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4 Requirements for Linking CX to ROI 

Ernan Roman | Sep 12, 2017 256 views 1 Comment

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Article by Ernan Roman
Featured on crmirewards.com

Eighty-one percent of consumers are willing to pay for a better experience, according to the Capgemini’s study The Disconnected Customer.” Yet, customers don’t feel that companies are delivering high quality customer experience (CX), and one in five consumers stopped purchasing from a company after a poor experience, Capgemini’s research found.

In our own ERDM learnings from more than 16,000 hours of VoC research interviews, consumers were emphatic that short-term sales-focused tactics were irritating, brand damaging, and undermined loyalty. As empowered consumers, they expected engagement oriented communications and experiences.

Here is a representative quote from the research: “You marketers don’t understand that personalized engagement post-sale is valuable for the customer and… forges strong ties with your company that serve as a ‘grace account’ upon which to draw when there is the almost-certain problem or outreach from competition.”

Chris Hull, Chief Merchandising Officer at the iconic American luxury lifestyle brand Shinola, puts it this way, “Consumers are looking for meaningful experiences that differentiate one brand from another. One way we do this is by designing our stores to engage the five senses:

  • Sight – see team members build bicycles or do personalized embossing;
  • Sound – a warm welcome and vinyl playing on our Runwell Turntable;
  • Touch – well-crafted products, such as watches and leather bags;
  • Taste – a complimentary bottle of Shinola Cola;
  • Smell – the smell from our Shinola candles lit throughout the store.

This is all part of conveying our distinctive handcrafted products and has resulted in higher engagement, satisfaction, and conversion rates.”

With this in mind, here are four factors that will help you link CX to improved ROI:

1. CX strategies must align with consumer demands

Too often sales strategies are spray painted to look like CX strategies. However, customers are smart and know the difference between sales pitches posing as engagement and true CX. They resent when marketers think that customers are too naïve to know the difference.

According to Nike Chief Executive Mark Parke in comments about CX strategy development, “The important thing to point out is that changes are being driven by the consumer…. They want it fast, easy, and [they want] personal service.” Nike has implemented measures to drive personalization and has seen sales improvements in a landscape where so many other retailers and brands are failing.

2. Accurate data is essential for driving CX initiatives

As Jim Conning, managing director at Royal Mail Data Services so aptly puts it, data accuracy is non-negotiable for ROI: “CMOs and marketing directors all understand the importance of accurate customer data, but I’m not sure that more inexperienced members of the team understand the increased ROI of more accurate data.” The company’s research indicated that 34% of marketers fail to fully understand the financial impact of poor quality data; 70% of the 300 companies surveyed admit to having incomplete or out-of-date customer data; and 6% of annual revenue is being lost through poor quality data.

3. ROI also requires CX-focused content

Irrelevant content hurts your brand, so stop sending spray-and-pray blasts!

This quote from our VoC research is a blunt reminder. “When I receive generic emails, it’s obvious that you do not care enough to understand my individual needs. Instead, you are trying distill my complex needs into simple generalities to make your email blast easier for you…and useless to me!”

Consider this from a Salsify Study: “If you provide superior content, and a competitive price, you have the opportunity to both close the sale and build long-term consumer loyalty.” The study found that…

  • 88% of consumers say that product content is extremely or very important to their purchase decision
  • Price matters, but it’s product content that gets consumers to buy

4. Establish CX-oriented metrics and compensate accordingly

New and additional metrics are required to track and compensate for CX-oriented behaviors. Too many companies fail to change metrics to reflect their CX strategies and still compensate based on legacy “sell ‘em and forget ‘em” models.

In this blog post, Michael Klein, director of industry strategy for the Adobe Marketing Cloud, presents some effective soltuions that brands can implement to select the optimal CX metrics. One, from Epsilon’s Rob Cantave, especially stood out: “CRM data helps us understand what current customers are interested in seeing. Combining that with our third-party data lets us better understand what clusters of customers have in common. We present that information to the automated models and have them test and ultimately identify the product, categories, or content most likely to be of interest to returning customers and brand new unknown users who’ve been seen elsewhere in our network.”

Linking CX to ROI is a complex, multiphased, and corporate-wide pursuit. Remember:

  • CX requires company-wide consistency and communication so employees understand and are trained on the goals and behaviors they need to demonstrate every single day.
  • It also requires an omnichannel, data-driven strategy that’s based on meeting the requirements consumers indicate are important—to them. CX is useless without a consumer-focused approach because it will be observed as sales-y and meaningless.
  • Similarly, irrelevant content is perceived as demonstrating that a brand does not care about developing long-term customer relationships.

To achieve maximum ROI, companies need to rethink how they view CX and build impactful and sustainable strategies to satisfy customer needs over the customer lifecycle.

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One Response to 4 Requirements for Linking CX to ROI

  1. Andrew Rudin September 15, 2017 at 7:28 am (218 comments) #

    Hi Ernan: I’m not surprised to read Salsify’s ‘88%’ finding. The company provides content management services. A company that sells pricing algorithm technology might develop and share similarly compelling numbers to persuade readers that revenue yield management is the holy grail in online commerce.

    Another ‘study’ I uncovered just now (http://www.marketingprofs.com/chirp/2014/25957/how-product-packaging-affects-buying-decisions-infographic) puts Salsify’s stat into dispute: “One-third of consumer decision-making is based on packaging,” according to The Paper Worker.” If you follow the link, you’ll find a handy infographic. If you figured that The Paper Worker is a packaging company, you are right.

    Well, heck, it can’t be both! But the statistical nuggets don’t offer any deeper insight or nuance. More importantly, they don’t reveal the vested interest each company has in the results their self-conducted surveys provide. Between them, the numbers don’t comport, but the element that ties Salsify’s assertion to The Paper Worker’s is that the ‘findings’ make each company’s offering appear more compelling.

    That’s by design, and that gripes me. Unfortunately, I think it has become ever more important that all of us become warier about the potential for misuse of statistics.

    It’s no epiphany that companies regularly provide “facts” that support their value props and marketing messages. Also no epiphany that marketers use self-generated statistics to guide customers and prospects into thinking how they want them to think.

    The best way to combat this misinformation and highly skewed points-of-view is to first have a skeptical outlook. Where did the statistic come from? and did the organization have a monetary interest in the result that was determined? I just posted an article on this topic, Skepticism: An Antidote for Statistical Malpractice. It includes some additional questions that I wish I knew to ask before, but will always consider in the future.

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