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Measuring the Impact: Discovering the Influence on CX, Value, & Revenue (Step-by-Step Guide)

By Kamil Ali, CCXP posted 07-22-2023 11:07 AM


This article is an upcoming part of How to Focus on the Most Profitable Segment for Maximum Growth Potential: Step-by-Step Guide

Imagine a sunny day at the beach, where a skilled surfers stand on the shore, gazing out at the vast ocean. With a determined look in their eyes, they know that among the crashing waves lies the perfect wave. Businesses embarking on a Customer Experience (CX) initiative face a similar challenge.

Surfers know that testing different waves is essential to find the perfect one—the waves that will propel their success. Similarly, businesses must test their CX initiatives to identify the key drivers that truly matter and create a solid plan tailored to their unique needs. It's like riding the waves of opportunity, knowing that only by focusing on the right priorities can they achieve the desired results and make the biggest impact on CX, value, and revenue.

Today, we'll delve deep into understanding your customers' journey, uncovering the key drivers that make them tick. I'll help you prioritize these drivers so you can focus your efforts where they have the most impact. And that's not all! I'll guide you through testing innovative CX initiatives, ensuring your business case is foolproof.

But we won't stop there. We'll dive into developing a comprehensive plan tailored to your unique business needs. And the best part? I'll show you how to measure the impact on customer experience, customer value, and revenue. Get ready to witness the tangible results of your efforts!

So, are you ready to propel your business to new heights? Let's embark on this adventure together.

Step 1: Reviewing the Customer Journey for Key Drivers

To start, it's crucial to review your Customer Journey and identify the profitable segment. Just as a reminder, in my previous article, Segment A was highlighted as our most profitable segment.
The Food App brand Customer Journey
To better understand the customer journey, we can break it down into the following customer Decision-Making Process. (Skim through the journey and focus on the words that are highlighted).
Need Recognition
1. Imagine a hungry customer who wants to order food through a food app. This is where it all begins.
Information Search & Evaluation of Alternatives 
2. During this phase, customers discover your food app through various touchpoints such as recommendations from friends or local advertising. Consider marketing campaigns through TV, radio, print media, social media, and online platforms. Customers might quickly evaluate different food apps if they are not in a rush to order.
Onboarding and Buying 
3. Customer account creation
4. Personalizing recommendations during account setup
5. Exploring the menu for discount offers and personalized recommendations
6. Selecting a convenient payment method (credit cards, debit cards, digital wallets)
7. Contacting customer service via live chat support for any queries or concerns
8. Getting order confirmation via email or text message, including estimated delivery time and the order tracking link 
9. Receiving the order within the mentioned delivery time 
Post-buy Evaluation
10. Leave reviews and ratings for restaurants and delivery personnel
11. Generate word-of-mouth
Imagine you've just finished conducting a survey, and guess what? The majority of your customers have provided valuable feedback on Discount Offers, Personalized Recommendations, and Live Chat Support services. These findings are crucial! If you want to learn more about how to analyze them effectively, check out our blog post titled Put a Hollywood Spin on Your CX Insights with the Three-Act Structure ). It's a fun read that'll make your CX game even more engaging! 
Just a quick note: I’m using Net Promoter Score (NPS) as my metric. However, you can use any other CX benchmarking metric.

Step 2: Understanding the Key Driver to Prioritize 

So, after analyzing your findings, you've identified the key drivers. Now, let's shift our focus and prioritize which one should be addressed first.
To tackle customer churn, let's concentrate on addressing the concerns of the 3,000 Detractors. Among them, 1,650 (55%) mentioned their dissatisfaction with the 'Discount Offers' journey. So, it shows that 'Discount Offers' should be our priority. However, we need more details about the specific type of discount offers we should provide to our customers. To do this, we need to dive deeper into the Detractors verbatim related to 'Discount Offers'. (If you're using a good survey platform, this verbatim will be automatically listed for you).
Kamil’s BONUS: Not everything is explicitly stated in verbatims. Sometimes you might need to trust your own intuition. It's all part of the process!
Now, let's take a look at the pain points we discovered while investigating the 'Discount Offers' journey as an example: 
Let's take 'Promo Codes' as an example to showcase how customers perceive them. Here’s what you have found:
Promo codes not working: When customers attempt to use a promo code that turns out to be invalid or expired.
Difficulty finding promo codes: Some customers struggle to find valid promo codes that they can apply to their orders.
Restrictions on promo codes: Certain limitations, such as minimum order amounts, eligibility criteria for specific restaurants or menu items, or restrictions on code usage frequency.
Limited time frame: If a promo code is only available for a limited time, some customers may leave negative feedback if they were unable to use it before it expired.
Lack of personalized promo codes: Customers don't receive personalized promo codes that are tailored to their individual preferences or order history.
Repeat this process for other journeys: Free Delivery, Restaurant-Specific Deals, In-App Promotions, and Subscription Discounts. Once you've gathered all the insights, it's time to implement testing and review the impact of these improvements.
However, keep in mind that the fact that customers mention 'Discount Offers' the most doesn't necessarily mean it should be the sole focus of your business. It's crucial to understand the timelines and impact associated with each driver. We'll explain this further in the upcoming steps. Let's continue exploring. 

