If you come across anyone that is not convinced about the efficacy of CX initiatives, the best way to remove any ambiguity is to measure satisfaction metrics against key financial outcomes. For a customer experience manager, failing to map customer experience performance against key the financial outcomes, is like a financial controller trying to run a business without a managing cash flow.
You cannot gauge CX performance without requisite analysis of results against key outcomes. It is hugely important to gather and analyse feedback, but very difficult to drive key decisions and assess progress without charting performance against key financial outcomes.
If you can grow the number of customers that are satisfied and delighted you will see a positive correlation with the key outcome. The key outcome depends largely on the industry in question, but it is often best advised to get buy-in form the finance department, as these are the guys that will have access to the key financial outcome data.
2 Tips for successful ROI analysis
1. Identify the right key outcome for your business
In business, in the vast majority of cases, the key outcome is profit, but from a CX perspective, there are other more important underlying issues that satisfaction should be measured against. Get this part right and the profit will follow. For example, in the hotel industry, key outcomes may be occupancy or spend on items outside of the cost of the guest room. In a 2010 study of 20000 guests, satisfied customers were found to spend more than double that of unsatisfied customers on ancillary services.
In the utilities market reducing churn is a key outcome, reduce churn, and, all other things being equal, you will increase profit. In this sector, where products are more like commodities, (more and more products are becoming like commodities incidentally) managers need to examine the relationship between satisfaction metrics, such as first call resolution, or billing accuracy with the key outcome, i.e. churn.
The same key financial outcomes, which are largely dependent on the business model, are often applicable in a range of industries. While in telecoms, a key outcome is ARPU (Average Revenue Per User) just like other utility providers, another key outcome is keeping churn to a minimum.
Having regard to key financial outcome analysis, you cannot underestimate the importance of identifying the correct outcome for your business. To get this right, find out what the industry norms are, but it is also healthy think of some that might relate specifically to your own strategic objectives and positioning, for example, outcomes directly related to a promotion for loyal customers.
2. Figure out the motive behind the satisfaction
It’s good to look at overall satisfaction and measure it against key financial outcomes; unfortunately this often doesn’t go far enough. Let’s look at banks for example. While one might expect the key driver of customer satisfaction will be related to the banks’ ability to deliver a good service, there may correlations with other unrelated issues, such as the level of wealth a customer has, or the ability to use online banking.
In a utility company, for example, if a customer continually fails to pay their bill and they get cut off, then it would usually follow that they are not going to be satisfied. So when measuring this customer’s satisfaction data against the financial outcome, regard needs to be had as to what is motivating the level of customer satisfaction or dissatisfaction. This means it is advisable to group customers according to motive. Statistical methods can also be employed to help remove ambiguity.
Categorising customers makes it easier to align resources strategically, and can give you a clear understanding of what is impacting on the financial outcomes. In addition, it will make it easier to deliver an enhanced experience aligned to specific customer needs.
