If you’ve been following this blog series, hopefully you’re coming around the idea that it’s wise to consider all of your stakeholder groups – patients, physicians, clinical sites, vendors, partners, regulatory agencies, investors, even your employees – as “customers.”
In today’s post, we’ll look at the portion of Perficient Digital’s CX strategy guide that talks about the tangible value of prioritizing CX; in other words, how it impacts the bottom line. Here is an excerpt from the guide (see guide for source):
Forrester conducted a study to measure the revenue benefits of the loyalty built through good CX. They found that each 1% of improvement in CX quality – as measured by their Customer Experience Index – resulted in an additional $15 – $175 million in annual revenues. Where your company falls within that range depends on how easily your customers can switch to a competitor. The easier it is to switch to a competitor, the more impact your CX has on your loyalty and revenue. While a competitor may be able to match you on price and product, a great CX is hard to replicate.
Businesses leveraging the two technologies together would now be able to harness their data for critical insights and predictions, connect customer touchpoints across their business, and drive brand loyalty and growth.
Try to think about this not only in terms of product competition, but in terms of competition for partners, vendors, investors, clinical investigators, clinical subjects, and human resources. If you provide a top-notch experience on all of these fronts, individuals and organizations will be tripping over themselves to work with you and for you. This not only leads to increased revenue from product sales; it can result in more funding, faster drug approvals, improved employee retention and productivity, increased investigator retention, reduced contract rates from vendors, and opportunities to partner with other industry leaders.
Here is some additional data from the CX strategy guide about the impact of good CX on company performance (again, see guide for sources):
The 2016 Econsultancy survey of digital marketing trends reveals CX as the single most exciting opportunity, ahead of content marketing, mobile, personalization, and social. Walker Information reports that experience is a bigger priority than product and price, and will grow as a priority through at least 2020.
When companies prioritize CX, they generate 60% higher profits than their competitors. Retention is a key indicator of great CX, and a 10% increase in customer retention yields a 30% increase in the value of the company. A 5% increase in customer retention can increase profits by 25-125%.
CX leaders are outperforming the S&P 500 index by more than 35 points over an eight-year period; those that are lagging behind in CX underperform by almost 45 points. In addition, Gartner’s 2014 CEO Survey shows revenue growth as the most pressing strategic mandate in business today. When asked for the top priority in technology-related business capabilities to support this growth agenda, CEOs identified digital marketing, followed closely by CX.
Now that it’s clear how critical good CX is, even in life sciences, where do we go from here? The first step is to design a data-based strategy, and the second step is to properly fund it. In terms of budgeting, we recommend a 70/20/10 model for innovation, meaning:
- 70% of your spend is applied to the experiences that your customers expect right now. This means ensuring that you are delivering on the table-stakes experiences that customers simply expect from you and your competitors.
- 20% is applied to what is in the marketplace – but new to you – and what your customers will come to expect.
- 10% of your spend should focus on what is next and will become truly innovative and differentiating.
As for the strategy step, that’s much more complicated. The remainder of this blog series will be devoted to the answer. However, if you’re ready to dive in now, you can download the CX strategy guide that I keep referencing, and you can even evaluate the maturity of your organization’s current CX strategy by taking our free online assessment.