How to Value Customer Experience Improvement?
In today's world of cost pressure, the hard dollars associated with improvement projects are often taken "to the bank". However, the softer saving or difficult to measure items are often heavily discounted. One such example is "How do organizations value an improvement in the customer experience?". I have now asked several consultants this question and it appears that measuring this variable is both quite difficult and abstract. Intuitive related benefits, such as better customer retention or a price premium make perfect sense, but how to value these (with a dollar value) if our customer experience is improving. Of course, we have to assume that we have not irritated the customer with a basic tenet such such as a short shipment or failing on a promise. Given that an organization has not missed on the basics, how do you value a rise in a customer experience rating of let's say 3 to 4 on a 5 point scale? I am interested in your opinions.
Executive Head of Customer Experience at The Related Companies
9 年Hi Chris. You are quite right, valuating the quality of the customer experience is the holy grail of the entire customer experience "crowd." I have had much success with Evidence Based Impact [EBI]. It is a structured way of quantifying the customer experience by contrasting historical behavior with evolved interactions. It is still not ROI, but it does provide workable, financial information that I have had clients use when addressing the analysts to solid reaction. The process is structured storytelling, which is very simple to do and usually incorporates the collaboration of the team, which provide greater employee engagement as a bonus. I look forward to your posts, always so thought provoking.
Sales, Service & Ops Leader
9 年Great topic, Chris! In my view it is tough to associate a dollar value at an aggregate level, although this may just be the thing organizations need today to stop seeing certain activities/ departments as cost centres. Unless the improved CX can be directly linked to a repurchase/renewal decision or a WoM that converted to an actual sale, it is hard to put a dollar sign on it. On the other hand, if the increase in CX did not result in an increase in market share or share of wallet, then it may have come at an unnecessary cost. I recently read an article published by the Temkin group, on the same- they claim to have 'cracked the code' on the RoI of CX. You may want to 'google it'.