It is widely known that in business, nothing trumps revenue growth and profitability. Since capturing the ROI of real-time customer feedback can be difficult, hospitality professionals often struggle to persuade executives that CX initiatives are worthwhile investments. Here, we explain how collecting customer feedback during a customer's visit can increase your Net Promoter Score (NPS) and retention rates, thus generating financial return for your business.
Acting on customer feedback leads to higher NPS
Brands that invest in a real-time customer feedback tool with operational capabilities have the power to make dramatic improvements to the customer experience. This is because real-time feedback tools designed for operations teams empower the right staff members to take actions that resolve customer issues before the they leave. However, the impact on customer satisfaction goes beyond service recovery. When your customers feel like the business cares about them and is listening, they will be more satisfied overall.
By acting on customer feedback, businesses can achieve a higher number of loyal promoters versus passive customers. A new Forrester study found that 80% of customers who use Local Measure’s feedback tool give higher post-stay survey scores in comparison with customers not interacting with Pulse. Businesses that have more loyal advocates can reduce their customer acquisition costs, driving higher future growth and potentially more financial benefits.
"80% of customers who use Local Measure’s feedback tool give higher post-stay survey scores"
Increased NPS improves customer retention rates
A study from think tank organization, thinkJar, found that 55% of consumers are willing to pay more for a guaranteed good experience. With competitive pricing and an increasing number of options, customers’ priorities have shifted from price to the value of the entire customer experience. Thus, businesses that integrate real-time customer feedback into their CX planning can not only close the loop with maximum efficiency, but also provide more value to customers across their journey through personalized interactions. For example, service teams can support customers that are most at risk of churning by prioritizing action on 1-star ratings over 3-star ratings, thus increasing these customers’ retention rates.
Since NPS is a metric that indicates customer loyalty, businesses can expect incremental financial returns with the achievement of higher scores. While the probability of selling to a new prospect is only 5 to 20%, the probability of selling to an existing customer can be up to 70%. That means when businesses increase customer retention rates by just 5%, they can increase their profits by 4 to 10 times.
For CX professionals, the value of in-stay customer feedback is clear. However, in order to demonstrate the value across the business, consider developing a business model that successfully communicates the ROI of your real time customer feedback platform.