The ROI of CX - Part 2: Australian Stories

Customer Experience (CX) is increasingly recognised as a critical differentiator in the marketplace. For businesses aiming to drive significant results, understanding the nexus between customer experience and business value is imperative.

This 3-part article aims to understand that nexus through a quick look at the research (Part 1), a summary of three case studies I heard at the Customer 360 Symposium in March 2024 (in this Part 2) before looking at the seven essential steps to showcase how CX improvements translate into measurable business returns (in Part 3).

In late March 2024, I attended the Customer 360 Symposium, sponsored by companies like Material , Qualtrics , Medallia , InMoment , NICE , Acquia and Braze .

This two-day conference features presentations from numerous Australian companies who had successfully linked customer experience (CX) enhancements to tangible business metrics. From the many amazing presentation, I've selected three to highlight here as they provide practical insights into the strategic integration of CX initiatives with broader business goals, along with effective strategies for securing executive buy-in and addressing longstanding customer service challenges.

Think Customer – Demonstrating Value from CX Transformation

Presentation by Tom Bradley , GM Customer Experience, Kmart

Kmart Australia Limited is a leading value-orientated retailer in Australia. To understand the role of CX in business success, Kmart collaborated with Strativity APAC to analyse their Net Promoter Score (NPS) data. This analysis uncovered a direct correlation between high NPS scores and increased customer spending, providing a clear financial perspective on the value of customer satisfaction.

“We could go to the MD and say ‘NPS is more important than you though’.? We can show you, down to the dollar, where it adds value. Connecting NPS to value was a real unlock.”

The company then did a driver analysis on what made the NPS move. This allowed them to identify and prioritise the most important factors:

1. Product availability.
2. Service experience and interacting with staff
3. Checkout and exit experience

“Making sure product was available was more important than having someone smile at you or a shorter checkout.”

Armed with this data, Kmart could effectively communicate the business impact of CX to its executives, securing necessary buy-in for bringing together a cross functional team and making targeted investments focused on enhancing customer service and product availability.

One of the first steps was to assemble a unified team to enhance the impact of customer insights. The integration involved merging disparate research and Voice of the Customer (VoC) functions into a cohesive group. This unified team also brought together customer service and service designers from various business units.

• Previously, Kmart's customer, marketing, and online analytics were fragmented. By centralizing these functions, the company could leverage its strong research capabilities more effectively, which previously got diluted when crossing into analytics.
• Similarly, the customer service function, though well-run, was underutilized. By carving out and elevating this group into the CX design team, Kmart created a balanced mix of individuals who not only understood the business intricacies but were also adept at designing services.

However, merely bringing these functions was not sufficient. In addition, Kmart's CX team shifted from a passive approach of delivering reports and insights to actively embedding the customer perspective at the heart of decision-making processes. This positioned the Customer Experience team on equal footing with traditional core functions like Operations and Finance, thereby ensuring that customer insights factored into business strategies directly.

Cross-team collaboration was essential to success. One example given was where Operations played the lead role in delivering that most crucial element to customer satisfaction: ensuring product availability. The did this by deploying robots in stores for accurate stock checks and replenishment.

"These operational enhancements, more than anything, improved NPS."

In the end, by improving stock availability and making other CX investments, Kmart improved the shopping experience across both digital and physical platforms. These initiatives not only addressed key customer pain points but also strengthened Kmart’s overall market position.?

Leveraging Customer Insights to Uncover Growth Opportunities and Drive Business-Wide Change

Presentation by Candice Liew GAICD , Head of Customer Strategy and Experience, Flybuys

Flybuys is Australia’s favourite Rewards program, powered by a coalition to give their members a breadth of places to earn and redeem. Being a nearly thirty-year program, and to help remain iconic for the next thirty years, their presentation explored their transformative approach to leveraging customer experience (CX) and insights to help Australians get more of what they value beyond the checkout.

With a legacy of overwhelming insights, and substantial hours spent on reporting, FlyBuys found itself at a crossroads, needing a significant shift to align insights more effectively with actionable business outcomes.

The company embarked on a journey to redefine their focus - to ensure that they were delivering an exceptional experience for their existing members, as well as welcoming new members into their program.

