Topic: 5 Success Factors for Customer Experience Return on Investment
A Customer experience management (CEM) study aimed at understanding what B2B companies are doing in this field looked at what appears to be driving the strongest business results. Some companies, for example, have attributed CEM to their financial success, such as a 200 percent increase in market share over the last four years or a 20 percent increase in revenue over the last year. Some companies mentioned figures like 15% churn reduction and so on. Among the companies with strong business results, some had at least a 20% advantage in the majority of the other best practices in the study. Six practices had significant correlations.
For example, when managers of various customer experience (CX) activities coordinate their work by reporting to a single department or to a committee or executive, or by meeting quarterly or more frequently for coordination purposes, their companies are at least 20% more likely to collect the voice of the customer from all influencers in the purchase decision, to capture front line employees' observations, and to capture customer complaints. There were numerous other best practices that were associated with this coordination of communication among CX managers. This implies that a more comprehensive CEM effort, and thus a higher level of customer experience excellence, tends to be associated with each of these six success factors.
Success Factor 1: Coordination Among Managers of CEM Methods
The first success factor is coordination of customer experience methods among managers.
TW Telecom is an intriguing example. TW Telecom was in the midst of acquiring approximately 20,000 small and medium business accounts when the economic downturn occurred, and yet they were able to reduce churn by 27 percent and outperform their competition by 20 percent in most of their customer management processes. They accomplished this by establishing a customer operations team comprised of people from strategy, operations, marketing, and service, and it serves as the company's customer conscience. They play prominent roles in the business units and assist the company in evolving their CEM to a more organized, cross-functional mode that even adapts the company to the needs of the customers.
Success Factor 2: CEM is a Determinant of Corporate Strategy
The second success factor is recognizing customer experience management (CEM) as a corporate strategy determinant. Companies that take this approach, rather than viewing CEM as a subset of corporate strategy or as irrelevant to it, tend to have stronger business results and more comprehensive CEM.
During the economic downturn, SunTrust realized it needed to go back to the drawing board in order to earn the trust of its clients. They reworked their enterprise guiding principles to prioritize the client over everything else in their business. They set out to change the way they incorporate customer feedback into their decision-making process. They transitioned from a product-centric to a client-centric mindset through a massive cultural shift that included people asking in meetings, "Do we believe X because we've been bankers for so many years or because the clients told us?" This altered how they sought customer feedback and how every employee, regardless of role, viewed their job.
Success Factor 3: Presentation of Survey Results to All Employees
The presentation of survey results to all employees is the third success factor.
Applied Materials' decentralized culture and matrix organizational structure led to the creation of more than 50 customer survey reports, allowing each business unit, sales office, and functional area across the company to see their own impact on CX. They also held "train the trainer" sessions with champions in each location via video conference, who then presented the results locally to ensure common interpretations, answer questions, and discuss the implications. These presentations included an action-planning workshop to help customers digest their feedback and make a difference.
Success Factor 4: Calculation of Customer Lifetime Value
Calculating customer lifetime value is the fourth success factor. There are numerous approaches to this, including very thorough methods as well as methods that simply generate a useful number. When companies perform such calculations, their business results improve and their CEM deployment expands.
Citrix is a great example of how they've mapped their customer contract values to likelihood to recommend the brand ratings. They were able to gain valuable insights about the functionality that could have increased positive word of mouth and specific revenue lost or gained by setting up listening posts from brand awareness to brand advocacy. Following product trials and contract periods, they inquired, "What could we have done differently to entice you to buy?" A customer insights team developed a business case model that uses this data to help managers prioritize product changes based on their impact on customer retention and acquisition. Because this is a quantifiable approach that assists all internal stakeholders in making decisions, it has been adopted as a regular methodology.
While only about one in four or one in five companies actually perform some type of customer lifetime value analysis, they see greater success in establishing a single view of the customer across the company, using customer feedback to guide their annual operating plan, and many other CEM practices that go hand in hand with this one.
Success Factor 5: Action on Survey Results by Owners of Key CX Drivers
The fifth area of customer success is owners of key drivers of customer experience acting on survey results. Companies that do this not only have better business results, but also take a more holistic approach to CEM.
LexisNexis is one example. They have undertaken a number of voice of the customer initiatives, including a spontaneous customer feedback opportunity in which customers could e-mail their concerns immediately, and a CEM routed those messages internally and thanked the customer, whether the feedback was positive or negative. People who received these were expected to improve and provide feedback that could be shared with the customers. Furthermore, when a regular survey is conducted on an ongoing basis at a LexisNexis division, the company has a closed-loop process in which managers must contact the customers directly. Many back office employees were initially uncomfortable with this, but as they began to do it, they realized that this entire process not only brings the voice of the customer to life, but it also inspires their own action to make improvements. As a result, they are seeing better business results as a result of this approach.
In summary, the success factors for CEM include:
1. Coordination of CEM across the people in charge of the various CX activities in the company.
2. Making customer experience a key component of your corporate strategy rather than an afterthought.
3. Distributing the results of your customer satisfaction surveys to all employees
4. Making use of customer lifetime value.
5. Expecting all employees, particularly those in charge of the key CX drivers, to take action on customer surveys.
6. Cross-functional collaboration to improve customer experience.
AndyEdge is a Customer Experience organization [https://www.andyedge.com/customer-experience]. Specialties include customer value prioritization, touch-points, loyalty behaviors, internal branding, experience innovation, experience panorama, survey ROI, marketing and customer relationship skill-building, team recognition, motivation and perception assessments, predictive dashboards.
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