If you work at a Consumer Electronics company, this video is for you.
In our CEO’s YouTube channel, we make plenty of videos about Customer Feedback and the value it has for different sectors and verticals of a company. In today’s video, Riccardo Osti will explain to you mathematically how to calculate the ROI of Consumer Feedback within this industry, by different perspectives. This means you will be able to see through numbers the Return on Investment and therefore the value that the voice of the customer can bring to your business.
This will be crucial in order to make the decision either to start analyzing Customer Feedback or not.
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In this video, I will tell you how consumer electronics companies can benefit from customer feedback, and ultimately, how to calculate the ROI of these activities.
Consumer electronics are electronic equipment for everyday use, typically in private homes. It includea devices used for entertainment, such as TVs, decoders, video games, drones, remote control cars, etcetera. Consumer electronics also include communications devices, such as telephones or tablets. Home-office equipment is also included…you can think of computers, printers… large electronics, like washing machines or refrigerators, are included too!
The cool thing is that most of these devices are now connected to the internet, which makes it more complicated to separate products in different categories. In fact, a thermostat could also become a communication device, when it can interact with your smartphone.
So…it is clear that this category can count on one of the largest datasets of consumer feedback. Online reviews from e-commerce, customer service data, NPS, emails, and many more
I really want to tell you how to calculate the ROI of customer feedback for every single interaction you may have with customers. So…what are these interactions? Here’s my list:
1 Customers search for information about the products they want to buy.
Usually, they search online, on blogs, youtube or ecommerce, where they can read product reviews. 80% of customers base their purchase decisions on reviews written by someone else. Reviews and other people opinions drive sales like nothing else…therefore you have to find the correlation between better reviews and increased sales. Here is how you calculate it
ROI: x% higher score = x% more sales – cost of improvement
2 customers purchase the products from your website.
When customers buy they evaluate how well you communicate on your website. They often ask questions via chat if you have one. Analyze their questions to identify patterns and improve your communication. Calculate the ROI on the point of sale by doing A/B testing and measuring conversion rates. Here is how you calculate it
ROI: Delta conversion rate A vs B * average purchase value
3 When customers receive their products is the right moment to ask for feedback again.
A good moment to collect their first opinion which should be in free text. But we can also ask them to fill in a net promoter score survey. If you want to know why it is better not to ask questions, here is the video.
4 we are now some months after purchase, and at this point, customers will decide if they are still satisfied with the product or not.
In any case, it is essential for the brand to know what is happening or what happened in the past with other users of the same product. Analyzing the chat, or the customer service data is key to make sure customers are happy and loyal in the long term. Especially the customer service is usually very rich in data, which makes it insightful but also expensive to analyze. Hence, it becomes very important to know how beneficial could this channel be for your company: Here is how you calculate it from a cost-saving perspective
ROI: Delta # calls before vs after the improvement * cost per call
You can also keep an eye on customer-centric metrics, such as Lifetime value, or the correlation between satisfied customers and churn rate.
If you calculate the ROI of each step, you will derive the total budget of a customer feedback project. Then find a partner that can help you to execute it. If the cost of the partner is below the total budget calculated, it would then result in a good investment, with positive ROI. Here is how you calculate it:
ROI: total savings + extra revenue – the cost of customer feedback analysis partner
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Learn how to calculate the ROI for the Logistics industry in this link.