Tag Archives: ROI

Are you wasting money on Customer Experience?

With 90% of CEO’s prioritising Customer Experience as a leading business practice(1), financial scrutiny on performance will only increase to retain board confidence and commitment. However, 90% of programmes are failing to deliver (2) their potential.

How can you be sure Customer Experience investment is correctly prioritised?

Most manuals and professional CX speakers would advise practioners to fix what’s upsetting customers and move on to making a point of distinction on what they rave about. Which should push up satisfaction and recommendation scores.

However, both these customer experience strategies require investment to succeed. What if there is no budget? Can you ‘hedge’ the required investment against incremental sales/profit this focus will deliver? It’s probably not that safe to do so. Evidence shows that only 1% of share of category can be reliably attributed back to these conventional measures (email me if you want more on why this is).

A more linear approach is to show the reduction in ‘bad demand’ operational costs associated with managing activities creating negative feedback on specific touchpoints. This would show an accountable reduction in costs. Albeit costs created by a bad customer experience in the first place. So should they be classed as a win, or an own goal? Either way, it’s a start.

This gives you the two more common strategies for CX growth pursued:

  1. Improve that which the business is poor at but customer’s value (also known as the ‘Fix’ phase)
  2. Leverage that which the business is good at and customer’s value (also known as ‘Build’ phase)

The shortfall here is that the hit list for these strategies rely on customer’s feeding back about what’s great and what’s not. But what if customers don’t vex about an issue? And why wouldn’t they –  because it’s not on their radar? What if there’s nothing wrong or right about an experience but because it’s not important to customers it never gets raised? With most VoC set ups if you don’t hear about it often it gets considered not worth looking at.

A conventional approach focuses on capturing feedback on customer’s sentiment and intention. But as proved on most voting days, intention and behaviour are often distant relatives. Whereas, understanding actual behaviour caused by Customer Experience is evidence of what customer’s do.

So rather than only asking how satisfied a customer is with an activity or experience, or which activities they are satisfied with or otherwise, understanding how important an activity is to a customer’s share of category commitment brings behavioural based measurement in to CX. Actual behaviour is a significantly more reliable indicator of decision making than intention.

This moves the focus from knowing some of what’s going on, to knowing everything

With fix and build programmes linked to CSAT and NPS inferred scores, there is a read on, ‘what we are good at and what we are not so good at’. By complimenting this with behavioural change insights we are now answering, ‘what customer experiences matters most to a customer’s decision to commit share of category’. This adds the missing commercial dimension to CX performance management and with it reveals two further CX strategies for practioners to pursue. As well as sharpen the purpose of the ‘Improve’ and ‘Leverage’ strategies too:

  1. Monitor and refine/remove CX which the business is poor at and does not impact customer’s decision to commit to us
  2. Improve CX which the business is poor at but impacts customer’s decision to commit to us
  3. Leverage CX which the business is good at impacts customer’s decision to commit to us
  4. Explore the potential in CX Opportunities which the business is good at but does not impact customer’s decision to commit to us

These are shown in Lexden’s MILO matrix below, which enables prioritisation of CX investment.

Lexden’s CX MILO Matrix

The ‘Monitor’ strategy identifies investment which is under-performing and not needed (or as the headline state where a company is ‘wasting money on CX’).

With conventional feedback this insight isn’t unearthed because it’s the customer experience that doesn’t matter to customers, so it rarely gets asked for or feedback provided – whether it’s good or bad. But if this collated less meaningful activity can be refined, reduced or removed and rationalised costs redeployed to the ‘Improve’ and ‘Leverage’ strategies.

Which leaves the ‘Opportunity’ strategy, which provides untapped potential for new areas to consider. These could provide future advantage in a maturing CX-led organisation if reshaped and made important to the customer’s decision making or outcomes fulfilment.

You may be questioning this only works if you know what activities matter in the first place, and their relative degree of importance. If you were starting from scratch that would take longer and cost more to work out than would be of use.

Fortunately, the missing golden insight is already available

Leading CX academic Dr Professor Phil Klaus developed a quality of experience measure which identifies which customer experiences impact customer’s behavioural decisions. In conjunction with Prof Klaus, we work with this leading edge CX insight measure, which means we can now add ‘behavioural change’ insight to existing NPS and CSAT measures to create the missing commercial rigour CX deserves.

With ten years and over 1,000 case studies complete, this award-winning insight informs companies on ‘what matters most’ and ‘what doesn’t matter at all’ when it comes to customer experiences impacting share of category decision making. By identifying the most important 25 customer attributes and experiences (refined from a total of 300), the ‘Experience Quality Measure’ accounts for up to 88% of a customer’s decision making. Making it the most reliable CX measurement available.

Each individual study completed highlights the specific set of activities and their relative importance for that company. No two outcomes are the same making it the unique CX DNA of a company. The principal advantages of this approach are as follows:

  • It doesn’t matter which CX measure you have in place already, or which VoC platform you use, we run a one-off separate study alongside what’s already in place.
  • The volume of customer contacts engaged to arrive at the experience measure is around 125, so it’s a much smaller study all round, than a VoC programme commitment
  • We are now into our third year working with the approach and translating the academic science into a more workable and accessible insight source for clients to prove profitability from CX
  • The measurement won’t shift overnight, because it’s based on actual behaviour change, not just opinion. So, we recommend capturing and tracking progress annually
  • Competitor data is also captured which means we also know 1) who else has your customer’s share of category and 2) what customer experiences attract your customers to them
  • This insight can be identified and the MILO matrix complete within 8 weeks

So, there you have it. The ability to identify what drives share of category rather than just favourable commentary.  The confidence to pull out from your plan those activities which matters least. The insight to keep ahead of your competition in CX. Which means CX leaders can demonstrate to budget holders that CX investment isn’t being wasted. In fact, with all four of the MILO strategies pursed it’s driving profitable growth.

If you’d be interested to see how it works with a case study or how easy it is to add this essential CX insight to the CX governance, please contact christopherbrooks@lexdengroup.com 

If you’d like to receive more of these, and other articles on driving more profitable Customer Experience, please sign up to our newsletter.

Lexden helps deliver effective customer experience insight, strategy and solutions for clients seeking sustainable profit from customer experience. If you’ve got a CX challenge, see if we can help.

(1) Bain (2) Dr Professor Phil Klaus
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Customers will never forget how a great branded experience made them feel

“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” – Maya Angelou (American poet, biographer and actress 1928-2014).

This sentiment has proved a useful yardstick when designing memorable customer experiences and compelling customer value propositions with clients. You know when you’ve got it right because customers state favouritism in feedback session such as, “I can’t quite express why I like them. They just seem to be in tune with what matters to me”.

brand heartHowever, measuring this emotional fulfillment is challenging. And I’d argue because it’s difficult to measure, it isn’t. Brands tend to be valued on awareness or share of market instead. Even if salience, relating to buyer memory structure, is on the brand dashboard it tends to be informed by recent promotions and the latest wave of advertising messaging. Businesses prefer to set their path by that which they can measure results against. Sadly a warm feeling inside because someone did something that left a lasting memory is not something a city analyst calculating brand equity will be able to make a company valuation on.

That said, customer experience does create an opportunity to deliver memorable engagements between customers and brands, which will remain in the consciousness for a while and the subconscious even longer.  And with measures such as NPS proving effective predictors of retention rates and profitability, it’s no wonder customer experience is seen as the next battlefield for differentiation.

Will it catch on? I think it will – I judged an awards last year where a market leading GI firm’s Commercial Director presented the case for CX as the reason their business fortunes had picked up.

So how do you deliver experiences or propositions which make customers ‘feel’ differently about a brand? For me it’s about three things:

  1. Understanding the situation your customer is in now
  2. Deciding how the better place you want them to be in feels like
  3. Devising how you get them there in a way that reinforces the nurtured values of your brand

Companies like Disney and Zappos do it naturally. For most it’s more of a commercially calculated decision, but that’s still okay. If the outcome makes the customer remember you favourably because of the way you made them feel, it’s a deeper connection than a 50% discount will ever achieve. As well as being a considerably more profitable one.

Here are a couple of examples which hopefully will leave a warm feeling inside and demonstrate how you can get massive cut through at very little cost by putting the customer’s feelings first.

Timpson’s & the unemployed

timpsonIf you’re out of work you can’t afford to be splashing out on dry cleaning. But at a job interview to rectify the situation, you want to give yourself the best possible chance of success. A freshly pressed dry cleaned suit or outfit can only help your cause and confidence. I’m not sure how they got there but this big hearted gesture from Timpson’s Dry Cleaners will live long in the memory of any out of work candidate who takes it up and lands that new job. As well attract applauds and a new customer or two in people like me acknowledging they don’t have to do this, but they do.

