Thursday, April 9, 2015

Digital Master Tuning #72: How to Convince the Value of Customer Experience to C-Level

Convince Top Management the value of Customer Experience with both “Hard Data” and soft touch.
Although being customer-centric is at the top agenda of every forward-thinking organization, very few companies can walk the talk from top-down, to both digitalize every touch point of customer experience, and quantify its value. Do they intentionally lose customers, and what’re the best practices for catching C-levels’ attention and improving customer experience? From digital transformation perspective, have you put Customer Experience as one of the key components in your business strategy?

Quantifying the value is very possible with the right data. Being able to segment data easily to see what the key drivers are for the customer base as a whole, or for those with a particular product or as part of a certain demographic segment should all be possible. For example, using NPS, it is essential rather than optional that companies track how much Promoter, Passive and Detractor segments are worth - what their average spend is, what their actual spend is year on year and so on. By then focusing on the areas of service that resonate most with Promoters (based on their feedback), and then monitoring the outcomes to be sure of the hypothesised financial uplift. Of course all this takes place in the context that if an improvement costs more to implement than it likely benefits. Customer experience isn't about improving things for the customer at any cost. It's about having the real insight to make confident business decisions that result in unambiguous ROI.

Convincing Top Management with both “Hard Data” and soft touch: C-levels don't intentionally drive customers away to save money. The problem is that they are too far away from the actual customer experience to make informed decisions. Instead, they rely on oversimplified dashboards, specious KPIs and blind trust, all of which drive decisions that ironically deliver the exact opposite result. For example, revenues are down again. Dashboards show customers are moving to the competition. Must be time to build a better widget, but how to fund it? Cut staffing expense, of course. The smaller, underpaid, less competent organization makes the customer experience even worse. Repeat. Game over. In reality, more often revenues were down because the customer service team was alienating customers with horrific service due to understaffing, poor training and bad management. Since there was no meaningful customer experience data, it didn't show up on the CXO’s dashboard and so s/he didn't even consider that investing to grow and improve this area was the right move. Does top management need further convincing for the value of Customer Experience? Take them to observe the different kinds of positive human interactions that help reinforce their brand. The details comprise the customer's experience. Every interaction matters. And none of it shows up on the CXO's dashboard where CX is typically very narrowly defined and oversimplified. There are different ways to try it as well: CXOs picking calls from customers in Call Center, creating different roles and bodies to represent the customers within the organization, etc., but in the end, it's all about convincing the top management.

The solution needs to be both systematic and tailored: First, define "customer experience" for your organization. Customer experience is the key differentiator and an important strategy for long term profitability. And top management is usually sensitive to sound of money. So, the one million dollar question : how can you quantify the financial value of better customer service? Make sure it covers all prospect and customer touch points (including online interaction). Second, identify tangible measurements. Third, design creative ways to collect the information which must go beyond typical electronic surveys. That means management boots on the ground from time to time. Last but not least, review the data, analyze it and challenge it. Most importantly, act on it in order to create human connections with prospects and existing customers.

Customer experience is being a main driver for differentiation and in the end profitability. But proving it is a different matter. So the key drivers can often be identified, and if improvement in these areas leads to demonstrable financial impact, a lot of companies consider that to be at least "good enough." Either quantify the value of customer experience or qualify the management effort, keep the end in mind, the end is to delight customers and improve business prosperity and brand for the long term.  

Digitalization is like a flywheel, and Digital Masters are the one riding above it. Surf more Information about Digital Master:
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