Six Success Factors for Customer Experience Return on Investment

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A customer experience management (CEM) study seeking to understand what business-to-business companies are doing in this field examined what seems to be driving the strongest business results. For example, some companies attributed CEM to their financial progress, such as 200 percent increase in market share over the past four years or 20 percent improvement in revenue over the past year. Some companies mentioned figures such as 15 percent reduction in churn and so forth. Among the companies with strong business results, there were some that also had at least 20 percentage points advantage in most of the other best practices in the study. Six practices had strong correlations.

To illustrate, when managers of various customer experience (CX) activities coordinate their work by reporting to a single department or to a committee or executive, or meeting quarterly or more often for coordination purposes, their companies are at least 20 percentage points more likely to collect voice of the customer from all influencers in the purchase decision, to capture front line employees’ observations, and to capture customer complaints. There were also many other best practices that correlated with this coordination of communication among managers of CX activities. This implies that a more holistic CEM effort, and hence, a greater degree of customer experience excellence, tends to accompany each of these six success factors.

Success Factor 1: Coordination Among Managers of CEM Methods

The first success factor is coordination among managers of customer experience methods.

An interesting example is TW Telecom. When the economic downturn occurred, TW Telecom was in the midst of acquiring about 20,000 small and medium business accounts 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 did this by setting up a customer operations team comprised of people from strategy, operations, marketing and service, and it’s positioned as the company’s customer conscience. They have very vocal roles in the business units and help the company to evolve their CEM to a more organized, cross-functional mode that even adapts the company, itself, to the customers’ needs.

Other companies are doing work like this with customer champions in every business unit: Symantec and JD Uniphase are examples that come to mind. Others are coordinating managers of surveys, advisory boards, customer references, contact centers, loyalty, and so forth.

Success Factor 2: CEM is a Determinant of Corporate Strategy

The second success factor is viewing customer experience management (CEM) as a determinant of corporate strategy. When companies have this view, rather than viewing CEM as a sub-set of corporate strategy or irrelevant to it, these companies 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 and make sure that they could earn their clients’ trust. They reworked their enterprise guiding principles to focus on the client first and everything that they do in their business. They set out to change the way they include voice of the customer in their decision-making process. They migrated from a product focus to a client focus through a massive cultural change 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 changed the way they sought customer input and how every employee, regardless of their role, viewed their job. Essentially, they saw voice of the customer as a part of their larger business transformation and how they’re leading, using insights, prescribing action, holding people accountable, and communicating the value of keeping clients first. Despite the fact that only about one in five companies is using CX to determine corporate strategy, those who are, are reaping greater benefits.

Success Factor 3: Presentation of Survey Results to All Employees

The third success factor is presentation of survey results to all employees.

At Applied Materials, their decentralized culture and matrix organization structure caused them to create more than 50 reports of their customer surveys so that each business unit and every sales office and functional area across the company could see their own impact on CX. They also conducted “train the trainer” sessions through a video conference with the champions in each location, who then presented the results locally to ensure common interpretations, answer questions and discuss the implications. These presentations included an action-planning workshop to digest customer comments and make a difference for customers. מערכת אומניצנל

Success Factor 4: Calculation of Customer Lifetime Value

The fourth success factor is calculating customer lifetime value. There are many ways to do that – very thorough methods and other approaches to just create a number that is helpful. When companies do such calculations, they tend to have stronger business results and broader deployment of their CEM.

Citrix is a great example where they’ve mapped their customer contract values to the ratings for likelihood to recommend the brand. By setting up listening posts from brand awareness to brand advocacy, they’ve been able to gain valuable insights about the functionality that could have increased positive word of mouth and specific revenue lost or gained as a result. After product trials and contract periods, they asked, “What could we have done differently that could have led you to buy?” A customer insights team created a business case model that uses this data to help managers prioritize product changes, based on their impact on keeping customers, as well as acquiring new customers. Because this is a quantified approach that helps all of the internal stakeholders to make decisions, it has been embraced as a methodology that they use on a regular basis.

While few companies actually perform some type of customer lifetime value – generally about one in four or one in five companies – they see more 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.

 

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