Ritz-Carlton & Joshi

This has almost become legend on the CX circuits but it’s worth rolling out a few more times yet. Having returned from a holiday at a Ritz-Carlton hotel in Florida, Reilly’s Dad realised that his young son had left his favourite soft toy Joshi the Giraffe behind. He called the hotel and they located it. Having found it the staff could have said they would ship it back at cost. But instead they had some fun and at the same time justified Joshi’s extended stay to Reilly. Joshi was returned with an album of memories from his time ranging from Spa treatments, to restaurant meals, pool time and more. Reilly, his parents and now millions of social media viewers have a warmer feeling about Ritz-Carlton than they did before.

joshi2 joshi1

It’s that simple. Start with a scenario which is relevant to your customer and devise the best outcome you can achieve. Then worry about how to make it happen. It’s amazing where it can take you and just how long it will last in the hearts and minds of your customers.

For more on brand impact of customer experience try this presentation made by Lexden in 2014 to the Financial Services Forum.

Posted by Christopher Brooks, Director, Lexden

Lexden is a Customer Strategy Agency | We put customers at the heart of the decision 

We work with brands to attract and retain happy customers | We achieve this by helping them to understand what makes their customers tick, building memorable customer experiences and creating engaging customer value propositions.

If you like what you’ve read please sign-up to ‘Putting Customers First’  for fresh insights. 

For further information contact christopherbrooks@lexdengroup.com or call us on M: +44 (0) 7968 316548 or T: +44 (0)1279 902205.  You can also follow us on LinkedIn, Facebook or Twitter or read client testimonials and case studies at www.lexdengroup.com.

How M.A.D. is your Customer Experience?

cx model

Is the ROI on your customer experience living up to its potential?

In our experience many CX programmes full short of what they should deliver largely because of the structure of the programme.  They end up Maintaining an acceptable customer experience or only occasionally delivering a real Advantage to customers and the business  but rarely achieving the ultimate ambition of reinforcing the Differentiation of the brand (or M.A.D. CX for short).

What does your CX working world look like?

If you find yourself knee deep in root cause analysis, customer mapping yet another page of exceptions, struggling to get MI produced at touch point level or explaining to the board why NPS has plateaued whilst CX investment has increased, then you are know your are a customer experience practioner.

But if this sounds familiar it may mean your customer experience programme has become more about maintaining a level of acceptable customer experience rather than striving for reinforcing brand differentiation.

Despite the business investing the resource, communicating the importance of customer centricity internally, delivering dozens of cost and time saving experience improvements and celebrating NPS increases, many CX programmes are not actually getting past ‘Level 1 – Maintain‘.

It’s reinforced by customers who believe only 8% of companies deliver a great customer experience whilst 80% of companies believe they do.

With this in mind, we’ve made it our mission to help brands revisit their approach and achieve the optimum potential of their CX endeavours.

At Lexden we’ve developed an independent check-point Customer Experience Effectiveness Audit to help brands committed to customers to understand where they are, how they got there, how much more they could achieve from CX and how to get on track to realise this.

We call it our M.A.D. CX Audit. It covers:

  • Identify which level your CX is at now and what’s keeping you there
  • Understand the business environment CX is operating in and the governance surrounding it
  • Identify how your employee’s and customer’s value your customer experience activities
  • Assess the commercial impact of customer experience improvements to date
  • Identify your journey comparative to your competitors, your senior stakeholders and your customer’s expectations
  • Identify the optimum level for customer experience within the organisation
  • Highlight activities requiring realignment (people, planning, partners, process, culture) to effectively support revised optimum level potential

It’s the perfect ‘light touch, high impact’ review to ensure your CX programme achieves the maximum ROI.

Or for more details of the service, please click here.

Posted by Christopher Brooks

Lexden is a Customer Strategy Agency | We put customers at the heart of the decision 

We work with brands to attract and retain happy customers | We achieve this by helping them to understand what makes their customers tick, building memorable customer experiences and creating engaging customer value propositions.

If you like what you’ve read sign-up to our ‘Putting Customers First’ newsletter. Or for further information contact christopherbrooks@lexdengroup.com or call us on M: +44 (0) 7968 316548.     You can also follow us on LinkedIn, Facebook or Twitter or read client case studies at www.lexdengroup.com