Proving the value of your CX programme

How do you prove that the cost and effort involved in developing and maintaining your customer experience programme is worthwhile? To get buy-in from stakeholders, you need to demonstrate how success will be measured, and the estimated return on your investment.

As you’re probably aware, there are calculators available via most major customer experience platforms. These help you map out the financial benefits of CX programmes. But CX programmes add value to all areas of the business! Existing calculators are seldom able to offer a balanced perspective.

In this article, I’ll provide a bigger picture view of the value of CX programmes, so you can see the wider impact through three distinct lenses: financial, customer and employee. And I’ll demonstrate linking your operational data to your customer experience measures, so you can see how to prove ROI to different stakeholders.

Why go beyond the financial impact of CX?

Helping stakeholders understand the importance of having a high NPS, and demonstrating that you’re ‘paying back’ your new CX platform is not enough.

It can take time to show the impact of your CX programme. Financial calculators don’t really go past the basic costs of running the operation. Your company will want a more comprehensive breakdown - especially if they’ve just given you people to work on transformation on top of the new technology costs!

CX leaders need to understand the operational part of the business as much as CX craft, or else it’ll become their arch nemesis.

You need to understand the existing success measures in your company, and communicate how CX impacts these. It comes down to understanding what each of your stakeholders values most.

Your CFO will want data and numbers - this is where your calculators help. No pretty pictures or gut feelings here, just ‘what are you saving me?’ and ‘how much do you want from me?’
Product managers want to know things like ‘what are you expecting us to do with the data?’ and ‘how can I use the data to quantify how many engineers and scrum teams will be needed to action fixes?’
Service teams want to discover ‘how will the data be used to improve customer service’ and ‘how will it impact existing support staff and customer processes?’
Your Executive team wants to understand the big picture. Will our customers be happier? Are they going to advocate for our product? What’s the cost to the business?

This is why I promote a three lenses approach, looking at how CX affects the financial, customer and employee aspects of the business.

Knowing and communicating how your CX programme provides value to each area means you’re more likely to get company-wide buy in.

And company-wide buy in means more users of your CX tools, and more insights being put into action. Which sets your CX programme up for success!

Value through three lenses: financial, customer, employee

I feel the financial lens is already well understood when it comes to proving ROI, so let’s take a closer look at the customer and employee lenses. These always play a role in the financial aspect regardless.

Customer lens:

It’s likely that if you’re using NPS or CSAT, you have a good idea of how improving customer or user experience benefits your company.

Successful CX programmes aim to:

Capture and analyze feedback from disparate channels
Implement processes so that insights can be acted on
Close the loop with customers - not just ‘we’ve heard you’, but ‘we’ve heard you, and this is what we’re doing to address your issue.’

Asking for feedback alone can improve your reputation among your users. But closing the loop is the ultimate goal - after all, people are giving your company feedback because they are hoping you’ll do something with it!

Here’s a refresher of the ways improving customer experience impacts your business:

Customer loyalty: When customers are satisfied with your products or services, they are more likely to continue to choose your company for repeat business, leading to increased revenue. They are also more likely to become ‘promoters’ and recommend you to others.
Brand and company reputation: The way you handle feedback - negative or positive - will affect your wider reputation. And we all want a reputation that helps us attract new customers.
Reduced customer churn: Happy customers are less likely to leave or switch to one of your competitors.
Employee morale: Customer satisfaction impacts how employees feel about their work, and overall employee retention. There’s a world of difference between dealing with happy customers vs constantly frustrated ones!

Overall, happier customers means less issues to deal with, which costs less!

Employee lens:

The employee lens is an aspect of CX programmes that often gets overlooked. This is not just about how customer satisfaction impacts employees (as I’ve indicated in the last point above). It’s making employee feedback part of your CX programme in its own right.

Your employees should be able to deal with customers quickly and easily. This means adequate training needs to be in place to make this possible.

If training is poor - and if the insights from your CX programme aren’t used to improve this - the likelihood of employees leaving is much higher.

And if you’ve got high churn, then you’ll have to spend more time training new people. Their speed to competency will directly impact customer satisfaction. Talk or handle time will be higher. Contact rates will be higher. And it’ll cost your company bucketloads.

But your CX programme can help turn this around:

Feedback analysis (from employees and customers) can easily identify the most frequently asked questions. Make these answers more easily available to your customers to help lower your contact rate (like an online FAQ) as well as your employees.
Internal feedback from employees can identify recurring issues and training needs.
External feedback from customers about employees will identify further topics and validate internal feedback findings.
As customers become happier, your contact rate comes down. Your cost to serve comes down. You may need less people moving forward.
When your staff do speak with customers, it costs the company less, because they’re able to complete calls faster and more effectively.
Employees feel more engaged with their work, because it feels purposeful. Retention is higher, and psychological safety is higher.

When it comes to specifics for your company, you’ll need data analysis to help. You’ll need to work out things like your existing cost to serve, and how much reduction is realistic.

This is why it’s essential for CX leaders to understand your company’s operational data and how success is measured, so you can tie it back to your CX programme. Find out what levers are most important, and build your case around these.

Linking operational metrics to experience measures

You might focus more on financial, customer or employee depending on which stakeholder you’re presenting to. But when presenting your work you would cover all three. Your job as a CX leader is to explain why your programme matters, and why your business should care!

There’s no one size fits all approach here, as it’ll depend on the operational metrics at your company.

When I talked through this in the past, it always became super evident what the most important lag measures for the business should be. The top four lag measures that everything we do is in service of. These should be linked to company OKRs.

An example is:

Strategic Net promoter score at an overall company level - ‘how likely are you to recommend?’
Cost to serve coming down
Contact rate coming down
Employee engagement moving up

You can then ladder your business unit OKRs up or down to one of these lag measures, giving you your lead indicators.

A lead indicator from my example would be service level. Specifically, what does our service level need to be for us to have an NPS of more than X?

In comes data, from different data sources, to help us reverse engineer and identify the answer. A data analyst helps with this. On a surface level, I know I need to move tactically and build a program of work to get us to positive X or above on NPS because right now, we’re at Y.

And if we get contact rate down, does that make customers more likely to recommend the service function? Will this increase NPS? If so, how many points between Y and X?

Here’s where you can see the need for data analysis, so you can make an informed decision on how much effort you would put into those two different tactical pieces of work.

You know where you want to get to, and the things you can maneuver. Data analysis suggests one initiative will shift NPS 10 points, and the other only 1 point - so you know which initiative to focus on.

You've always got to be able to link back operational data to your experience measures, to prove ROI. For example, what would a higher NPS do for all other aspects of your business?

Final thoughts

Ultimately, getting buy-in from your executive team hinges on their understanding of CX. Are they committed to the company being customer-centric, or customer-first?

Do the executive leadership team know what your current NPS is, and how to go and find it themselves? Do they actually care - or do you need to put in the work to show them why they should care?

To be fair, it can be really hard to prove the value of your CX programme when you’re just getting started. Identify small goals to work towards, and decide what early success will look like. Achieving smaller goals early on will consolidate your position. This will make it easier to scale your programme as momentum builds.

Always remember that tying your programme to operational measures is key. Keep them relevant to the stakeholder you’re speaking with. What are your driver models? And what are you wanting to know as a company - how are you expecting a CX programme to serve you? Get this right and proving the value of your programme will not be a problem.

About the author:

Scott Downing is a Global Employee and Customer Experience strategist, and an advocate for Continuous Improvement. He has experience across the SaaS, Telco and Financial Service sectors in multiple regions and countries. He uses Human Centric Design methods in his work.

Recently, Scott helped a tech Unicorn kick off its CX Strategy and Transformation Program to ensure continued success. He has also led multiple International Teams for large organisations like Telstra and Intuit. In these roles Scott was renowned for focussing on Customer Support, Digital OMNI channel launches/optimization as well as driving a focus for quality and people development to move the needle.

Scott is originally from the UK and has been in Australia for 15 years. He is the proud Winner of the Customer Service Executive of the Year in Australia and Internationally.