Once we have developed our offering, found customers and gained a little time to spend our hard-earned revenues, we might be tempted to sit back and wait for the good times to roll.
But we can’t. Our competitors are innovating, start-ups are starting, and our customers are getting more demanding.
In the early days of internet retail, there was a wild hope that customers didn’t need service. That automation would lead to perfect execution, every time. That wasn’t to be, not least because humans don’t tend to behave in the same way and certainly don’t have the same needs and preferences. With time, customer service has become commonplace. Even if you have to search to find it on some retailers’ sites.
While automation doesn’t automatically delight our customers, it does let us record data. And we can use that data to understand our customers’ experience. From there, it should be a short step to customer delight.
But. Yes, there had to be a but. If we want to make changes in our business we have to show that improving the customer experience will generate a return on investment. And that is hard. Some organisations, in some situations, will accept the justification – ‘it will make our customers happier’. A few more will bank on an ‘avoidance of pain’ rationale. However, the holy grail of business cases is that it ‘generates revenue’.
How to build a business case for improving the customer experience
Forrester* regularly produces an analysis of the relationship between customer experience and financial performance. However, it demonstrates no causal link. You may be able to use it to tell a story. But you won’t be able to calculate a Net Present Value for investment.
You need your own data. Say you raised customer satisfaction 15 points by changing your online sales process or by improving your B2B delivery performance. You can seek out the financial benefits and read them across to new initiatives. In the first example, you might be able to show an increase in revenue. In the B2B example, you may have won a new order or prevented the cancellation of your current contract. The trick is showing the same will be true of future improvements.
When revenue generation falls over many are tempted by the ‘avoidance of pain’ rationale. While potentially saving money is a great way of justifying an expenditure, you have to stop spending money. Realising the benefits of a customer satisfaction project is a project in its own right.
In short order we slip back to ‘our customers will be happier’. It seems that customer experience management may be one of the basic requirements of a business. Could it be just like email, a PMO, parking, team building? I.E. something that we know is right but cannot justify?
Logic, culture and experience
An arm waving ‘it is better to have happy customers’ argument won’t wash. Nor will anecdotes. We have to use logic, culture and experience.
I worked in a business where a certain type of customer issue was accepted as the norm. Until the CEO experienced it personally. Then it became enemy number one.
Blend industry data and your data to show that losing custom loses money. Don’t stretch a point. Don’t make leaps of faith. Don’t expect people whose bonuses are paid on firm results to invest in vague promises.
Use nice solid facts like:
- the cost of recruiting new customers
- how much each customer is worth after their first purchase
- whether subscription customers renew
- and how many people take the free trial, rate it poorly and run.
Keep facts about customers up front and fresh. And don’t hide the bad news. Share churn statistics and calculate the cost of customer recruitment. Show your performance stats – be it delivery, quality or cost. List the money saving, service enhancing ideas generated from customer feedback.
But my personal favourite is embedding the customer into development. When you are building a website, do your research. Work out what you like, what your competitors are doing and what your customer demographic is thinking. When you are developing a product, do your research. Look at feedback, assess your product objectively and try to break it. When you are changing your business tools and processes, ask what impact they have on the customer today and how you can improve the customer’s experience. I like getting customer satisfaction for free.
Another way of expressing experience is ‘show don’t tell’.
Take your seniors through a typical customer journey. Get them to buy from your website or make a cup of tea with your newest kettle. Help them feel what a customer feels
Highlight poor customer experiences with examples and the voice of the customer.
Go wild when you use the voice of the customer. Read out verbatim comments from reviews, customer reports and surveys. Use videos.
Employ a ‘measles’ chart to highlight a range of issues.
Back it up with generic data – see the sources for some ideas.
Even better use your own data to illustrate the costs and opportunities of your customer experience.
*Forrester is a highly influential research and advisory firm.
Hands up I haven’t read Forrester’s report – here is a link, but you have to be a member to see it:
I have read many reviews of the report, here are the ones I found most useful:
Some useful sources of data and logic to support your business case