What this adds up to is a combination of evidence and perception. While CX initiatives are rightly concerned about increasing customer satisfaction, clearly this must be linked to other business metrics. Having a positive view of CXM efforts doesn’t hurt, although this research didn’t explore how this might be obtained absent tangible evidence of CX improvement.
Why shouldn’t CXM be considered a cost of doing business? Elite brands, where CXM is deeply integrated into operations, may not see a strong need for justification. For most companies, however, investing in practices, people, and technology requires CX leaders to compete for budget dollars just like other department heads. For the 19% of Developing CX initiatives where sponsors have no expectations of benefits, a change of leadership can leave CX leaders flat-footed. At one large technology company, an entire CX team was disbanded after a change of leadership because there was no business rationale to maintain a centralized resource.
Unique Value for Each Stakeholder
Building a business case is not just about an ROI calculation. It’s about building relationships and trust with key stakeholders, according to CX leaders interviewed for this research. Spend time understanding their key pain points and business goals, and strive to find ways that CXM can help them succeed – individually. Imagine that a CX leader wanted to show value to executives in marketing, sales, and customer service organizations. Conducting interviews will reveal different opportunities for each.
Marketers are usually tasked with brand building, lead generation, and customer communications. B2B marketing expert Chris Ryan of Fusion Marketing Partners says that, instead of just dealing with problems, CXM could help marketing identify happy customers and “look for chances to make heroes out of your customers.” Getting advocates to participate in case studies and referral programs would be a big win for marketers, and thus are potentially a win for CX leaders, too.
Senior-level marketers are also seeking better customer insight, says VoC marketing expert Ernan Roman of ERDM. CX leaders can add value by helping to explain why engagement or purchasing rates are down, what would motivate customers to continue buying, and how to effectively launch new products. Furthermore, personalization is a long-standing desire with limited success in most companies – another CX opportunity.
In recent years, the job of sales professionals has changed dramatically due to buyer self-education via the internet and social media. Reps, when they do engage with buyers, must be better prepared. CX leaders could bring buyer research to the table to show what types of experiences are more likely to lead to closed deals. For example, AI-powered speech analytics can help analyze sales interactions to highlight improvement opportunities like reps talking too much or discussing pricing too early in the call.
Barry Trailer of Sales Mastery points out that some sales obstacles are outside of the direct control of sales professionals – like Byzantine contracts and overly aggressive lawyers that frustrate buyers and sellers alike. CX leaders could get support by sales leaders by tackling cross-organization issues that thwart deals.
Similarly, customer service/support organizations can get blamed for product and policy issues. Such as, according to Jeremy Watkin of outsourcer FCR, a policy of never giving a credit to customers. CX leaders could help the VP of customer service put a cost on this policy, making the case to give agents more flexibility.
Organizations are rife with problems, look for ways that CXM can help solve them!
Top Management Wants Numbers
Still, numbers matter, especially to senior executives. According to a Senior VP of Marketing of a large technology firm, “conjecture and anecdotes are not compelling.” It’s important to bring hard numbers plus customer quotes to drive action. In one case, the CX team surfaced a communications issue about changes in account ownership. The solution was developed by a cross-function team, with an estimate of costs and benefits supplemented with an analysis of verbatim comments.
Jack Dean, a former CFO now with sales consultancy FASTpartners, says CX investments generally have a more challenging financial case if the goal is revenue growth. A formal ROI analysis is easier with cost reduction, so he suggests starting there and then following with growth.
For growth-oriented firms, a CXM case that builds on increasing average order size or revenue per customer would be compelling to executives. On the other hand, an established, slower growing market leader may be more interested in customer retention. Either way, “executives aren’t looking for precision,” says Dean. They want to understand the assumptions and analysis, so they can make a good decision.
Canadian telecom provider TELUS built a business case based on cost and churn reduction. Costs were reduced by $1 million per year by replacing a collection of disparate VoC systems with one integrated platform. In addition, the technology upgrade enabled a doubling of feedback volume and more proactive follow-up to customer issues that will impact $10 million of customer churn.
In the retail industry, consultant Chris Petersen of Integrated Marketing Solutions sees a “host of metrics that could apply in showing the potential impact of customer experience on business outcomes.” For example:
- Improving conversion rates by optimizing online engagement
- Increase the size of market baskets (average order volume)
- Impact on customer lifetime value, at an individual or household level
- Reduction in returns in customer service
Peterson cautions that it’s not a simple matter of showing that a CX investment results in an immediate increase at the cash register. One technique that can shorten the internal sales cycle is a Proof of Concept to assess the impact of CX changes. For example, a large US electronics retailer changed its PC buying experience to require engagement with a sales associate. After some experimentation and employee training, they were able to increase sales of high-margin warranty services without negatively impacting customer satisfaction.
Support CX efforts with Committed Senior Executives Who are Personally Engaged
Simply put, there’s no substitute for senior leaders “walking the talk.” Jeffrey Puritt, CEO of TELUS International, explains: “I can’t expect my team to embrace an activity if I’m not willing to do it myself.” Each week he spends time listening to agent conversations and participates in discussions about “what we could have done better.” Sometimes it means a personal apology to show empathy for customer issues.
Lynn Hunsaker of ClearAction Continuum shares an example from a Suntrust executive: