Customer experience dashboards and compensation shape your culture.
— Revenue emphasis = mercenary culture.
— Narrow scope = myopic culture.
— Score-based = self-centric culture.
— Root cause focus = value culture.
When Vodafone mistake-proofed root causes of customer experience gaps, value ebbed and flowed accordingly!
- Gray trend = their mistake-proofing performance.
- Blue trend = their market share (4-month lag).
- Market share echoed mistake-proofing.
- Mistake-proofing is the leading indicator of value growth.
Your company’s behaviors cause customer behaviors, which cause cost trends and revenue trends.
CX ROI Dashboards
Best CX ROI Dashboards:
— Illustrate causes and their effects.
Effects = financial performance.
Caused by customers’ revenue and cost behaviors.
Caused by customers getting what you promised, or not.
= Customers’ Gains.
Caused by (1) your management of expectations and
(2) your performance to their expectations.
= Your Process Improving.
Truth and empowerment prevail when your CX dashboards show these 4 levels. Silos prevail when they do not.
- Lagging indicators: stakeholders see it before or when you see it.
- Leading indicators: you see it and can act on it before stakeholders see it.
Make it possible for employees at the team level and executives alike to connect the dots between metrics with a 4-tiered dashboard like the one above. This brings clarity to strategy and execution.
Create line-of-sight for everyone by showing all metric levels at-a-glance.
This “flag chart” allows executives to assess performance immediately and drill-down to study performance leaders and laggards within your company. Continually help laggards come up to par for companywide consistent performance.
CX ROI Compensation
Early in my career, I showed my Vice President how bonus compensation can be based on survey ratings (like Net Promoter Score, Effort Score, and so on).
Wisely, he said, “No way! People need to have control over their bonus pay. We will only award bonus pay for performance that produces over-and-above outcomes for customers.”
In the CX ROI Dashboard at the top of this article, therefore, 80% to 100% of bonus pay was based on the year-long trend in “Your Process Improving” in terms of “Customers’ Gain”.
Examples of Your Process Improving for Customers’ Gains:
— 16X reduction in customers’ time for service
— Exceeded customer expectations by 75%
— 10X increase in customer productivity
— 23X reduction in lead time from 5 days to 5 hours
— 6X improvement in trouble-shooting cycle time
— $1M savings monthly to the customer
— 80% reduction in customer engineers’ learning cycle time
— 75% reduction in customer-reported bugs/issues
These are real achievements by business units when I led companywide CXM at Applied Materials.
Like the Vodafone example above, Our Process Improving for Customers’ Gains gave us these advantages:
— Saved us millions of dollars in costs.
— Saved us millions of hours in resources.
Truly: 22K employees x 46 hours/year = 1M hours.
— Allowed us to re-assign people to growth.
— Allowed us to re-assign budget to growth.
— Freed-up customers to grow more and spend more.
— Elevated trust and relationship strength.
— Increased sole supplier contracts.
— Grew market share, profit, and revenue.
When you ignore the 2 bottom tiers of the CX ROI Dashboard shown above, your growth efforts and savings efforts are throwing good money after bad, because you continue subpar process performance and customer value performance.
My CX team led both inner and outer loop VoC (shown below), with a major focus on every P&L making a root cause action plan for their top 2 key drivers of loyalty.
Therefore, we had 100+ outer loop plans underway simultaneously, upgraded to the next key drivers each year, for many years.
Their action plan progress was monitored by internal metrics called Customer-Critical Factors: Our Process Improving for Customers’ Gains.
My team went to every P&L business unit to conduct a root cause action plan workshop. The General Manager signed the one-page strategy produced in this workshop before we left the meeting. This was during the quarter preceding the Strategic Planning kickoff. Therefore, customer needs were top-of-mind for everyone in their strategic planning.
Outer loop VoC is where the huge CXM ROI is.
— It benefits ALL existing and future customers.
— It stops issue-specific perpetual costs.
— It’s the foundation of lifetime value.
— It seeps customer-focus into all levels and departments of your company.
Every quarter, my CX team collected every business unit’s one-page strategy from their workshop, with a graph showing the past 3 periods’ performance, current performance, and forecast for the next 3 periods’ performance. We made a CX Greenbook of these one-page progress reports for our Senior Leaders to review alongside the Operations Bluebook and Financial Blackbook before their quarterly conversations with the investment community and media.
This made it easy for Senior Leaders to connect customer outcomes and business outcomes in the same sentence publicly and internally.
