We are faced with a major customer experience (CX) paradox.
That is, more than 80 percent of organizations aspire to be CX leader. Yet only one in five deliver good or great CX.
This scenario is playing out at a time when CX is under the spotlight like never before - investments in programs are increasing, CX regularly ranks among the top business priorities, and it is viewed as a key way to differentiate your business from competitors.
CX professionals find themselves under pressure to deliver great customer experiences and demonstrate to the C-Suite the ROI of investments in them.
The good news is there are many ways for CX professionals to show the return on investment in CX. And fueled with the right measurement tools, strategies, and processes a solid business case can be developed and value driven that could even lead to an increase in your CX budget for next year.
At Qualtrics X4 Sydney, we heard from major brands including Qantas, Atlassian, and Deloitte, about how they are designing and delivering exceptional experiences enabling them to breakthrough the noise. These sessions - and many more - are available on demand on the X4 Sydney Content Hub, providing you with direct access to some great advice and strategies for succeeding in experience management.
The importance of CX payback
Fundamentally, to secure funding for your program ‘CX payback’ is required. This means demonstrating to the C-Suite how the program will give back to the business, and in a way they can understand.
Unfortunately, happy customers do not always translate to higher profits - so organizations that simply track soft metrics like NPS and satisfaction won’t cut it. Rather, CX professionals need to profile the expected return CX will deliver, which means tracking economic behavioral drivers alongside the CX metrics.
Convincing the C-Suite to invest in customer experience - by speaking their language - is achieved in 4 steps:
- Define your objectives - Identify the CX metrics you are going to track - like NPS or CSAT; your financial loyalty objectives - such as boosting average spend or reducing customer churn; and set aspirations - for instance, being market leader by improving NPS by 5pts in 5 years. Combined, these objectives enable you to track performance and demonstrate to the CFO how you are helping the business grow its bottom line.
- Establish a CX baseline - To measure performance you need to know your starting point against each of the objectives set. As you start to measure your CX metrics, identify how you perform within different groups of your customer base, such as advocates vs. detractors in terms of both the CX metrics and the associated behavioral metrics. For instance, you might determine that advocates spend $1000 more on average than detractors.
- Calculate the CX value - For each customer segment identified determine the value of improved CX based on your aspirations - such as how will a 5pt improvement to NPS translate to revenue. This is the dollar value of changing the mix of advocates vs. detractors and will showcase the potential revenue gain achieved by boosting NPS. Fueled by customer insights you can pinpoint areas to focus on to optimize performance and results, and present it back to the business in a compelling story using facts and figures they can understand.
- Subtract CX operating costs - Determine the operating costs of your CX program - from resourcing it and the technology required to fuel a world class CX Management system - and subtract these costs from the revenue you expect to achieve. This represents the net benefit you hope to gain from your investment, and one of the main influencers in the final decision.
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Get bang for your buck
Having secured funding from the C-Suite, professionals now need to prioritize their CX investments for maximum impact. At this stage, it’s crucial to have an understanding of how the business performs across the entire customer experience, and what are the moments in the journey customers value most.
These insights are achieved through experience data, which enables businesses to understand why customers act the way they do - such as common causes of cart abandonment or what customers value from the brand and drives loyalty. Capturing insights around customer beliefs, sentiments, and emotions uncovers insights into the moments that matter in the buying journey, empowering retailers to optimize these experiences.
Combining customer experience data with operational data, like sales and churn, gives CX professionals unprecedented insights into what is happening, and why it is happening. As a result, retailers can make improvements to their CX programs using hard facts driving tangible business results.
Bringing the rest of the business onboard
Any CX program must align with the business’ corporate strategy. This helps secure company-wide buy-in through a deeper understanding of why the changes are being implemented. It also links the program to the company’s overall growth and success, helping you profile the potential impact it can have.
It is important to remember that among the processes and metrics used in your CX program, people remain at the heart of your customer experience success. As such, it is important to communicate regularly and consistently with your people when building, implementing, and running the program. Doing so helps secure buy-in and adoption, and helps align everyone around working toward a common goal to optimize results.
Closing the CX paradox
Following these steps when building your CX program sets you up for optimum success, while bridging the CX paradox that is currently apparent. They allow you to secure funding from the business, identify areas where you can have the biggest impact, and help educate and empower those employees responsible for providing your customer experience. The result will be a superior CX program that lives up to your aspirations, and which sets you apart from competitors.