With over $46 Billion spent on market research companies last year, the impact on business results is still elusive. Which answer would you select to score how well your research and insights efforts impact business results?
1. We have a ton of data and research, but we don’t really have a systematic way to link it to business outcomes.
2. It sounds great, but we don’t know where to start
3. What? I didn’t think we could do that!
No matter whether your response is one of these three answers or something different, every company evaluates its research/insights investment compared to other options to drive business results.
Our customer journey research efforts with global brands covers four key aspects of the “Path to Purchase”:
1. Marketing / Prospect Leakage – Turning unaware prospects into buyers and minimizing the “leakage” of prospects from the “Awareness-to-purchase” stage
2. Sales / Revenue Leakage – Ensuring that customers can spend the full amount of their purchase intention during the sales & renewal journey, and that “Revenue leakage” throughout the customer lifecycle is minimized
3. Customer Retention / Customer Leakage – Ensuring that customers receive the positive experience that will keep them coming back year after year and renewing their purchases with the company and brand. Especially important in B2B contractual customer relationships.
4. Customer Satisfaction / Loyalty Leakage – Ensuring that customers receive the “on-brand” experience that results in high satisfaction/NPS scores that drives and sustains positive word-of-mouth” marketing.
This is Part 2 of a 4 Part series on this topic to fully explore the richness of this critical topic.
Sales / Revenue Leakage
Our customer journey research for the initial customer experience to answer these questions:
• For a customer starting their relationship with us, how effective are we maximizing the revenue potential with them? Are we getting 100% of the full potential, or just a fraction?
• Based on our customer’s journey with us, where is our revenue opportunity leaking? Home much at each critical area?
• What does an “optimal, on-brand customer experience” look like? What would the impact of this be on our revenue trajectory?
• What can be done to improve the customer’s journey? What improvements have the highest impact?
A technology company serving financial, legal and professional services customers asked us these questions and challenged us to identify the “Customer Journey” as well as the “where and why” they were leaking revenue throughout the lifecycle. They instinctively knew that they weren’t getting the full potential from their customer opportunities – but didn’t have a way to measure, quantify and prioritize improvement opportunities.
Though qualitative and quantitative research as well as mining existing Voice-of-the-Customer and customer financial data we mapped a well-defined customer journey that also included customer satisfaction and revenue metrics from start-to-finish.
The insights that emerged included:
• There were dozens of friction points along the customer journey – well-known to the wide variety employees of the company – but not being addressed on a systematic basis
• There were 5 clearly identified “leakage points” along the journey that could be addressed by focusing on clearly defined, customer-driven improvements.
• Surprisingly, none of the improvements was to the core technology product – but all of it focused on the sales, training, support, and account management for the customer.
Linking these insights to business results allowed us to model and quantify the following:
• Over 30% of the revenue potential with their best customers was lost during the customer’s lifecycle – a finding that was similar across 4 different segments of customers
• Focusing on the 5 leakage improvement areas could result in a 50% revenue improvement for customers – representing an ROI of well over 200% for the improvement program
• These improvements would increase customer satisfaction and retention as well