Determine the impact of your customer experience management program with this 3-step ROI methodology

Kirsten Moore | Aug 18, 2021 Kirsten Moore 08/18/21

Although most business leaders say it’s critical to demonstrate the financial impact of the customer experience, many don’t know how to quantify ROI. And to add even more pressure, time is of the essence with 52% saying they have less than a year to meet demands of their executive team and connect customer experience investments to top-line financial benefits.

This sense of urgency has many brands searching for the “secret formula” to a successful customer experience management (XM) program. And while there’s no easy shortcut to establishing ROI, with the right approach, your brand will be able to draw clear lines between XM improvements and business outcomes.

Here are 3 essential elements every XM program needs to identify tangible proof points behind customer experience efforts:

Measure the customer experience across the entire customer journey

Uncovering financial results and knowing where to focus requires a holistic approach to the cross-channel customer experience. The traditional “top to bottom” funnel of the past is no more. Customers now engage with brands when and how they want without a defined trajectory. And brands without an agile customer experience solution in place—one that measures across physical and digital channels—will have trouble providing a consistent experience at every touchpoint.

Stand up listening posts at every stage of the customer journey. Having the ability to reach your representative customer base where they are will help you leverage experience feedback to identify areas for improvement and prioritize those opportunities with the greatest ROI benefit.

holistic measurement plan that spans the entire customer journey includes research, shop, purchase and service

Collect targeted + quality customer experience data

In addition to gathering feedback across touchpoints, you have to make sure you’re collecting the right kind of data. Because if you’re not gathering information that leads to actionable insights, your XM program isn’t headed toward ROI—it’s about to hit a dead end.  

To stay on track, work with your XM provider to ensure your customer feedback approach is built to capture targeted and measurable insights—helping your brand achieve these 3 things:

  1. We are defining the customer journey through the eyes of the customer: Brands often make assumptions about the customer journey vs. defining that journey through actual customer behavior. Remember: it’s the consumers who determine how they’ll interact with your brand and what they expect across channels. That’s why it’s imperative to understand the customer journey through the eyes of the customer. To do this, map out all your brand’s channels (e.g., in-store, online, click-and-collect, delivery) and leverage experience feedback to determine customer expectations and common themes across those touchpoints.
  2. We are reaching our representative customer base: For programs that span multiple channels, touchpoints, and modes, achieve a representative sample by establishing invitation rules (frequency of invitation to the same customer, frequency of invitation distribution, time between invitations, etc.) to capture sufficient response by channel or touchpoint and prevent over-surveying your customers.
  3. We are prioritizing data integrity: You require a multi-pronged approach for ensuring clean data in all stages of the process—so your scores won't ever change, and you can spend your time acting on the data vs. questioning its validity.

Take an insights-driven (not a data-focused) approach to your experience management strategy

Like many buzzwords, insights get talked about so often they have become difficult to define and easy to confuse with data points. Understanding the difference between the two and determining if your customer experience program is delivering true insights or simply collecting data is now more critical than ever—particularly for brands who want to evolve and improve customer loyalty.

Here are 5 ways to distinguish between an insight or data point in your XM program:

  1. Is it specific? A fluctuation in scores is barely a conversation starter—true CX insights add nuance by referencing industry knowledge, demonstrating client understanding, and putting disparate datasets in dialogue.
  2. Is it understandable? Deciphering detracts from doing—make sure every insight is presented in an intuitive format that clearly defines action items and responsibilities.
  3. Is it prescriptive? The road to mediocrity is paved with good ideas that never get implemented—a true CX insight prescribes clear action items and identifies who’s responsible.
  4. It is measurable? When you go in with a goal—something tangible that you can measure success against—you’re much more likely to come out with a win.
  5. Is it worthwhile? When a program’s success is confined to a single area of the business, that program is more prone to scrutiny than recognition. Map CX improvements to cross-functional gains that demonstrate tangible, widespread ROI—so you can prove the program is worth the effort.

Prove the financial impact of a strong customer experience

When it comes to understanding the economic impact of your XM program, numbers speak louder than words. If your XM vendor is only talking about ROI in a vacuum and can’t provide you with a tangible connection to specific business outcomes, your program is falling short.

SMG is dedicated to providing brands with outcome-focused insights that yield true value. In our recently commissioned Total Economic Impact™ study conducted by Forrester Consulting, clients quantify the efficiencies SMG brings to their business. Based on real client interviews and data validations, this Forrester TEI study details the tangible business outcomes achieved by a composite of SMG clients leveraging the smg360® CX solution.

The in-depth analysis determined—within just 3 years—a composite SMG client saw:

  • 551% ROI
  • $12.44M net present value
  • <6 months payback period

To learn more on how SMG’s customer experience solution helps our clients identify real-world ROI through their CX programs, download the study: The Total Economic Impact™ Of The smg360® Customer Experience (CX) Solution.

Kirsten Moore | Director, Client Insights

Customer Experience Update