This shift was grounded in the understanding that value for FlyBuys - and most importantly their members - only truly materialises when members are actively participating in the program. So, they began by re-defining engagement into four main groupings, each associated with Flybuys’ specific parts of the member experience::

1.?? Earning standard points

2.?? App usage

3.?? Offer activation and bonus points

4.?? Redemption

Building on this re-defined engagement model, FlyBuys was able to show a clear correlation between engagement levels, customer and business value. This enabled a more targeted approach to improving the CX and interactions that directly influenced engagement levels.

"This flipped the narrative and elevated pain points onto the roadmap”.

By elevating these issues to strategic priorities and integrating them into the business roadmap, were able to prioritise CX initiatives that had been previously overshadowed by other growth strategies.

This case study exemplifies the importance of aligning CX initiatives with business outcomes and the powerful impact of engaging leadership through a blend of emotional and financial insights. FlyBuys’ experience, and mindset to truly put the member at the centre of everything that they do, highlights how a strategic focus on member engagement can transform customer insights into meaningful, value-driving actions within a business.

Beyond Screens: Foxtel’s Quest Toward Integrated CX Insights

Presentation by Simon Stevens , Director, Group Research, Foxtel

Foxtel Group , a leader in the Australian media landscape, has embraced a data-driven transformation to enhance customer experience (CX) across its suite of services, including Foxtel, Binge, Kayo, and Flash.

Simon Stevens, the presenter, started by noting that the Group Research team brings together different insights functions and disciplines to give more wholistic view.

This team also spearheaded efforts to blend various data streams—traditional market research, Voice of the Customer feedback (collected through InMoment ), and audience / rating data—to craft a unified view of the customer experience. This approach went beyond typical data aggregation, incorporating advanced analytics to drive actionable insights and predict value improvements across all customer touch points.

One of the team's key achievements was establishing a correlation between Net Promoter Score (NPS) and customer churn rates. By demonstrating that improvements in NPS were directly linked to reduced churn, Foxtel provided a compelling business case to gain executive buy-in for CX initiatives. They also used driver analysis to show linkages and impact. For instance, exploring the impact the viewing app has on NPS.

Armed with this understanding, Foxtel could show the benefit in targeting longstanding CX pain points that had been previously overshadowed by other business priorities. This shift not only addressed immediate CX issues but also positioned Foxtel as a customer-centric organisation in a competitive digital market.

Some key takeaways from this presentation:

1. Align Insights with Business Objectives: Begin by thoroughly understanding business objectives to ensure that the insights gathered are directly aligned with business needs.
2. Embrace Adaptability: Maintain flexibility in strategies and approaches to effectively integrate new insights and adapt to changing market conditions. Recognize that improvement is an ongoing process: Change is never done.
3. Engage Across the Business: Secure the involvement of wider business functions such as IT, Finance, and senior leadership to provide critical decision support and facilitate the practical application of insights.
4. Benchmark Broadly: When evaluating best practices, extend the search beyond your immediate industry to include insights and strategies from varied sectors for a broader perspective. For instance, partnerships like the one with InMoment brought cross-industry knowledge into play.
5. Focus on Moments that Matter. For the new Hubbl service, they did extensive journey mapping and qualitative research to understand what customers expected and what would matter to them.
6. Insight to Action: Dedicate significant effort to not just creating insights but ensuring they are actionable. This focuses on the consultancy aspect—aiding decision-makers in implementing changes that make a measurable difference.

Ultimately, Foxtel’s approach resulted in a more engaged customer base, evidenced by enhanced usage of their platforms and increased customer loyalty.

Conclusion

The research we saw in Part 1 is backed up by these three ANZ stories from the Customer 360 Symposium:

• Kmart: Demonstrated a direct correlation between high NPS scores and increased customer spending, which provided clear financial justification for prioritizing CX transformations.
• Flybuys: Leveraged customer insights to shift focus to enhancing member engagement, which significantly amplified the value derived from active participants.
• Foxtel: Established a direct link between improved Net Promoter Scores (NPS) and reduced customer churn rates, facilitating executive buy-in for CX initiatives by correlating them with tangible reductions in customer turnover.

In Part 3, I’ll run through my take on the 7 key steps that CX practitioners should take to connect CX to ROI and drive value for both the customer and the organisation.

<-- Part 1 | Part 2 | Part 3 -->

Please leave any comments or questions below, or connect with me if you need any help with CX, Data or general Digital Transformation.