Customer experience is becoming the new currency of business success. If you make quality of experience the centerpiece of your customer relationship management (CRM) strategy, you will be creating a sustainable business asset of substantial value.
Customer experience has qualitative and quantitative returns, as I will discuss next month at Forrester’s Business Process (BP) Forum. For a detailed discussion of customer experience optimization, also take a look at this recent Forrester report that I authored. You can measure the qualitative business return on customer experience in, dare I say it, love. Hopefully, your customers love the multichannel experience you provide, and, as a consequence, seek to deepen and extend the relationship. The concomitant of that is the quantitative return, summed up by a single word: money. If you’re making customers happy, hopefully that translates into sales, profits, renewals, referrals, and other bottom-line boosts.
That’s all well and good, but how can you directly translate love — i.e., quality of experience — into money, measure the impact, and calculate the return on your investment in experience-boosting technologies?
CRM next best action platforms are the key to realizing this promise. CRM next best action environments shape experience through embedded analytics that guide all interactions and offers across all customer-facing channels, processes, and roles. In addition to predictive analytics and business rules management systems, enterprises often incorporate into their next best action initiatives such experience-boosting investments in decision automation, sentiment analysis, conversation management, dynamic case management, knowledge management, and social networking.
The next best experience should be the one you deliver to a customer who is delighted by your apparently seamless ability to deliver continuous satisfaction within the context of their unique needs and preferences. In addition to targeting offers and improving customer loyalty, CRM professionals should be using next best action technologies for proactive satisfaction initiatives. For example, many companies use this technology to identify burning issues and automatically escalate them to customer service reps that can respond to issues and defuse them before they become showstoppers.
How do you measure quality of experience? Customers may articulate it crisply in words, but don’t count on it. Often, they express quality of experience through their actions. Here are some indicators, in terms of concrete words and deeds that that you can measure to gauge the bottom line impact of your CRM next best action initiative:
- Do customers find it satisfying enough to stay in the relationship?
- Are they renewing, extending, and deepening the relationship because you offer new ways for them to satisfy themselves?
- Are they enjoying the relationship enough to tell the world, or at least their friends and family, about the value they’re receiving?
- Do they respond and accept new offers rapidly?
- Do they visit one or more of your channels frequently?
- Are they able to find and purchase what they need rapidly through your channels?
- Are they recommending and influencing other people to become customers, stay with you, and/or extend and deepen their relationships with you?
Many of these indicators have a strong direct or indirect impact, aka “lift,” on customer lifetime value (CLV). But this isn’t cheap. To the extent that you attempt to achieve marginal gains in quality of experience through costly investments in new technologies, you may be adding to your overhead and thereby eating into your ROI. Your costs will also increase as you recruit and cultivate the requisite customer experience “domain experts” to maintain the data structures, statistical/predictive models, deterministic business rules, and other “decision logic” needed to power all of these components of a next best action initiative.
I look forward to hearing what you have to say about this. Please respond to this blog and come to my session in Boston on September 23.