Prioritizing and Measuring Customer Experience Projects


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There is quite a bit of information available about the business impact of customer experiences efforts. Some examples include:

  • Forrester estimates that improved experiences can drive from $46M to $1.7B in increased revenues, depending on the industry.
  • Bruce Temkin conducted a survey that showed that experience leaders exceeded laggards by roughly 15% in terms of their customers’ willingness to buy more, reduced likelihood to switch, and likelihood to recommend
  • Aveus conducted a noation research study and found that “organizations that have a well-understood definition of customer experience are TWICE as likely to beat their profit targets than those who do not.” (Details)

This information is very useful and illustrates the reason that customer experience is top of mind for so many companies right now. But, questions still remain. In particular, how should you prioritize and measure your own efforts, both to gain approval for projects and to evaluate success?

I believe that all customer experience efforts should be viewed from two perspectives.

  • The value delivered to the ultimate customer
  • The ROI delivered to the business

It starts with the customer so the first step is to walk in your customers’ shoes. Determine what the benefits your project will provide to them. Will it save them time in finding information to make decisions? Will it help them resolve problems faster? Will it increase their commitment to your organization? Its important to start with the customer benefits to continue to reinforce that customer first mentality.

Then, look at the company benefits. Will the effort save money and time? Reduce sales expense? Improve agent productivity? Company benefits and ROI are critical. You have to provide business value to justify investments.

If you are looking at multiple projects, prioritize the ones that deliver the most customer value and business ROI first. Then move on to ones that deliver the most customer value and good business ROI. Over-rotating on customer value will help build the customer first culture that is some important for CEM and reflect the potential future value (that is hard to assess) of building advocacy. Graphically, it looks like this:

While we talk a lot about putting the customer first, doing things that please your customers, but delivers no business value, is a waste of time. Here is an example. I was talking recently with Linda Ireland, of Aveus about customer experience. She really helped illustrate this point with an example from her past. She worked for a company that made a goal of responding to RFQs from their customer within a day. Regardless of complexity or other efforts, they would do whatever it took to meet that goal. Their customers loved it.

But, as they talked with those same customers about it, they found out that it was delivering no business value. While they always were the first to respond, their customers had to wait for the other quotes before they started reviewing or processing. While the early submission may have created a little bit of possible value, the reality was they could turn them in at any time, as long as they were not late, and still satisfy the customer.

After learning this, they changed their goal and focused on finding other ways to improve the experience of their customers while also producing business value.

I thought that was a key lesson. While we have to change our focus to put the customer first, we also are all running businesses. So focus on doing the right thing for your customer AND your business.

You can also provide the reverse litmus test. If you are looking at a project (or effort) that has well defined business benefits and ROI expectations, add an assessment of what the impact will be on your customers. If its good for them, that’s great. If not, maybe some additional scrutiny is required. You may find that the negatives, from a customer perspective, outweigh the apparent positives–particularly over the long term.

The development of additional metrics to measure customer value is a key step for the customer experience market. Its not just about customer profitability since advocacy (which may provide your business with incredible value) can come from any of your customers–even ones that aren’t big “profit generators.” I’d love to hear ideas on ways to measure customer value that are repeatable to help guide organizations on their CEM journeys.

Republished with author's permission from original post.

Hank Barnes
Hank Barnes provides research and advisory services on go-to-market strategies--particularly around marketing, positioning, and customer experience--for technology providers. Hank has more than 25 years of high-technology sales and marketing experience in both field and corporate roles, both as an individual contributor and the marketing leader for several startups. He is a long-time proponent of customer-centric marketing and the use of customer experience as a key differentiator for business success. His posts here include content from his days with Adobe, SAP, and now Gartner


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