Industry data shows that for every dollar a company spends on service for existing customers, they spend five dollars on Customer Relationship Management (CRM) systems to acquire new ones. When you consider that most business is repeat business and the importance of customer experience to a brand, you have to question the balance of this investment.
Traditional marketing and sales organizations are designed with a focus on customer acquisition and allocate their budgets accordingly – with the lion’s share of their budgets dedicated to activities that pour leads into the sales funnel. While this strategy may make sense on the surface, it ignores that the bulk of company revenue is attributed to loyal customers who drive repeat business, and who recommend the company to friends and family on social media and by word of mouth. Businesses that balance their investment between new customer acquisition and brand loyalty win big. Focusing on their brand reduces customer acquisition costs and, importantly, also lowers customer churn.
The investment divide between customer acquisition and brand experience is real.
With that in mind, businesses need to evolve beyond the acquisition mind-set by considering the totality of the brand experience in order to be more responsive to today’s customer. And, as it happens – I am not alone in that thought.
We believe Gartner’s annual analysis of the CRM software market took an interesting turn this year. In addition to reporting strong growth in technologies and applications powering great customer experiences, the big headline was Gartner’s introduction of a new category called customer experience and relationship management (CERM).
CERM is more than another industry buzzword. It signals the convergence of the CRM and customer experience markets—a dynamic driven by companies’ increasing need to get a single view of the entire customer journey from marketing and sales to service and support.
So, what does this mean for businesses?
It’s time to strike a new balance.
Businesses have to evolve their thinking, their budget, and their systems. They need to get better at playing the long game. They need insight that extends beyond optimizing stand-alone transactions, so they can effectively answer questions like “what’s the best way to engage based on customer history and preferences?”; and “what resource (either live or bot) is available now, that is most likely to produce the outcome the business needs?”; and “how can we get them to progress to the next step in their journey?”
Answers to these questions don’t live in a CRM – they come from a customer experience platform.
And, that’s why we believe Genesys landed in great company in the recent Gartner report: “Market Share Analysis: Customer Experience and Relationship Management Software, Worldwide, 2017.” In fact, Gartner ranked Genesys within the top five along with mega providers Salesforce, SAP, Oracle, and Adobe. Genesys is the only pure-play customer experience company among the five highest ranking vendors.
There’s no disputing the fact that customer experience has a real, tangible impact on a company’s bottom line – and that’s only going to keep growing. For that reason, businesses can’t afford to have CRM tunnel vision. Instead, they need to invest equally in a customer experience platform to run alongside the CRM. That’s how they’ll stay competitive, drive higher customer satisfaction, reduce churn and generate additional revenue.