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CX Growth Hacking: Focusing on Customer Conversations yields Higher Revenue

Engaging customers via conversations is a reliable way to improve the customer experience (CX), and as a recent Forrester report suggests, CX improvements lead to measurably higher sales.

Why does CX matter? Thanks to the internet, shoppers can easily compare products and services—not to mention seek out the lowest prices. That’s great for the consumer, but it presents a major challenge for brands. Do you take the Walmart approach and work to push prices as low as possible, in the hope of eking out profitability on sales volume? Or do you invest in a highly differentiated product ecosystem, as Apple has done?

Most brands, of course, lack the resources of a Walmart or an Apple. For the majority of companies, focusing on the customer may be the only durable brand differentiator.

The upside to a sharpened CX focus is clear, a January 2017 Forrester report—“Drive Revenue With Great Customer Experience”—explains. CX leaders, with lower churn, larger order sizes, and an army of brand advocates, grow revenue more quickly than CX laggards.

So how is it that conversations deliver higher sales through better CX?

Expanded retention opportunities

One of the major avenues for revenue gains among CX leaders is higher retention. The benefits of retention are clear: According to the Harvard Business Review, it costs between five and 25 times more to sign up a new customer than to retain an existing one.

It’s true that customers churn for all sorts of reasons, especially in competitive markets like telecom. But by delivering measurable gains in customer satisfaction scores, customer communities can greatly aid a brand’s retention efforts.

Simyo, a telco in the Netherlands, offers one example. The company observed that its most engaged community users churned at an 8% lower rate than its overall average.

Simyo is a CX outlier—it was named the Netherlands’ most customer-friendly telco for 2017. Yet the community is an extremely important piece of Simyo’s broader CX efforts.

Just how is it that communities increase satisfaction? By allowing customers to help each other, communities reduce time-to-resolution on support issues. That’s a big part of why the Simyo community has been (and continues to be) so successful.

Order enrichment

The benefits of conversation go beyond support, however. For e-commerce brands, or any company with an online store, communities can increase order values.

Growth Hacking Through CX: How Focusing on Customer Conversations Leads to Higher Revenue

Another inSided customer—whose name we can’t mention for confidentiality reasons—saw double the average order size among visitors who came from its community. The reason is simple: many of the conversations taking place within the community are product-focused.

After turning to P2P conversations to discuss this organization’s products, shoppers get their questions answered and concerns addressed. That makes them both more likely to buy and more confident in what they want.

The Sonos community is similar: Sonos users and newbies converge on the community to help each other find the best speaker configurations. Their tips and how-tos act as content marketing for Sonos: educating shoppers and driving more organic search traffic via improved SEO.

These two inSided communities, by giving shoppers an opportunity to learn from each other, improve the customer experience in a way that leads to measurably higher sales.

Increased brand advocacy

What really makes both communities a success are brand enthusiasts. They not only debate about and discuss their favorite products but help those new to the brand decide what to buy.

Yet it’s not just Sonos that attracts these kinds of enthusiasts. Even seemingly “boring” brands like telcos have super fans—and communities are the perfect tool for identifying them (not to mention leveraging them for authentic advocacy).

Brand enthusiasts, after all, want to meet other like-minded people. That’s actually what led to inSided’s founding: our CEO and CTO launched their own communities in the Netherlands in the 1990s, from which they built a conversation platform for brands.

Using this kind of platform to let enthusiasts—or super users, as we call them—find each other pays big dividends in terms of increased advocacy. Mature communities will typically have a couple dozen super users, and their commitment to the brand is clear. They’ll often create upwards of 20% of the content on a community.

Not only that, the advocacy they provide is authentic. That is, they genuinely want to help the brand get better—which makes them a great resource for insights and feedback.

Sonos taps into its super fans in this respect: It operates a beta community for co-creating and testing new products (on top of its normal community for all users).

Increased advocacy, larger orders, and higher retention: conversations improve CX to deliver all three.