Follow the Chain of CX Value to Drive Impact

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Done right, CX is a business discipline where organizations thrive by investing in an improved customer experience. That notion is largely accepted, even though it’s not always practiced.

The challenge there is knowing where to invest.

Success requires finding the sweet spot where an improved experience leads your customers to spend more with you, stick around longer, and/or engage with you in less-costly ways.

So how do you find that sweet spot?

By working the issue backward and managing it working forward, through the Chain of CX Value.

The first step is to identify sub-components of revenue or costs. Overall revenue is too general. Instead, look for the areas we identified last month: the sources of value, such as order velocity or cross-selling.

Let’s use cross-selling as an example. That’s when you create an experience that is so compelling your customers are more likely to consider your other offerings. This then can become the target of your Chain of CX Value.

Follow the breadcrumbs

Once you identify that target, work with your analytics team to understand what improves it or degrades it. For example, one recent Heart of the Customer manufacturing client targeted product margin. Working with their analytics team, they determined that improving on-time delivery wasn’t enough to encourage clients to order their higher-margin products. Instead, it took a combination of three metrics – on-time delivery, the correct product, and no defects.

It’s not rocket science, but it was critical to demonstrate that addressing on-time delivery on its own wouldn’t be sufficient.

Next, look for other operational or behavioral data to see what impacts and predicts these three metrics. In the case of this manufacturer, orders placed within the lead-time window were more likely to cause shipping issues. This, in turn, caused multiple other issues, from lack of collaboration to poor forecasting.

So, working backward toward the source of value, the Chain of CX Value was:

Multiple issues  → Orders Within Lead-Time Window → Shipping Issues →
Fewer Higher Margin Products Ordered

Now it’s clear that the resolution is found in working forward, starting with the various causes of Orders Within the Lead-Time Window.

Where do CX’s common tools, such as voice of the customer (VoC) or surveys, fit in? Surveys are used to help understand the impact of these issues. Meanwhile, VoC – especially interviews – is used to understand the root causes. Getting outside of these traditional tools to follow the chain is the challenge.

This is the future of CX as a profession – diving down into the root causes of issues. It’s similar to what our cousins in Six Sigma do. But instead of starting with operational issues, we start with shared customer and business pain, identified through surveys and VoC.

If you’re looking to drive more customer-focused change, spend some time looking at your data and its link to customer and business issues. This is already the practice for many of the Change Makers we interviewed during our comprehensive research initiative last year.

They know how to drive real customer-focused change. Now you can, too.

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