Step 3: Testing the CX initiative to Build a Business Case

Since you have the findings from all customer journeys, time to kick-start your CX initiative.
Test with Detractors: Now, it's time to put your prototype to the test with a select group of detractors. Implement your prototype for them and monitor the outcomes closely. After one month, run the NPS survey specifically with the detractors. The results will provide valuable insights into how many detractors have converted into promoters. If you see positive conversion, it's time to celebrate!
Build Your Business Case: To strengthen your business case, consider using the Average CLV (Customer Lifetime Value) of both promoters and detractors. Calculate the change in customer value to demonstrate the impact of your CX initiative. This data-driven approach will resonate with management and provide a solid justification for investing in customer experience improvements.
Get Buy-In from Management: Armed with your findings, it's time to present them to the management team. Show them the positive impact that your CX initiative can have on customer satisfaction, retention, and ultimately, the bottom line. Use visuals, charts, and graphs to make your presentation engaging and convincing.

Step 4: Develop a Plan 

Once you have the management buy-in, the next big thing is to give them the plan. Implementing CX improvement involves various factors that can affect the plan, such as timelines, resource allocation, budget availability, system changes, business processes, quick fixes, and the risks associated with change. To address these factors, it is crucial to engage with all stakeholders to gain a comprehensive understanding of the effort required. Additionally, utilizing your test data can help in developing a clear roadmap. See the following template for this: 
Looking at the table you’ll find that among all the customer journeys, Promo Codes emerges as the one to prioritize. Let me explain why:
• Your stakeholders have identified it as an area that can be swiftly addressed.
• Based on your customer survey, a significant number of customers have raised complaints about Promo Codes. Improving it will help to address a larger number of customer concerns.
• Another survey conducted after testing shows that the impact on NPS is the highest for Promo Codes. Many of the previously dissatisfied customers are now endorsing the brand.
• Although the project is taking longer than expected, it is still worth investing in. The three points mentioned above demonstrate the potential long-term benefits.
• Estimated budget is not a fixed amount and depends on various factors. However, let's consider an investment of $200K, which management can afford.

Step 5: Discovering the Impact on Customer Experience, Customer Value ($) & Revenue ($)

To cut a long story short. Let’s say after improving the Promo Code journey, you've tackled all 5 journeys one by one. After launching these enhanced journeys, a whopping 47% of Detractors have converted into Promoters! Each journey played a vital role in driving this conversion, showcasing the power of your CX initiative. Now it's time to unveil some real numbers to your management. Grab their attention with the following slides! 

Are you ready to witness the remarkable positive changes your CX initiatives have brought? Let's dive into the exciting results and share them with the management!
Next, show some impact on CX (or NPS) evidence to the management and say: “We have successfully transformed 773 Detractors into Promotors, significantly boosting our NPS by an impressive 15 points. Our new NPS now stands at a remarkable 40!” 

Then it’s time to brag about the impact on customer value of your CX initiative—evidence #2.
“Now, let's talk about the tangible outcomes of your CX initiatives. The average Customer Lifetime Value (CLV) of a Promotor is $100, while a Detractor's CLV is $50. Switching 773 Detractors to Promotors shows the increase in Customer Value by $38,650—a considerable increase in customer value generated by your CX initiative. Take a look:” 
After implementing your CX initiative for the next 6-12 months, it's important to track your NPS data, revenue, and customer base. By ensuring a sustained enhanced experience throughout customer journeys, you'll start seeing positive results.
Once you have solid numbers, which will likely be around the 12-month mark, the impact on revenue will become evident. At this point, it's time to present your findings to management. Use the following slide—your evidence # 3— and confidently declare, "Our CX initiative has yielded fruitful results! Before the initiative, our NPS was at 25 with a total revenue review of $900,000. However, after implementation, the revenue has soared to $1,300,000. Overall, the journey toward improving CX has been fruitful, and success can be seen through these tangible outcomes."
Then showcase additional evidence as well. For instance, highlight how you were able to convert Detractors into Promoters, acquire new customers, leverage the power of positive referrals, nurture customer loyalty, and engage in cross-selling to our existing customer base.  

In today's fast-paced and competitive business world, delivering an exceptional customer experience is the key to thriving and standing out from the crowd. By going above and beyond to delight your customers, you can foster loyalty, drive repeat business, and ultimately boost your bottom line. However, optimizing customer experience requires a strategic approach that delves deeper into understanding key drivers and their impact on business outcomes. 

So, grab your surfboard and set out on your CX journey. Embrace the challenges, navigate through distractions, and focus on those key drivers that will make all the difference. Just like the surfer who rides the perfect wave, your determination and strategic approach will lead to remarkable results in customer experience, value, and revenue.

To your success,

#CX #VOCCustomerInsightUnderstanding #MetricsMeasurementandROI #CXStrategy


Did I miss something important? Let me know if you have any ideas, thoughts, or questions.

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