Deep Dive #6: ?? Aligning with Profit Pools: Are Customer Experience Strategies Missing the Mark?
Scott Weisbrod
Founder, Managing Director at Weisbrod&Co, Human-Centered Strategy and Design
Customer experience leaders traditionally approach transformation by focusing on touchpoints, journeys, and service interactions. However, do these efforts align with where value is created and captured? Without this alignment, even well-executed strategies risk delivering diminishing returns.
Kodak's experience with digital disruption offers a sobering lesson: While the photography profit pool expanded dramatically, the company optimized areas that no longer captured significant value, missing the shift to memory cards. Today's CX leaders face similar risks—potentially investing in optimizing experiences where profit pools are shrinking rather than emerging.
Why Profit Pools Are the Missing CX Link
Most CX frameworks emphasize customer satisfaction, loyalty, and journey optimization. While valuable, these frameworks can miss their mark without explicit connection to business growth. Without understanding profit pools, CX leaders risk:
Three Imperatives for CX Leaders
1. Map Profit Pools Before Designing Experiences
The traditional CX playbook begins with journey mapping and pain point identification. While useful, these tools are incomplete without understanding the business's financial backbone.
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2. Track Leading Indicators of Profit Pool Shifts
Profit pool shifts often stem from changing customer preferences, competitive dynamics, or technological advancement. CX leaders must anticipate rather than react to these shifts.
3. Design for Future Profit Pools, Not Just Current State
Improving experiences for today's customers in today's value pools risks leaving the business unprepared for tomorrow. Leading CX organizations anticipate where value will emerge and design accordingly.
From Touchpoints to Profit Points: Rethinking CX Metrics
Traditional CX metrics like Net Promoter Score (NPS) or Customer Satisfaction (CSAT) fail to capture profit pool alignment. Ensuring CX initiatives drive growth requires an integrated set of KPIs:
?? Takeaway for Leaders
Superior customer experiences in shrinking profit pools won't drive growth. CX leaders must align their strategies with value creation by mapping profit pools, tracking shifts early, and designing for the future. When executed effectively, CX transforms from a customer satisfaction tool into a strategic driver of business success.
I really like the "Profit Pool" metaphor. I'm imagining a journey over time, maybe even like a video game, where getting the hero through certain obstacles leads to a reward of some kind. A mutual reward between customer and company, ie. a true exchange of value. The role of the Product owner is to map those potential obstacles and pain points, fix the ones that they have control over, and acknowledge that there will be some external pain points over which the company has no direct control but can potentially design solutions or options depending on what happens at a particular stage of a journey. I've certainly mapped KPI's along various steps of a journey, eg. "Conversion rate", but I'm wondering if I've ever identified "Profit Pools" along a journey. Is there a direct correlation between where a customer perceives and experiences a moment of joy, and where the company profits? Probably not, methinks. They might not be directly aligned, but in looking at the big picture, the company might absorb a cost (eg calls to the call centre), but that results in customer satisfaction, so a year later that positive experience for the customer, which cost the company $100 at the time, results in customer loyalty.
Digital Strategy & Innovation | B2B Tech Sales | Growth & GTM Strategy | Account Management | Marketing | CX Transformation | Lean Six Sigma
1 个月Scott Weisbrod - What an insightful article. Your hypothesis on linking profit pools/emerging growth areas with CX initiatives and focusing on growth metrics such as CLTV makes perfect sense. As mentioned, treating CX/Customer service as a cost center is another major barrier. Take the example of chatbots, organizations primarily look at these tools from a cost-take-out lens and hastily deploy AI chatbots without proper training and optimization, leading to chatbots frustrating the end customers by not answering queries effectively. Organizations need to treat CX as a profit center and look at AI technologies from the lens of driving growth through personalized and consistent experiences.