Your 2023 CX playbook: economic modeling, data science, financial metrics and adequately preparing frontline employees for changes in customer expectations.
The realm of customer experience (CX) is rapidly changing as customer preferences become increasingly specific in our post pandemic landscape.
To remain competitive, businesses must be able to adapt their customer strategies accordingly in order to meet needs and exceed expectations. Now is the time to look ahead by discussing customer experience predictions for 2023 and beyond. Based on both quantitative and anecdotal research, we’ll explore the techniques, strategies and approaches that your team should be aware of when catering to customer’s needs in this new era.
The Importance of Economic Modeling
Get ready — because we are about to see a surge of CX teams using economic models. As businesses strive to remain competitive in today’s digital landscape, economic modeling has become an essential tool for developing customer experience strategies. In the age of big data and artificial intelligence, economic models allow companies to accurately forecast future trends and make informed decisions on how best to optimize their customer experience. By understanding the economic forces that affect customer behavior, businesses can proactively plan for potential disruptions and develop strategies that will help them stay ahead of the competition in 2023.
Simply put, economic models help us understand customer needs, enabling us to better anticipate customer demands and develop customer-centric strategies in preparation for the future. For example, economic models can be used to understand demand elasticity, allowing firms to know when it is profitable to increase or decrease prices based on market conditions.
Additionally, economic models provide insight into how customers value different features or services offered by a business. This, of course, allows companies to better target promotions accordingly. With this information in hand, businesses are able to adjust their service offerings according to what drives optimal growth and profitability with minimal risk exposure.
Note: If you’ve never built an economic model before and need some help getting started, I found this video to be very helpful.
Related Article: As Economic Headwinds Gather, Make Customer Experience Excellent
Data Science Reigns Supreme
Data science is quickly becoming one of the most important areas of study for customer experience management. In 2023 (and beyond), data will be used to identify customer trends, predict customer behavior and inform customer relationships. By leveraging data-driven insights, businesses can tailor their strategies to meet individual customer demands as well as understand customer needs on a larger scale.
Data scientists have training on powerful tools that look at predictive analytics, which places them in a unique position to understand consumer behaviors in real-time and develop tailored experiences based on individual needs. And now, with machine learning algorithms, data scientists are also able to identify patterns in customer interactions and use this information to build out experiences that increase engagement, loyalty and retention.
Ultimately, data science enables companies to create smarter customer experiences that lead to increased revenue growth over time.
Start With the Customer Metric That Begins With a Dollar Sign
When pitching any new strategy to company executives, one of the key elements that businesses must focus on is proving profitability up front. As the economy continues to fluctuate in our post-pandemic world, this is going to become even more essential. The success of any new strategy depends heavily on its ability to drive profits and show a return on investment — and customer experience is no exception. Without having this proof up front, it’s much more difficult for companies to convince Wall Street and stakeholders of the value in investing in such a strategy.
To effectively prove projected ROI, you must demonstrate that your customer experience initiatives are aligned with long-term company goals and objectives, provide examples on how you intend to measure tangible returns on investment, and how you intend to create an environment where customers feel appreciated and valued. As we move further into 2023, the ability to show how your efforts will result in improved profits as well as increased customer loyalty over time will be crucial for the success of any department.
Keep in mind that company executives are ultimately responsible for making decisions that will lead to increased profitability and growth. They also have people (several people, usually) that they must answer to for any project they approve.
Not only will effectively proving ROI help the initiative get off the ground, but it will also ensure it has the resources necessary to be successful. Furthermore, it can help businesses stand out in a crowded industry. (The one thing executives tend to like just as much as dollar signs is getting a leg up on competition.) Ultimately, with the right evidence and data, businesses can ensure that their efforts will be rewarded and result in long-term success and revenue growth.
Related Article: The ROI of Investing in Customer Service Training
Prepare Your Team to Meet Changing Customer Expectations
In 2023, it’s expected that customers will have higher expectations in regards to speed and problem resolution when it comes to their interactions with businesses. As such, companies need to start preparing now so they can meet those expectations when the time comes. The key to success lies in having a well-prepared team that understands the ins and outs of an exceptional customer journey.
So here’s what CX leader can do:
- Invest in training: Ensure your team has access to the right resources, such as industry-leading tools and best practices, to stay ahead of the competition. Investing in training will ensure that everyone on your CX team knows how to effectively use the tools and strategies at their disposal for a successful customer experience.
- Leverage customer feedback: Monitor customer feedback to better understand their needs and expectations, then use it as a guide for how your team should be performing and where they should be focusing their energy. Using feedback can be an invaluable practice when informing decisions about product development or potential changes in internal processes.
- Stay up-to-date on trends: It’s important to stay abreast of industry trends and developments in order to keep up with customer expectations. Monitor strategy changes you notice in competing businesses and make adjustments where necessary to ensure your team is staying one step ahead. To do so, I would suggest monitoring your competitors’ press releases, news interviews, websites and financial reports. This is all public information and is usually quite revealing.
In 2023 and beyond, customer experience teams will start to focus more on economic modeling, data science, financial metrics and adequately preparing frontline employees for changes in customer expectations. By understanding customer trends and implementing the necessary strategies now, companies can ensure that they are well equipped to meet customer demands in the years ahead.