Companies have yet to see convincing evidence that ties investments in customer experience to gains in company value. It simply isn't good enough to say that improvements in customer experience drive higher customer satisfaction, Net Promoter Scores™ (NPS®), or other customer experience scores. The business impacts of these investments need to be tracked beyond these intermediary measures to hardcore financial measures that would interest a CFO.
So how can a company actually tie customer experience improvements to bottom-line impact? In the white paper, "Measure the Value of Customer Experience Improvements," TTEC and Peppers & Rogers Group, a TTEC Company, outline a five-step process called Customer Experience Value Analysis. The process integrates data analytics with customer value along the entire customer continuum to put the right financial picture into focus. The steps include:
1. Assemble an analytic data repository. Before you can estimate the impacts of customer experience improvements, you must know as much as possible about your customers. Most customer data can be found in existing CRM systems, and can be supplemented with added data elements extracted from channel systems, service centers, and other ancillary customer contact points.
2. Track all customer interactions. To gain a firm handle on individual customer experiences, customer interactions across all channels need to be assembled in the analytic data repository. This includes identifying interactions on social networks and mapping them to specific users, when possible.
3. Monitor customer experience scores. It may be impractical to measure customer experience for each customer, since most customers are not willing to provide information after each interaction. However, customer experience scores can be inferred based on statistical analysis and applied to those who haven’t answered a customer experience questionnaire.
4. Determine related customer behavior changes. For customer experience improvements to have value there needs to be an incremental positive difference in customer behavior that can be attributed to them. Statistical modeling approaches are very good at isolating those gains while keeping all other factors about the customer constant.
5. Evaluate customer value impacts. Once all of the incremental behavioral actions have been quantified, they need to be translated into a financial impact. In most instances this will be straightforward. However, in some cases, the financial gains of certain purchases may differ.
Net Promoter Score is a trademark of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld. NPS is a registered trademark of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.