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Want to Differentiate Your Customer Experience? Create Value for All Stakeholders

6 minute read
Mazen Ghalayini avatar
A look at the most critical method of creating CX results that establish short-term credibility and set the stage for long-term ROI: value creation.

Customer experience leaders are under immense pressure to produce quantifiable results for their initiatives. With Forrester predicting that one in four CX leaders could be out of a job if they can’t demonstrate business value — the need to do so becomes personal. Additionally, my firm, West Monroe found a majority of CX professionals surveyed said they are working within a three- to six-month timeframe to show tangible results to the business.

And now, C-level executives are starting to expand their expectations beyond organizational value creation, as 181 CEOs recently signed the Business Roundtable Statement on Purpose of a Corporation, affirming their alignment to creating value for all stakeholders that their businesses impact.

How can CX leaders balance between a focus on obtaining the quick wins necessary to keep building their program, get additional funding, and remain relevant, while also positioning their organization to create long-term value for all stakeholders?

Several months ago, we wrote about the three golden rules we apply to any CX effort we undertake: 1) Data-Driven 2) Human-Centered Design and 3) Value Creation.  

In this article we will focus on the third, most crucial lens to creating CX results that establish short-term credibility while setting the stage for long-term ROI: value creation.  

Understand Your Organization With a Balanced Scorecard Framework  

Full-scale CX transformations require enormous investments of time and money. They are massive projects, involving multiple departments, sometimes taking years to show solid results. To make the business case for that kind of investment, CX practitioners need to have a thorough understanding of the overall business case, be able to provide a specific payback model, and prove quick wins.

To win top-level support and desired big budgets, CX practitioners need to communicate the value of their efforts to a variety of internal stakeholders. A flexible balanced scorecard, like our CEO$ model below, provides a framework to make sure value is aligned to the target audiences, including employees, customers and shareholders, as well as business goals, and can be demonstrated in the most compelling way.

When solving for business issues, employing one of our other golden rules of CX, human-centered design, will help organizations deliver the most value to their end-users. It’s important to have a deep understanding of what value looks like to the customer, while also satisfying shareholder expectations. While your executives might be focused on improved NPS or reduced churn, customer value drivers might be ease of interaction or speed of resolution.

For example, to increase value creation for their clients, a financial services institution explored the concept of “earned value,” or the additional value a customer receives as a result of deeper engagement with their brand. Their goal is to refine their experience strategy to align more closely with customer desires.

This human-centered approach should be applied to create value for any stakeholder group by empathizing with their unique experiences — and would certainly come into play when thinking about value-creation beyond the organization.

Related Article: Focus on Customer Experience First and the Metrics Will Follow 

Translating Qualitative Measurement to Quantitative Proof Points 

To dial into a specific payback model, you need to bolster your measurement framework with carefully selected KPIs. Which KPIs you select will depend on your sector, size, stage, business model, and most importantly, your North Star. A North Star is the most strategically important goal a company has. For example: become the easiest company to work with in your field. It presents clear objectives, can be broken down into measurable KPIs and milestones, and if achieved, will translate into company success.

While there is an undoubtedly important qualitative aspect to CX data, that cannot be the sole measurement indicator for successful CX programs. Without tying qualitative inputs to quantitative proof points, CX practitioners will continue to fall short on securing the budgets and executive support they need.

NPS has been the gold standard of CX measurement, but it’s no longer enough to satisfy the increasingly competitive requirements of the field. The important question to ask is: how does moving the NPS score translate into quantifiable ROI? 

Learning Opportunities

That is a question that unleashes a series of more specific inquiries: If we improve the customer or employee experience such that they report higher degrees of satisfaction and recommendation, we think that will reduce churn by x%. If the cost of churn is y%, and it reduces by x% in a given amount of time, we’ll save z dollars.

For example, Barclaycard needed to determine the best roadmap to transition from a product-centric operating model to one that would better deliver what customers wanted. Following a modified version of the framework above led them to capture and map key customer journeys, tie them to underlying value stream maps (VSM), and incorporate voice of the customer (VOC) measurement.

The lean methodology focused on creating the most value-add opportunities for customers, tied back to internal company value metrics, and helped focus a spend of millions of dollars on just a handful of customer journeys that would be the most impactful.  

Related Article: Voice of the Customer Strategies: Effectively Turning Feedback Into Action

Create More Value with CX Governance Support

The more built out your data collection and analysis capabilities are, the easier it is to measure CX value creation. When setting up a CX governance framework, having data baked in from the very beginning is crucial. Aligning KPIs and modeling demonstrated value to the appropriate audience in the most compelling way sets the stage for effective CX execution — starting with recruiting top-level executive sponsorships.

If you’ve done a good job of identifying a true company North Star, selecting key KPIs and modeling value — the effort should reflect the kind of high strategic importance that grabs the attention of the most senior executives. With executive sponsorship, prioritized attention, and resources comes an even greater likelihood of being able to show successful value creation because that level of buy-in creates a top-down effect that matriculates throughout an organization.

With your North Star, KPIs, and executive team in place, the next step is to brainstorm and develop a series of tangible, measurable business cases that might move the needle on your desired outcome.

Start by exploring and implementing smaller, short-term, project-based ideas so you can build up data capabilities and progress to larger-scale, longer-term, and more complex loyalty plays.

For example, a business case you could explore could be: does implementing a self-service help chatbot increase customer satisfaction — with customer satisfaction measured via a post-interaction survey. Once you establish that outcome, you might then progress to explore  how satisfaction relates to loyalty and repeat purchases.  

Value creation is not a fleeting concept — it’s a necessary business imperative to maintain the existence of CX programs. Start small. Empathize with your customers. Build a business case to scale/demonstrate early wins. Soon enough, you’ll have a sustainable measurement framework that demonstrates ROI and enables a future for widespread stakeholder value creation.

About the author

Mazen Ghalayini

Mazen Ghalayini is a managing director with West Monroe and a member of the executive team and board of directors. He leads the firm’s Product & Experience Lab.

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