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How Ineffective Communication Costs Businesses — And What to Do About It

Business success hinges on how well companies engage with their customers. Interactions must be clear, concise, and consistently on-brand to deliver remarkable experiences and instill brand loyalty.

When customer interactions do not meet these standards, it is often because the best-intended communications strategies break down. This happens frequently and creates tremendous costs for companies by eroding the customer experience (CX), making it harder for employees to do their job, and causing delays in meeting business objectives. For example, even before the onset of the COVID-19 pandemic, experts estimated that poorly written communication costs businesses a staggering $400 billion annually.

The pre-pandemic challenge facing businesses already pointed to the need to improve communications between companies, customers, and employees. Now emerging trends, many exacerbated by the pandemic, are increasing the cost companies bear due to ineffective communication — but also the value they can capture by addressing it.

A Rapidly Changing Landscape: Customers, Companies, and Employees in 2021

Ongoing global disruption — with evolving technology, changing demographics, and, most recently, COVID-19 — is reshaping changing customer behaviors, upending company operations, and creating new demands on employees at an unprecedented rate.

Customers have vastly different needs and behaviors than they did a year ago. E-commerce spiked and now accounts for more than 16% of all U.S. sales. Digital adoption accelerated at the rate of five years in just two months and is expected to continue in 2021. As more customers engage over more digital channels, winning over their loyalty is harder than ever. And customers are holding companies to a higher bar; 67% expect companies to anticipate their needs, and 38% are willing to stop doing business with a company altogether if its efforts are inauthentic.

As a result of these changing expectations, organizations face new levels of complexity as they look to move faster and efficiently meet customers’ needs. The pandemic has led many companies to decentralize operations and deploy a rapidly growing number of digital tools in an attempt to maintain engagement with employees and customers. Yet, effective written communication is often an overlooked line item — considered too intangible or thought of as a “soft skill” addressed with targeted training, despite its importance for efficient business operations.

Moreover, for employees, working in an increasingly remote, diverse environment — while being held to the same standards — creates new strains that impact levels of engagement and output. To this end, effective communication must also be aimed at internal teams, particularly to meet the needs of English-as-a-second-language employees. The employee experience and customer experience go hand-in-hand, and organizations must communicate well both internally and externally to drive cross-functional collaboration and consistency.

What business and CX leaders must realize is that overcoming these challenges centers on building effective communication. As more communication is happening across a rising number of digital systems, the cost of communicating ineffectively touches every part of the business — just as the benefits of communicating well create value organization-wide.

Is It Really Worth Investing in Effective Communication?

Effective communication, particularly in written form, is paramount for any customer-facing organization to reach its goals. In marketing and sales, quickly producing engaging, high-quality content directly drives growth. For support, responding to customers with clear, efficient written communication resolves customer issues faster and lowers the cost per support ticket. Consistently delivering a high standard of communication across all customer-facing teams and channels improves the customer experience and the meaning of a company’s brand to its customers.

As the business landscape continues to evolve and compound the challenges facing teams, it’s time to reconsider investments in effective communication. The financial cost of poor communication is growing along with the impact on customer experience. New technology and AI capabilities are available to improve communication that were not just five years ago. And many employees already try to solve communication issues for themselves by using consumer-oriented products at work.

Let’s consider a few company examples. One of the world’s largest global CX management companies recently adopted an AI-powered writing assistant to drive higher-quality customer support interactions, resulting in a 17% improvement in customer satisfaction scores and a 22% lift in efficiency. How? By better responding to and connecting with customers the first time, they saw faster ticket resolution, a greater volume of tickets resolved, and an overall better customer experience.

Another top consulting firm advising the Fortune 1000 needed to produce more engaging, compelling research reports and marketing materials for senior buyers. But it was challenging to keep up with the fast pace and rising number of materials they needed to produce. By deploying an AI-powered writing assistant married with new AI-defined scoring standards on written communications, the firm increased productivity by cutting editing time by 66% and completing 500+ new projects in a year.

How Can Leaders Assess the Value of More Effective Communication?

The first step is to recognize written communication is an increasingly essential way that business gets done. The second is to recognize that evaluating the potential impact of investments to improve communication starts with the core performance metrics that matter. Then, by taking an outcomes-based approach to the value at stake, leaders can start by asking three questions:

What business outcomes matter most for my function? (E.g., customer retention/growth, sales productivity, lower service costs, pace of hiring, etc.)

Which daily written communication issues impede performance? (E.g., off-tone/-brand interactions, delayed proposal creation, decreases in first-contact resolution, unclear or non-inclusive job postings)

What happens if left unaddressed? (E.g., trade-offs between CX and cost efficiencies, slower growth and productivity, increased churn, pushed or lost deals, rising costs to service, delayed hiring)

If you identify one or more business objectives at risk due to written communication issues, then there is most likely significant value to be gained by addressing it. The impact of ineffective communication has silently been borne for too long by companies, customers, and employees alike, and the costs are rising. The upside is that there is significant value waiting to be unlocked.

Conclusion

These days, customers have less time and attention to interact with brands, so companies need to get their engagement right every time. But this is easier said than done amid the many evolving challenges facing organizations, and things like flawless grammar and spelling are table stakes in this environment. By building truly effective, compelling communication both within and outside of the organization, business and CX leaders will position themselves well for the year ahead and ultimately generate a better customer experience that boosts the bottom line.

By Dorian Stone First published at https://www.cmswire.com/customer-experience/how-ineffective-communication-costs-businesses-and-what-to-do-about-it/ January 29, 2021