Customer experience program success: Engaging minds and wallets

Author — Dayton Semerjian

In my previous blog, Keys to a successful CX program: Building teams and engaging hearts, I made the case that to establish your customer experience program you need to communicate an emotional case for change.

Having convinced your organization that your change is the right thing to do, you need to back up your case with data — that is, if you want funding.

Engage the minds

To get funding, and keep it in the face of competing internal priorities, you need to build a bulletproof financial case for change. It will take some time to collect and analyze industry and company data, but doing so is crucial to secure a long term financial commitment to your CX initiative.

It took more than a year to complete a clear, fact-based and analytically rigorous business case at CA, but that investment of time was well worth the effort. Our business case was so compelling that our customer experience initiative has been embraced by our executive team and across the company. A good sign that folks are aligned is that I have been asked to stop “making the case” for why we must improve CX and instead be prescriptive as to what should be done next and by whom.

A few of the critical elements to engage the minds include:

• Understanding the differential values of customers based on customer loyalty. We demonstrate that a customer’s propensity to purchase is closely correlated to their likelihood to recommend (LTR and their Net Promoter classification). Promoters, Passives and Detractors and non-respondents are Net Promoter System categories for customers that are based on the LTR scores or lack thereof.
• Understanding the relationship between Net Promoter Scores and economic performance. Our research showed that in our industry, higher levels of NPS and customer sentiment correlated positively with higher revenue growth rates. That same relationship held true with our customers as well. Once we understood the relationship of NPS scores to revenue growth, we were then able to establish the economic value of a one point increase in NPS scores to price per share and market capitalization. Establishing a clear relationship between improving the customer experience, improving Net Promoter Scores and improving economic results will help to bulletproof your business case.
• Understanding the operational drivers that move the NPS needle. This information will help you determine where to start making investments and deciding what levers to pull to impact LTR, NPS and revenue.
• Understanding the differential value in business relationship status. Our data showed a large NPS point spread between customers that felt they had a transactional product relationship with us and those that felt they had a strategic relationship with us. We were able to determine what customers viewed as the key drivers of strategic relationships and put programs in place to act on those drivers.

Engage the wallets

So far, you have been getting the executives on board and aligned. You delivered an emotional case for change and a bulletproof financial case for change. You have engaged the hearts. You have engaged the minds. Now it is time to engage the wallets.

How do you connect compensation and desired behavior change in the organization? I originally thought it made sense to connect compensation directly to Net Promoter Scores. Let me save you some time. When you are just beginning to stand up your customer experience and NPS program, it does not.

How you align compensation with desired behavioral changes over time is based upon the maturity of your CX program.

If you are just starting out, I suggest tying compensation to the activities involved with establishing your program foundation. These activities include setting up your technical platform, gathering data on a broad sample of customers and implementing the critical closed-loop follow-up process so key to the NPS system.

Compensate changes in customer experience-related behaviour

Once your program’s foundation has been laid, I recommend tying compensation to changes in behaviour as measured by the core drivers that you have previously determined can move the NPS needle.

For example, you may determine that product quality, support turnaround times and account management are drivers related to a customer’s likelihood to recommend. In a maturing program, you should understand the behaviors that impact those core drivers and therefore the customers’ LTR scores.

In our organization, we use lean six-sigma tools and methods to drill down to isolate the sub-drivers which we then prioritize based upon NPS impact and return on investment. In doing so, we understood that Support was a strong driver of customer sentiment and the sub-driver of speed at which Support issues were closed was particularly important to our customers. We made a decision to tie compensation in the Support organization to Mean-Time-To-Resolution (MTTR). As a result, not only did Support-related metrics improve, but our NPS scores also rose as did the customer’s perception of Support.

More to come

This blog is the second in a series that will continue with more keys to success for establishing a CX program based on the content of my Medallia Experience 2016 presentation. We’ve covered what I call foundational or mandatory moves. To come are the advanced, and then sustaining moves. If you can’t wait, you can watch this video of the entire session.

What are your keys to establishing a customer experience program?

@DaytonSemerjian

Originally published at blogs.ca.com on August 3, 2016.