At year-end, my VP and I met in a 15-minute video conference with each business unit’s General Manager. Based on impressiveness of Our Process Improving for Customers’ Gains, we scored the business unit with a multiplier between 0.5 and 1.5 for their bonus payout. For example, if the CX bonus pay was $20K, then the business unit Directors-and-above could receive $10K to $30K, depending on the multiplier score. It was fun to see General Managers striving for top performance. We did this for many years, and extended it to all functional areas.
This is how your Core Customer Experience Team becomes mission-critical, instead of a nice-to-have resource.
This is how you multiply profit and revenue, instead of getting side-tracked with quick wins or duplicating what Marketing and Sales are already supposed to do: drive references, recommendations, acquisition, and retention. As shown in this case study, our CX Team amplified and accelerated the productivity of Marketing and Sales — AND ALL business units and functional areas.
CX ROI Recognition
Reward proactive teamwork in customer experience excellence. Heroics are contradictory to consistent alignment of your company to gap-free CX as described above for your CX ROI Dashboard.
Set up recognition and compensation to reward employees and partners at 3 graduated levels:
— Resolve each instance of CX gaps.
— Stop root causes of CX gaps.
— Prevent occurrence of CX gaps.
Establish categories and criteria for each of these 3 levels and create high visibility among employees and partners to stimulate their proactive participation.
Categories and criteria communicated new performance standards to employees, including customers’ acknowledgement of improvements. This is how we accelerated customer-centric culture at Applied Materials.
- Self-reporting empowered teams to track their progress per the criteria before submittal.
- Panels of executive judges provided constructive feedback.
- Teams missing the mark could re-submit in a future quarter.
- Winning teams’ achievements and methods were announced in every possible format.
The more visible this recognition is, the more it will shape your culture and yield high-growth CX achievements.
— Advertise criteria transparently and continually.
— Celebrate teams’ achievements and lessons learned to everyone in your ecosystem, in as many channels possible.
CX ROI Handbook Summary
In this 5-part CX ROI Handbook series, you’ve learned the following highlights. Revisit each handbook chapter for extensive detail in what, why, and how to bring these principles to life in your organization.
ROI = Return on Investment
= What you get is more than what you spent.
= Benefits received from costs.
= Effects received from causes.
Applies to money, time, effort, advantages.
CX ROI = Return on CX Investment
= How your customer benefited.
= How your company benefited.
CX is what customers experience as a result of your company’s decisions.
— CX is customers’ ROI on your behaviors.
— CXM is your reactive and proactive management of CX.
“Value gained” means a change happened:
— “After” is better than “before”.
— More money, time, energy, or opportunities.
— Less cost, delay, stress, or squandered potential.
Proving value means gains to customers and gains from customers.
— You can prove CX value in dozens of ways.
— Value to customers generates highest value from customers.
3 myths cause low CX ROI:
1) Quick Wins
True: Quick wins are short-term value.
True: Root cause resolution is permanent value.
2) Partial Data
True: Executive decisions are based on relative size of risks.
True: Nobody cares about the pennies. Make logical estimates.
3) Control
True: The people affecting value do not need to report to you.
True: CX ROI is greatest when you influence all general managers.
Customer value and employee value go hand-in-hand: they’re reciprocal.
— Employee value is highest when employee experience maximizes customer experience.
— This way, more budget enriches and empowers employees.
— Customers fund everything, while employees provide value for that funding.
Outcomes of managing costs and employees affect customers and investors reciprocally.
Customer outcomes never differ from business outcomes, and vice versa.
If executives don’t yet see how 9700% CX ROI is possible, simplify your CX Leader role by focusing on the 4 gold CX ROI metrics:
1. CX-Inspired Growth
2. CX-Inspired Performance
3. CX-Inspired Efficiencies
4. CX-Inspired Strategies
If executives expect your CX Team to drive revenue, remind them why customer experience management exists.
Bring your culture up to par with the best-loved brands with CX dashboards, compensation, and recognition that focus managers on closing gaps and preventing gaps in what customers get versus what they expected.
Seeking a 1-to-1 ratio in what customers get versus expect, with root cause focus, is how you establish a value culture that outpaces industry norms for growth in all dimensions.
This article is the capstone of a five-part series:
1. Customer Experience ROI Handbook: What is CX ROI?
2. CX ROI Handbook: Proving CX Value to Executives
3. CX ROI Handbook: Connecting Employee Experience and Customer Experience ROI
4. CX ROI Handbook: Business Outcomes and Customer Outcomes
5. CX ROI Handbook: CX Dashboards and Compensation