With investments in digital transformation initiatives outweighing overall IT spend in some industries, it's critical for companies to have a means of determining if the investments are having the intended effect on key objectives. Unilaterally, 80% of companies in any stage of digital transformation cite improving customer engagement as a priority.
Tapping on this, both Avaya and Frost & Sullivan have recently released a new research and calculator tool that aims to help companies determine how they are performing in terms of customer engagement.
The research into Customer Lifetime Value (CLV) identifies qualities that separate high-performing companies from others, and how customer engagement can be influenced through a blend of business orientation, resource management and technology. Measuring CLV can help companies stay on track for success since the research shows that companies tracking CLV significantly outperform others in terms of profitability and growth.
According to a joint media statement, CLV is the present value of all the future cash flows attributed to a customer relationship. It includes the projected amount of money the customer may spend and such items as the cost of new customer acquisition or savings from customer retention, the propensity of a customer to refer the company to others and the cost of their loyalty.
Against digital transformation initiatives, measuring CLV helps companies see how all decisions and actions are tied together and encourages a long-term look at the customer relationship rather than short-term quarterly impacts.
Measuring CLV is a challenge for many, however, and those that do often question whether they are getting an accurate picture. Among the challenges cited are understanding what to track, incomplete data, onerous efforts needed for tracking, and disjointed systems. The CLV Calculator helps companies work through the areas and questions that can help them better understand what and how to measure.
The research also uncovered how and where CLV can be influenced. Successful CLV businesses placed the highest priority on the customer experience and brand, and saw the contact centre as the epicentre of managing the customer experience and responsible for ensuring long-term loyalty.
Customer experience management drives higher customer engagement and CLV because it helps improve customer satisfaction for better revenue potential, brand advocacy and longevity of relationship while reducing customer acquisition and support costs.
Contact Centres and the technology supporting them are essential to success by enabling three criteria to optimal CLV as indicated by the research: an omni-channel customer experience; backed by enterprise-wide team engagement and access to actionable insight at all appropriate levels.
"High Internet and mobile penetration rates digitised the Asia Pacific region, giving consumers access to more information and choices. With customers increasingly being well-informed, demanding and more likely to switch brands, quality customer engagement and experience have become more important to businesses, big or small, in retaining them," said Mike Ansley, President, Asia Pacific, Avaya.
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