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CX NYC 2018
Harley Manning, VP and Research Director, Customer Experience
Kathleen ByrneSenior Consultant, Total Economic Impact
How To Nail The Assumptions In Your CX Business Case
Sponsored by Bloomreach
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Total Economic Impact Methodology
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BENEFITS – COSTS
COSTSROI=
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Reduced cost to serve customers
Increased revenue
Reduced compliance costs
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Increased revenue
Reduced cost to serve customers
Reduced compliance costs
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A refresher: how does CX drive revenue? It starts with loyalty
Retention
loyalty
Enrichment
loyalty
Recommendation
loyalty
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You need to do your homework.
Know your target customer
segment.
Have a plan in place to
improve their experience.
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1. Identify key KPIs for the selected customer
segment.
2. Gather data to inform your projections.
3. Make a projection and do the math.
Steps for building the business case
1
2
3
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1. Identify key KPIs for the selected customer
segment.
2. Gather data to inform your projections.
3. Make a projection and do the math.
Steps for building the business case
1
2
3
What do we mean by
assumptions?
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1. Identify key KPIs for the selected customer
segment.
2. Gather data to inform your projections.
3. Make a projection and do the math.
Steps for building the business case
1
2
3
Current state
Future state
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What do we mean by assumptions?
x
Number of
customers
1,900,000
Projected attrition rate
– current attrition rate
11% - 10%=
Annual
revenue per
customer
$100
Retained revenue
$1.9 millionx
Calculating revenue retained by decreasing customer attrition
Retention Revenue
Current
attrition rateFuture
attrition rate
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Who are your key customers?
What projects are you planning
to implement to improve their
experience?
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1. Identify key KPIs for the selected customer
segment.
Steps for building the business case
1
What are your current retention,
enrichment, and advocacy rates for your
key customers?
How would you go about finding them?
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Find answers to the questions:
• How many customers will be affected?
• What's their retention rate?
• How often do they purchase incremental products?
• How many of them recommend you?
1Identify key KPIs for the selected customer
segment.
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1Identify key KPIs for the selected customer
segment.
A B C D E F
Customers
(000)6 11 55 67 8 37
% total
customers3% 6% 30% 36% 5% 20%
Revenue per
year$2,577 $4,354 $34,883 $552 $269 $2,523
Monthly
revenue$38 $34 $51 $.70 $3 $6
Attrition rate 6% 6% 6% 4% 4% 2%
Segment
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Questions?
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Steps for building the business case
What type of data would help you predict
how much you can move those KPIs?
How might you gather that data?
2 Gather data to inform your projections.
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›Understand the historical behaviors of your
customers to give yourself a reasonable range.
› Look for peer or industry data.
›Field a survey to ask about perception and
intent. Analyze the results for correlations.
2 Gather data to inform your projections.
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2 Gather data to inform your projections.
A B C D E F
Customers
(000)6 11 55 67 8 37
% total
customers3% 6% 30% 36% 5% 20%
Revenue per
year$2,577 $4,354 $34,883 $552 $269 $2,523
Monthly
revenue$38 $34 $51 $.70 $3 $6
Attrition rate 6% 6% 6% 4% 4% 2%
Segment
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2 Gather data to inform your projections.
point
improvement5
Trained brick and mortar
employees to deliver consistent
experience
Launched a complete CX
transformation rooted in
customer empathy 25 percent
improvement
ADVOCACY RATE
Built new digital experience for
10 key journeys £ £700 average
increase loan value
per customer
ENRICHMENT
Source: Forrester Research
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2 Gather data to inform your projections.
“Which terms best represent
the specific emotion(s) you felt
during your most recent
interaction with [US]?”
“How likely are you to
recommend [US] to a friend or
family member?”
“How likely are you to consider
[US] the next time you
purchase [our type of product
or service]?”
Survey your customers Find the correlations
Advocacy Confident
Positive 65%
Neutral 14%
Negative 21%
Retention
Positive 83%
Neutral 14%
Negative 3%
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Questions?
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Make a projection.3
Think about the key KPIs you wrote
down earlier and the projects you plan
to implement.
How much do you reasonably think you
can affect those metrics?
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› Rely on the data you gathered in Step 2 to inform your
projections.
› Determine when you will start experiencing these
benefits.
3 Make a projection.
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Your job is not to be right. Your
job is to make projections that
no reasonable person will say
are wrong.
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3
x
Number of
customers
impacted
Projected rate –
current rate =
Annual
customer
revenue
Increased
revenuex
Make a projection and do the math.
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Questions?
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BENEFITS – COSTS
COSTSROI=
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Translate your roadmap into costs
Think about the projects in your
roadmap. What costs will you incur to
implement them?
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›Hiring and training
›Technology
›Touchpoint redesigns
›Professional services
›Program execution costs
Costs generally fit into five categories
Consider when you’ll incur those
costs:
• What year?
• One time or recurring?
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Costs vary widely
Touchpoint redesign
$240,000
$1,800,000
A bank redesigned its
customer conversation
model to leverage customer-
focused language.
A wealth management
company redesigned its
forms to be easier to use.
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Sum your costs by category and by year
Year 1 Year 2 Year 3
•Two FTEs: manager-level
•VoC technology and analytics
•Survey platform
•Journey mapping tool
•VoC training
•Memberships
•Cross-functional support
•An additional two FTEs: Director & CXO
•Contact center suite
•Survey platform
•Maintenance
•Corporate CX training
•Memberships
•Cross-functional support
• Improvement projects
•Employee Awareness
•One additional FTE: Director
•Survey platform
•Maintenance
•Corporate CX training
•Memberships
•Cross-functional support
• Improvement projects
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Questions?
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Risk adjust your benefits and costs
›Ask yourself:
• How much uncertainty is there in projections?
• What is your likelihood of success: What type of
behaviors will you have to sustain to achieve your
objectives? How many people are involved?
›Decrease your benefits by 5-20% depending on
your confidence level.
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BENEFITS – COSTS
COSTSROI=
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Bring it all together
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› Use this framework as a starting point.
› Collaborate with your colleagues to gather the data you
need.
› Don’t get stuck striving for perfection.
Recommendations
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Questions?