Link True Financial Value to Experience Management
As a discipline, Experience Management — the experiences of customers, employees, partners, brand — creates a fundamental shift in the way organizations think and work. One of those shifts is the realization that employees and customers are the ultimate source of value. Defining success for your experience discipline takes more than the voice of the customer and metrics. It requires linkage to true financial impacts. Think about it – what do your executives and leaders care about? Revenue, costs and profitability.
Meanwhile, experience management professionals report on metrics and correlations. While you can correlate metrics (like CSAT, NPS etc.) to revenue, it doesn’t directly demonstrate specific financial impact. Your Experience projects and programs cause financial impact for both employees and customers. For example, did you improve productivity of employees? Reduce cost of acquisition through referrals? Increase sales opportunities? Reduce calls to your support centers? Reduce time to contract?
So how can you modify your approach to link true financial value to experience management?
Link to the executive’s questions about customers and their goals. Do you know what questions leaders have? “Why do customers choose us, why did they leave us, what are they saying about us, what’s the impact of those activities on our success?” Do you know the measures each of the business units is trying to accomplish? Knowing those goals and linking your projects to those goals to show financial impact will gain traction and support for experience management. This is the basis for creating both customer and business value and generating positive financial results.
Meet with the CFO. Gain alignment with your CFO/Finance team. Find out the framework your organization uses to value changes. Ask for help in building a model for identifying and putting value against changes in experiences.
Demonstrate employee experience creates value too. Partner with your HR team to identify potential financial value for changes to the employee experience. For example, cost of attrition, productivity etc. Look at the employee experience with journey mapping to identify where and when you can impact the experience for benefits. If you are making a change to the customer experience, you can bet there are benefits for the employee as well.
Connect the dots for additive financial impact. Speaking of journey mapping, try including a swim lane in your mapping for financial impact (a great way to get started is to try asking “what is the financial impact of this current or future experience to the organization”). With an extended view of the experience impact across the journey, you can create additive business cases which include multiple financial impacts. For example, one company I worked with optimized their Request for Proposal approach by consolidating knowledge systems, capturing tribal knowledge, created a virtual RFP Rapid Response team and created an online working collaboration site rather than using email. The results were reduced systems costs, increase productivity, and a higher win rate – all reflected in revenue and cost numbers. We shared those numbers with positive feedback from employees and customers as well as positive metrics on NPS, Effort Score and Likelihood to continue business.
Have a value plan and work the value plan. Clearly define how you will help the organization achieve its goals. Map every one of your activities or projects to your brand’s strategic goals. Our role as experience professionals is to helicopter up and oversee direct, orchestrate and facilitate how the organization views the customer, each other, the brand, and everything they must do to drive improvement. Define the story you want to tell a year from now. How will you leverage the data, how will it provide value to the organization, what changes will it drive and how will you measure it in financial terms?
One last note about value creation; think about the outcomes your customers and employees are seeking. Are you saving them time and effort? Keeping the element of value — for customers and the organization — can help you focus on driving intentional action and linkage to financial results.
About the Author
With over 25 years of Customer Experience leadership with brands like AT&T and Sysco, Diane Magers has led transformations to embed customer and employee engagement with definable business benefit. She is currently interim CEO for the Customer Experience Professionals Association, and founder of Customer Experience Catalysts, a customer experience excellence consultancy. She holds an MS in Psychology and an MBA. She is a Certified Customer Experience Professional (CCXP), a CXPA CX Expert, and NPS, Voice of Customer and Customer Experience Management certified.
Follow Diane @DianeMagers
This article is an excerpt from our new eBook Build a Better Customer Experience available here.