Why value realization should guide your CX strategy
by Max Long
posted on: 10-15-2020
Historically, organizations have used transactional metrics to measure business success. Whether the customer was buying a hotel room, a new vehicle, or a piece of enterprise software, the major focus was landing the sale. Even today, when most organizations speak about customer success, they talk about customer loyalty metrics like repeat business or renewals. It makes perfect sense: Research proves that it is easier to nurture and upsell existing customers than it is to convert new customers. It’s also much cheaper.
The problem is there is often little consideration of the customers’ success metrics or desired business outcomes.
Experience is the currency of customer satisfaction. And experience is calculated by tallying the total sum of engagements your customers have with your brand throughout their entire journeys — end to end. Those begin to add up in advance of any sale and continue long after the transaction. In fact, the post-purchase phase of the customer relationship is one of the most important periods in the customer journey — and the one most organizations ignore.
If your customer experience management (CXM) strategy does not center on realizing actual value, your ability to meet your customers’ needs is limited. You can’t manage what you don’t measure. The most effective CXM programs today are dedicated to uncovering how organizations are delivering value to their customers in the most effective way possible.
More than customer success
To be clear, this isn’t a new mandate for your customer success team because here’s the thing: Customer success isn’t driven by customer success managers in isolation. In fact, delegating CX to customer success managers alone is a recipe for failure; it tacitly absolves the rest of the organization of responsibility for their piece of the journey. Value realization as a CXM strategy succeeds only when it is understood, embraced, and realized by the entire enterprise.
Here’s how you do it:
Agree on the customer journey: You need to define and gain agreement by senior leaders across all organizations on the customer journey. If you gathered all your employees in a room and asked them who cares about customer success, everyone would raise their hands. If you then asked them how they measure customer success, you might get as many answers as there are people. Organizations that want to provide best-in-class customer experiences must determine what drives value for their customers and what metrics best represent that.
Align KPIs with the customer journey: You can accomplish this by first mapping each stage of the customer journey and then assign KPIs to each. It’s unlikely a customer satisfaction or renewal rate will tell you much. Adoption rates or customer support resolution metrics may paint a better picture. Making these KPIs meaningful and clear brings the business closer to the customer and creates ownership for CX performance goals.
Operationalize CX: You want every customer-facing function to live and breathe these KPIs. To do that, you must assign ownership and design governance processes for them. Making sure there is executive-level accountability and owners for each customer journey stage enables experience-centric teams to take action, break down organizational silos, and achieve long-term success. It’s also important to assign accountability for key KPIs to all levels in the organization.
Invest in data and platforms: In order to enable a customer-centric operating model, companies need the right technologies to centralize data sources, measure customer engagement, and disseminate actionable insights to engage with customers. The goal is to create a platform that delivers an end-to-end customer view across channels that enables front-line employees to deliver relevant and real-time customer experiences. This isn’t about creating opportunities to cross sell or upsell. It’s about aligning the entire organization with the business outcomes that matter to your customers.
Taking a value realization-based approach to CX is no small – or one-off – feat. It is something that must be built, supported, and continually refined over time. But the return on this effort is clear. Companies that prioritize and effectively manage their customers’ experiences are three times more likely to significantly exceed top business goals, according to the ”2020 Digital Trends” report by Adobe and eConsultancy. The Temkin Group also found that companies that earn $1 billion annually can expect to earn, on average, an additional $700 million within three years of investing in customer experience.
The bottom line: Redesigning the customer strategy around what your customers care about opens the door to long-term, sustainable growth.
Topics: Digital Transformation, Analytics, Insights & Inspiration, Digital Foundation, Customer Intelligence, Experience Cloud,
Products: Experience Platform, Analytics, Experience Cloud,