Evaluating customer experience impact for business decisions: CX Mini Masterclass – E24

This edition of Julia’s CX Mini Masterclass series explores best practices for evaluating customer impact when making major business decisions. Building on the concept of customer journey on-ramps/off-ramps, show host and customer experience expert, Julia Ahlfeldt explains how you can leverage your knowledge of the customer journey to prioritize business initiatives, create a CX roadmap, and guide your organization towards making customer-centric decisions which will ultimately drive profitability.

An ounce of prevention is worth a pound of cure

CX professionals are often the guardians of the customer journey within their organization. This comes with the responsibility of ensuring that the organization continually evolves towards customer-centricity, which is no small task. CX professionals may be able to influence changes that are deliberately made with the customer experience in mind. But businesses are constantly evolving and changing, launching new products and implementing revised systems, and most of these of these changes fall outside of the remit of a centralized CX team. This business evolution has an impact on resulting customer experiences, so it is equally important, though more challenging, to ensure that decisions made by other teams within the organization are done with the customer in mind. Without this, CX professionals, will constantly find themselves “fixing” a broken customer journey. It is much more effective to foster awareness about customer experience impact to help the business proactively and deliberately evolve towards customer-centricity than to be in a constant mode of fire-fighting.

The good news is that CX professionals can leverage their understanding of the customer journey, Customer Lifetime Value, and the financial ramifications of on-ramps and off-ramps to help businesses understand customer experience impact and make the right choices.

Build your CX roadmap to demonstrate value

In episode 21 I spoke with Marnitz Van Heerden of Hollard insurance who described how his organization has evolved from one with a centralized CX team, to a federated model, whereby responsibility for customer experience is distributed across the business teams. The federated model is the ultimate goal for many businesses, but the reality on the ground is that most CX practitioners still operate in an environment where CX is managed centrally. In this case, CX practitioners have to plan and prioritize their efforts.

If you’ve ever mapped the customer journey, you know that it can be daunting to tackle a long laundry list of pain points within the customer journey. I suggest starting by evaluating your journey in terms of the on-ramps and off-ramps. Look at where you have your busiest off-ramp, or where you are losing the most customers. You should consider this as your starting point for affecting CX change, because it’s where you’ll be able to demonstrate business value. So if for example, if your customer journey research indicates that customers are off-ramping at sign-up or after their first month of usage of your product, look into which one of these represents the bigger impact in terms of opportunity cost or lost customer assets, and tackle that one first if you can. As you improve the experience and are able to impact on the flow of the off-ramp, you can show how each retained customer, through their CLV, reflects money which didn’t walk out the door.

Proactively evaluating customer experience impact

One of the tough realities of the business world is that decisions are often made in a vacuum. Operations, IT and other teams will make decisions or launch initiatives with their own KPIs in mind. These objectives may ore may not directly align with CX. This is where things can get interesting, because an IT or ops team might be really excited about a new platform or process that will help them achieve their department goals, while being oblivious to what this means for CX. The key is to insert customer-centric thinking into that vacuum!

CX professionals can do this by helping their colleagues understand how their efforts impact the customer experience, so they can factor it into their decision-making criteria. The goal is to mitigate business changes that might inadvertently create a negative experience, and gradually get others in the organization to be thinking about things in a more customer-centric way.

My suggestion here would be to first use your customer journey to identify what elements of customer experience are most likely to upset or delight your customers. Whatever moves the needle either extremely positive or extremely negative, can be used to help other teams evaluate the impact of their efforts. Next, try to include this as a formal component of the planning process. Whether that takes the shape of a customer impact assessment as part of CapEx approval or some sort of CX rating that has to be incorporated into new project approvals, see if you can establish some governance that gets teams to proactively acknowledge how their projects, initiatives and other business changes might affect customer experience.

It’s also important to incorporate CLV so that leaders understand the financial ramifications of customer impact. Often this is overlooked, only for teams to realize later that their $1 million in efficiency savings cost the business $10 in lost customers. When the the vetting of new projects includes a business case with a customer element, this is much more difficult to ignore.

Quantify the customer experience impact

If you really want to get the c-suite’s attention, you can link a monetary value to your customer experience impact. In this Mini Masterclass, we’ve explored this from the perspective of mistake-avoidance, but the same fundamentals can be applied to quantify the ROI of customer experience as the result of deliberate improvements to the customer journey. If you are interested in learning more about this, please check out my Ultimate Guide to the ROI of Customer Experience which includes an overview of popular methodologies and expert guidance on how to pick the right approach.

Want to keep learning about CX?

If you’d like to checkout more of these CX Mini Masterclasses or listen to my longer format CX expert interviews, check out the full listing of episodes for this CX podcast.

Decoding the Customer is a series of customer experience podcasts created and produced by Julia Ahlfeldt, CCXP. Julia is a customer experience strategist, speaker and business advisor. She is a Certified Customer Experience Professional and one of the top experts in customer experience management. To find out more about how Julia can help your business achieve its CX goals, check out her customer experience advisory consulting services  (including journey mapping, CX strategy development, experience innovation, leadership workshops and CX ROI measurement) or get in touch via email.