What If Customer Experience Has No ROI? (Part 3)

Here’s the 3rd (and final) installment of What If Customer Experience Has No ROI?

You can download a .pdf of the entire article.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Tips For Making The Case With ROI

If you’re in a position where you have to make the case for customer experience based on business results and ROI, here are some recommendations to keep in mind.

  • Enlist your CFO. You may have the brightest business analysts in the world on your team, but if the CFO’s team is not involved then they’ll always question your financial models and assumptions.
  • Use existing metrics. Try to make your case based on the business metrics that the company already uses; it will make it easier for people to understand and will help you get their buy-in.
  • Be conservative. Resist the temptation to use the high-end of estimates for potential benefits. While the results may seem more compelling, they will also be harder to defend.
  • Create a simple story. People tend to remember very simple storylines, so make sure that you organize your results in a way that is very easy for people to understand.

Closing Thoughts On Customer Experience And ROI

I want to circle back around to the question that I posed in the title: What if customer experience has no ROI? If your customer experience improvements do not appear to have a positive ROI then you have three choices.

First of all, you can take a look at the model and assumptions that calculated the ROI and make sure you have fully captured the long-term benefits of increased customer loyalty. The next option is to refine your approach to customer experience; making sure that you are investing in the areas with the highest business impact. Finally, if you still can’t see any ROI, then don’t invest in customer experience initiatives.

Customer experience is not an altruistic endeavor; executive teams should focus on it because they believe that it will help their organization’s long-term business results.

The bottom line: Improving customer experience is (often) good business

About Bruce Temkin, CCXP
I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about these topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

6 Responses to What If Customer Experience Has No ROI? (Part 3)

  1. KoolaidAntidote says:

    The question seems a bit silly to me. Every brand, product or service, is an experience. And every interaction you have with that product or service is part of that experience. Brands that provide the best experiences end up as winners in their category. And brands that provide bad experiences? They go out of business e.g. ROI=0

    Brand marketers should always be asking themselves: “how can I create a better experience for my customers”? That experience isn’t limited to the sales associate, call center, or a CRM program.

  2. Harry Klein says:

    KoolaidAntidoe – this is anything but a silly question. Your example is quite correct – enough bad customer experiences and you close your doors. But another path to oblivion is investing in customer experience without have some idea of what it gets you.

    Customer experiences must match the level of importance/value/meaning of each of the specific interactions that comprise experience throughout the customer life cycle. “Wow” experiences are NOT always required, in fact they might be viewed as wasteful by the customer. It’s a marketers job to determine what level of experience is appropriate for each step of the customer life cycle and how to deliver it.

  3. @Harry Klein The trick is to find out what attributes of Customer Experience customers value, and how to estimate net financial impact of their delivery. There are some interesting methodologies around.

  4. Mark Wagner says:

    Gregory-what methodologies of customer experience value measurement are you speaking of, or that you find interesting? I have researched the topic for a while now and am still struggling with an approach. It doesn’t seem that anyone has truly figured it out.

  5. While I agree that every company could benefit from customer experience initiatives, I also agree with Harry, the reason Bruce’s question is important is that your intentions are critical to the success of your customer experience initiatives. When companies blindly invest in customer experience management to address customer service issues or merely because it is an emerging market their ROI potential will be minimal. Customer experience improvements may start as an initiative and done right it will have it’s rewards. However, to reach your ROI full potentiality requires examination of your corporate environment and a broader transformation, sounds daunting but it does not have to be.

    I recently interviewed Adobe’s Ben Watson on behalf of Clienteer to share insights on their customer experience transformation for their enterprise business. In this interview Ben shares how they addressed ROI and what measures they are using. Here is a link to the interview http://ow.ly/2d6nh

  6. raybrown99 says:

    @Dawna I’ve watched Ben’s interview and I think the key point is that every business is different. Managing customer experience is vital in today’s ever more connected world. If you don’t get it right then a competitor surely will. As with anything in business you need a vision of what you’re trying to create and the appropriate investment of time/money/staff etc to make it happen. If there is no added value or RIO in your vision then why begin ? Progress towards the vision is the measure of the planned ROI.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: