When we set up in business or build new offers we get stuck into business cases. So, after developing our offering, finding customers and gaining a little time to spend out of the office, we want to sit back and wait for the good times to roll.
But we can’t. Our competitors are innovating, start-ups are starting, and our customers are getting more demanding. And we must spend money and allocate time / resources to stay ahead.
For example, in the early days of internet retail, sites didn’t offer customer service. Perhaps they believed automation would lead to perfect execution, every time. That wasn’t to be, because humans don’t behave predictably, nor do we share needs and preferences. In response, retailers invested in service people, systems and tools to meet their customers’ needs. Even if some sites bury it under lots of clicks.
Automation doesn’t automatically satisfy our customers, but it records data. When we use the data to understand our customers’ experience, we can create delight.
But. Yes, there had to be a but. To invest in customer experience we must rationalise the use of money and resources. And that’s hard. Few organisations accept the justification – ‘it will make our customers happier’. More will bank on an ‘avoidance of cost’ rationale.
However, the holy grail of business cases is ‘it will generate revenue’.
How to build a business case for improving the customer experience
Forrester* produces regular analyses of the relationship between customer experience and business performance but it shows no causal link. You could use it to tell a story. But you won’t be able to calculate a Net Present Value for investment.
If you have historical data, then you might be on easy street. Say an earlier project raised customer satisfaction 15 percent (a neat trick). You can seek the financial benefits (e.g. a corresponding increase in revenue) and read them across to new initiatives. The difficult lies in showing further satisfaction increases will yield the same benefits.
If you can’t build a revenue generation case, the ‘avoidance of cost’ rationale may be tempting. Potentially saving money is great for justifying expenditure. But you must stop spending the money for avoidance to work and realising the benefits of customer experience improvements can be a project in its own right.
And just like that, our business case options are reduced to ‘our customers will be happier’. Might customer experience management be a basic need of every business? Like desks, email, parking, team building, is it something we know is right but cannot justify?
Numbers, culture and emotion
Unfortunately, the ‘happy customers’ argument rarely washes. We need to help our stakeholders believe in benefits using numbers, culture and emotion.
I worked in a business where everyone accepted a specific customer issue as the norm. Until the CEO had the same experience. Then it became enemy number one.
Numbers – traditionally the heart of a business case
Blend industry data and your data to show that losing custom loses money. But don’t: stretch the point; make leaps of faith or expect people to invest in vague promises.
Use nice solid facts like:
- the cost of recruiting new customers
- how much each customer is worth after their first purchase
- whether subscription customers renew
- how many people take your free trial, don’t value your offer and run
Culture – encourage your business to ask for change
Keep customer data up front and fresh. And don’t hide the bad news. Share churn statistics and work out the cost of customer recruitment. Show your performance stats – be it delivery, quality or cost. Celebrate the money saving, service enhancing ideas generated by your team.
But my personal favourite is embedding the customer into development.
- When you are building a website, do your research. Review your competitors’ site. Find out what your customers like and dislike.
- When you are developing a product, do your research. Look at feedback, assess your product objectively and try to break it.
- When you are changing your business tools and processes, ask what impact they have on the customer and how you can improve customer’s experience.
I enjoy getting customer satisfaction for free!
Emotion – move the dial from complacent to advocate
Don’t get emotional. Instead ‘show don’t tell’, inviting your stakeholders to feel what your customers feel.
Take your seniors through a typical customer journey. Get them to buy from your website or make a cup of tea with your newest kettle. Ask them about their experience and how they felt.
Bolster their emotions:
Give examples using the customer’s voice. Share comments from reviews, customer reports and surveys. Use videos and diaries.
Build emphatic images, for example, a ‘measles’ chart can show the extent of issues.
Illustrate the costs and opportunities of your customer experience with customer stories. And if you can’t consider using generic data – see the sources for ideas.
Commit to building the data and understanding for numerate future business cases.
Persuading people to change priorities and practices, especially if they have always worked, is a tough job.
I hope these suggestions inspire you to build a business case to deliver a compelling customer experience.
Have you persuaded cynics to improve your customer experience?
What worked for you? Have any of the methods mentioned in this post given you a great idea?
References:
*Forrester is a highly influential research and advisory firm.
Hands up I haven’t read Forrester’s report – here is a link, but you have to be a member to see it:
I have read many reviews of the report, here are the ones I found most useful:
We understand the importance of customer experience, but what is the actual correlation between customer experience and revenue growth? Is it even possible to attribute revenue dollars to additional investments in customer experience? In short? Yes. Forrester’s Customer Experience Index…
“Our conclusion: superior CX drives superior revenue growth.” – Harley Manning, Forrester “Customers who had the best past experiences spend 140% more compared to those who had the poorest past experiences” – Peter Kriss, Harvard Business Review There is a lot of chatter happening in business ci
Some useful sources of numbers and logic to support your business case
If your customers suddenly find good reasons to give your competitors a trial, maybe it was because they weren’t satisfied with your product, or the type of
Updated: 16.8.19
