technology advances, the bar will continue to rise — and your competitors will rise with it. As you gather data, segment customers into groups, and capture feedback, your CX strategy should naturally evolve to keep up. Continue to publish customer advocacy content that shows your strong points and perform regular CX audits to see what new pain points in the customer journey can be solved with the resources you currently have.

Strategy before software: How to choose your CX platforms

Before investing in software, it’s important to consider the full CX strategy and its technical requirements, both today and for the future. What channels do you currently use? What self-service offerings have the highest potential to influence customer satisfaction? How will you get the right customer data to everyone in your organization who needs it?

Good CX isn’t about throwing everything at the wall — it’s about strategically delivering the right experiences where and when they can have the greatest impact on satisfaction. To do that, you need flexible tools that conform to your unique strategy so you don’t become limited by your own technology down the road.

Twilio’s CX platforms are designed to provide organization-wide tools for building cohesive, connected experiences that build loyalty and increase customer lifetime value:

• Twilio Segment is a customer data platform that lets businesses build a 360-degree view of their customers by gleaning information about their experiences and interactions from across the organization. Personalize engagements and reach out with targeted messaging at just the right moment, on just the right channel.
• Twilio Flex is a customizable contact center platform that conforms to each business’s unique needs so they can reduce wait time and deliver quick resolutions to customers. It also helps build a connected journey across channels so interactions can carry over from one platform, giving agents the real-time context they need to help customers without forcing them to repeat information they’ve already given.

Looking for ways to increase customer lifetime value and boost brand loyalty? Reach out to our experts to begin optimizing your CX strategy today.