Customer experience (CX) pros are constantly asked, and ask themselves, “What’s the ROI?” It’s a logical and important question, even though companies can get trapped by the desire to see clear financial ROI from every CX activity. Fortunately, there are a number of tried-and-true methods to model and measure ROI from overall improvements in customer experience (as measured by NPS, C-Sat, etc), specific improvement projects, and closed-loop case management. We spend a lot of time helping companies use these methods to justify their investments in voice of customer (VoC) programs in particular.
More recently, we’ve seen more companies move beyond the what to the next logical question: “How exactly does this program deliver this ROI?” They’re trying to see the line from investment to return a little more clearly. Like ROI modeling itself, the mechanics of achieving ROI can be explained pretty simply in the VoC world.
Fundamentally, modern VoC programs help companies enhance three key activities by making them more customer focused and generally better, faster, and cheaper:
- Strategic decision-making. Every company has some sort of process or protocol for making big decisions and investments. Voice of customer programs make those processes more effective. For example, when VMware rolled out new pricing model last year, the VoC team quickly identified the customer pain associated with the decision and made the case for change. When the firm’s CEO told apologized for the pain and announced the change at a big customer event, he got a standing ovation, and the story got picked up by The Wall Street Journal and Wired. More importantly, the quick response helped the company keep its customers who might have otherwise churned, and it earned some major good will by demonstrating its customer focus. The company probably would have figured this out eventually through traditional market research services or just through the grapevine. But the VoC program – by putting real-time data, analytical tools, and insight into the hands of business people – allowed them to act quickly, before the issue did any major damage.
- Performance management. VoC programs also help companies make better routine decisions to manage their performance in more customer-centric – and profitable – ways. Once AeroMexico determined that it needed to improve the level of empathy shown by employees during delays (a strategic decision enabled by its VoC program), it then needed a way to manage its delivery. It now distributes regular customer scores and comments about empathy at the individual location and employee level so that everyone knows how they’re doing and whether and how they need to improve. As documented in recent case study, the result has been transformational. The thousands of little decisions made by these employees every day have driven NPS up significantly, equating to a $12 million increase in annual revenue for the company.
- Customer intervention. Finally, VoC programs help companies more effectively intervene with individual customers for recovery and upselling – closing the loop, as we say in the biz. At Webster Bank, there was no reliable way to identify and contact customers who were unhappy with the bank and likely to churn. Traditional market research was too slow and anonymous, and there was no mechanism for notifying the right people inside the business to pick up the phone. With a real-time system now in place to deliver timely, relevant data and alerts to branch managers, Webster has turned this situation on its head. Also documented in a recent case study, the bank now turns 4 out of 5 unhappy customers into highly satisfied customers and even upsells 1 out of 10 of those same customers during the follow-up conversation. Not surprisingly, all of those little saves and wins have generated a significant financial return.
So, there you have it. The three fundamental ways VoC programs deliver ROI. Have I missed any? Have you had similar experiences in your organization?