10 Jul CX Value Drivers — CX Management’s Gas Pedal
If you’re responsible for deriving more value from your customer or client experience (CX) initiative, or you oversee those who are, this article is for you.
Over the past few months, while working with a few new clients wishing to focus on their service experience, we came to an important realization. WE CAN ALL BE DOING MUCH MORE WITH CX! And we should.
Most people in CX management roles have an overly pragmatic view of what CX can help them accomplish. We have to say that there is so much more that companies can accomplish via CX than they may realize. I realize this may not be a popular view among over-worked CX’ers—but bear with us. The reasons for the pragmatism are generally funding and support. After all, who wants to overpromise and underdeliver?
Our hypothesis is that conventional approaches to CX aren’t creating enough value, fast enough. Further, organizations can create significantly more value with their CX management programs only when higher levels of executive support understand more about what’s achievable in accordance with increased budget and support in attaining these higher levels of value creation. Companies need to understand the value drivers to be more successful.
This hypothesis emerged during one of the initial exercises we use to kick-off CX management programs with client leadership. The purpose of the exercise is to determine what the organization wants to accomplish by working on their client experience management programs. When we lead these sessions, we ask, “What does this organization wish to accomplish with strategic client experience? And “What outcomes do you need to see in the first three/six/nine/twelve months?”
The answers we hear from CX leaders generally signals what we call ‘limiting pragmatism.’ They are typically: higher NPS scores, learning more about our customers through journey maps, launching a Voice of Customer program, or making customers happier.
In our view, this should not be enough. Strategic investments in CX should yield far more and have a strong basis in finance. The organization’s CFO ought to be a part of the CX equation.
The exercise we used to kick-off the workshop is called the CX Value Driver Strategy Session. In this exercise, we convene leadership in a workshop setting and we lay out a list of value drivers for an intensified focus on CX management. We then discuss the options where the organization might build new competencies, invite the CFO into the conversation or prioritize more value-creating efforts. This is usually more of a prioritization and alignment exercise where finance, operations, marketing and the CX team arm-wrestle over how limited or expansive they want their focus to be. 9 times out of 10, the company arrives at one desired outcome with the belief that only one is achievable. We are here to tell you, that is just simply not the case.
The Value Driver Workshop first lays out a simple CX program progression so that we can align expectations at the highest level and begin to evaluate more of what’s possible. The progression helps people see how CX inputs and outputs cascade through organizations through a series of impacts, determinations and influences.
This is the CX program progression we use to help executives and CX Leadership look at CX at the highest level:
When we show this slide, and ask, “what do we want CX to help us accomplish?” we typically get the “wait, what do you mean?” response. This immediately tells us that expectations for what CX can help us accomplish are unnecessarily limited.
The discussion that follows is revealing.
Typically, executives, who are one degree separated from the work necessary to achieve outcomes, lean forward and want to know why the CX program cannot work on multiple value/segment drivers. At the same time, the person directly responsible for the CX initiative leans back and claims there aren’t enough resources to achieve multiple outcomes with current investment levels in the program. This is a healthy stand-off. Generally awkward, always healthy.
This is precisely why we kick off CX management programs with this cohort using these tools. We want this discussion to happen exactly like this. We want these realizations to bubble to the top with us in the room to represent and mediate both sides of the equation. There is a workable solution and more often than not, it can be transformational.
Full transparency, our objective is twofold: a) we want the executives to see a critical tradeoff where more value-creation outcomes are achievable commensurate with higher-levels of support; and b) we want the CX leadership to feel empowered to achieve more with more.
We haven’t run into many executives who aren’t interested in new pathways to revenue or significant cost reduction. They simply don’t know that it’s achievable through their existing CX management programs. When we present ways to increase value from client interactions while improving the experience clients can have with the firm, the outcomes only need to be multiples of the budget. In other words, if $1 million is required to capture $8 million, most executives are willing to take that risk if it’s measured appropriately. And when we help CX leaders illustrate the concept of ‘stacking benefits’ (revenue + NPS + increased cross sell + customer lifetime value) it tends to add to the proposition’s attractiveness. It’s all in how it’s measured and presented.
In the final analysis, we’ve found the success of most high-achieving CX management programs come down to five things:
- 1) investment/support
- 2) prioritization
- 3) approach methodology
- 4) designed accountability
- 5) communication
Generally, the first two things, investment/support and prioritization, are the most confounding and difficult to establish. But they are the most critical. In order to set the CX program on the right and proper trajectory to accomplish more, it makes sense to convene all the powers in one room to establish what else is possible. Once we see what’s possible, it’s easier to establish how to calibrate desired outcomes with investment-necessary and develop a firm understanding about what it will take to get there.
The first step, is to talk through what’s possible with higher expectations. When CX leaders are given more latitude and support, conventional levels of pragmatism tend to give way to more aggressive plans to create more value with smarter investments in CX.
PRO TIP: Start your Executive Leadership workshop with the CX Pilots Value Driver diagram above and re-evaluate your CX management program with the following question:
“If we could create more value with our CX management program, which of these value drivers make the most sense for us to pursue—and what would it take to capture that value?”
Best of luck to you and let us know how it works out.