|Image courtesy of CX Network|
According to CX Network’s latest Annual Global State of CX Report, showing return on investment (ROI) from CX projects is one of the top challenges troubling CX practitioners.
The report saw nearly 270 responses from the CX community, with each participant providing insight on the trends, challenges, and investments shaping customer experience. Just over 70% of those participants were part of the decision-making team in their organisations.
Evidencing ROI was highlighted by almost half of the respondents as the biggest block to gaining approval for future CX investments.
Some CX initiatives are relatively simple to justify financially because they have obvious cost or operational advantages which benefit both business and customer. The real challenge comes in when rationalising outlay to improve the brand’s customer experience based solely on predictions of increased future revenue.
As mentioned at the 14th Annual Global Summit for Customer Experience Management in Telecoms, to tangibly improve business results companies need to approach customer experience projects with the awareness that CX sprints are a part of a much larger journey.
Sprint towards the points of most value
When asked for the solution to this ROI problem, one common craving from research respondents was for better visibility on the initiatives that would have the biggest impact. This visibility is critical to prioritise the projects with the highest forecasted return.
CX projects with the most return will be rooted in the elements that customers value most. To detect where this value lies, you must build your awareness on what matters to your customers in their experiences with you.
Be warned – this may not be what you are expecting. For instance, radical feedback from a mother of five to a room of C-level executives led to phenomenal product innovation at Verizon. In reaction to the product the mother had suggested, Justin Reilly, Former Head of Customer Experience Innovation at Verizon said, "…no one in the room, some of the smartest people in the world, had come up with a switching product. So we built a switching product that went as far as the lawyers would let us go, and it’s been phenomenal. If you actually analyse the metrics of building it, it’s cheaper than building a product with discounts and all these things that we think customers want when they [in fact don’t.] Deep, personal research into what your customers want is often very time consuming, but if you get that right once a year [that can make a major difference]."
Internal cross-functional innovation teams are also crucial for breaking down silos of information and communicating the customer journey as it stands and where it needs to be. They can pinpoint the touches that are most crucial to the journey and in most need of improvement.
A group of CX practitioners based in Australia and New Zealand said the three critical make or break moments in their customer journeys are:
- Finding answers to basic questions quickly
- Resolving customer service
- Receiving relevant and personalised offers and recommendations
- Resolving support issues
- Resolving customer service (non-technical) issues
- Selecting a product that best suits buyer needs
In the Annual Global State of CX Report, Mark Gubbins, Business Performance & Insight Manager at British Airways, pointed to the driver model the airline developed from customer feedback. The model "...uses regression techniques to predict the impact on recommendation of any particular CX initiative based on the number of customers affected and the importance of the affected journey touchpoints to our recommendation metric (NPS). In this way, together with understanding the value of the customer segments affected, we can compare very different CX initiatives and prioritise those which deliver most for the customer.”
This sort of research helps CX teams build a business case that clearly articulates what they expect to achieve. References to historical improvements in NPS can be useful to rationalise investments.
This business case will lay the foundation for a formalised road-map for the CX sprint. This clear view of the CX sprint allows participants to track trajectory and make necessary adjustments.
Businesses often fall down by having CX processes and strategies that are too flimsy. In these instances, the firms enjoy financial returns but struggle to link it to the hard work put into customer experience projects.
Take a pit-stop
After or during the CX sprint, it is important to make sure movements in your customer index or metric actually correspond to the reality. This is needed in businesses that have relatively healthy satisfaction and NPS levels but still suffer from concerning customer churn rates.
When providing direct feedback, customers can say one thing but inevitably do another.
In order to untangle this strange dynamic, teams should measure customer sentiment using tools such as text analytics to discover signals that indicate what is actually making customers leave your business. Once you uncover these pain-points, instead of focusing on NPS, use these stumbling blocks as your main employee metrics. This method will ensure your brand is improving the factors that are of real value to customers and influential to their retention.
The race isn’t over yet, remember CX is a marathon
Firms that run inconsistent CX programs that are measured independently of each other will greatly struggle to see improvements in business results. This lack of strategic vision can negatively affect the company and its financial return.
Businesses can suffer from the temptation to use driver models to calculate the economic benefit of every customer initiative, however small. Mark Gubbins warns, "It is very easy to get too granular and to think of the customer journey as a series of business processes rather than view it holistically through the customers' eyes." He adds, "Don’t expect to find a simple mathematical relationship between NPS and revenue. At BA, we have explored such relationships and have concluded that the critical thing to understand is the relative importance that customers put on the various elements of the customer journey."
Instead of seeing CX initiatives as self-contained entities, businesses need to think holistically about how these projects connect in the story. This holistic view will reveal new tangential opportunities for CX wins.
It’s all about endurance, so always keep watch
Be sure to frequently assess your CX initiatives to spot opportunities for improvement and inform the next CX investments.
It can be tricky to isolate the impact of a CX initiative amidst the many variables influencing a business. CX expectations are fast moving, so initiatives may begin by providing marginal benefits but then evolve to provide revenue protection if the competitive set changes.
Mark Gubbins concludes, "CX programs to meet new expectations are not nice-to-haves, they are vital to stay in the game."
The businesses that enjoy the most CX traction and see ROI from projects hold onto that holistic, long-term view while they operationalise individual best practice improvements.
Chanice Henry graduated with a BA in Journalism, before diving into the world of B2B editorial focused on property finance. Shortly after this, for three years as editor of Pharma IQ and Pharma Logistics IQ, Chanice led the editorial direction of the portals to educate and inspire pharmaceutical professionals working to treat the world’s patients with targeted and effective medical care. Now as Editor CX Network, she continues to produce a range of premium-level content, but now for senior customer experience, service, insight, digital and marketing leaders.