Recently, I wrote a post arguing that $ is the one CX metric that matters to executives. The obvious conclusion: You need to design your CX measurement program to track and report $.
If you haven’t done that already, you should jump on it today. As I write this post in December of 2019, corporate budgets for 2020 are fully baked at most companies. So if you haven’t cemented executive support by proving that CX grows revenue and proving that CX cuts costs at your company, there’s a good chance that flat budgets (or worse) are already locked in for your CX program. That means you’re already fighting a battle against time to reverse that trend for next year. And if you don’t, things can always get worse.
To help guide your efforts, I’m going to pass along a tool that I’ve found to be extremely helpful as a North Star for CX measurement programs, prioritization decisions, and ROI models. It’s the one-sentence business case, which was taught to me over a decade ago by an analyst in Forrester’s Total Economic Impact™ (TEI) team. Your CX measurement program should be designed to fill in the blanks of that single, critical sentence.
The Most Common Mistake When Asking For Funding
Why do you need a formula for asking executives to fund CX improvement projects? It’s because when CX professionals ask for money, they all typically make the same mistake: They first ask for money and then (maybe) promise a benefit; instead, they should first promise a benefit and only then ask for money.
Do This Instead: The One-Sentence Business Case
Here is the magic formula. It wasn’t invented for CX projects, but it fits them beautifully:
- We propose to do A . . .
- to improve B . . .
- which will bring us economic benefit C . . .
- at a cost of D.
- We propose to redesign our B2B customer service portal . . .
- to make it easier for our clients to fix their own tech problems . . .
- which will save us $50 million per year by avoiding road trips by our tech support teams . . .
- at a cost of $1.5 million.
You may be thinking: “$50M per year at a cost of $1.5M? That’s an ROI of over 3,200% in the first year after completion of the project! I don’t believe that.” Well, you should believe it, because I actually reduced the benefit from a real example of something a large tech company did — I thought the vendor’s real numbers would be too unbelievable.
What does this mean for CX measurement? As I wrote recently, your CX measurement program should quantify the economic benefit associated with different levels of customer experience. Specifically, you should be measuring how much more your happier customers are worth based on their likelihood to stay with you longer and to buy additional products and services from you. Your measurement program should also connect survey responses to customer relationship management (CRM) data on a customer-by-customer basis so you can quantify how much less your best customers cost to serve due to their having fewer problems for you to remediate.
So when you’re wrestling with questions about how to build your voice-of-the-customer program and your CX metrics architecture, keep asking yourself whether you’re creating something that will give you the data you need to fill in the one-sentence business case for every project you do.
Build a solid financial business case for CX at your firm with Capturing The ROI of CX, a complimentary step-by-step guide and ROI calculator.