Budget pressure, unconvinced executives and an inability to demonstrate concrete ROI can all be death blows for CX projects. COVID-19 has put even more pressure on executives in many organizations to optimize and reduce costs.
This has led to more critical views and skepticism about new projects. Gartner’s latest report recommends four methods for overcoming these objections and successfully launching new CX projects.
According to Gartner:
“the inability to demonstrate the value or ROI of CX is a high-stakes situation requiring attention. Application leaders should choose which of our four justifications of CX initiatives is best suited to their circumstances.”
Customer satisfaction isn’t everything of course, but it’s hard to imagine a successful business that doesn’t closely consider the customer experience. Study after study confirms this.
- 54% of customers have higher expectations for customer service today compared to one year ago and that number jumps to 66% for consumers 18 – 34 years old. (Microsoft)
- Customers are 64% more likely to try a company’s new offering if they think the company has very good customer service. (Qualtrics XM Institute, ROI of Customer Experience)
- The payoffs for valued, great experiences are tangible: up to a 16% price premium on products and services, plus increased loyalty. (PWC Experience is Everything)
- Increasing customer retention rates by 5% increases profits anywhere from 25% to 95%. (Bain and Company)
CX Project Challenges & Pitfalls
One of the first pitfalls many fall into when justifying customer experience projects is heavily relying on anecdotal or emotional arguments. Arguing happier customers spend more may be true on some level, but is too superficial. How much more? How much more in this industry? What exactly is making them happy? It may be obvious that adding self-service will at least bring some benefit to customers, but how much? How will that impact contact center costs? Can we reduce staff with it?
Unymira’s Convince your Manager Kit, for example, outlines both the hard and soft ROI of knowledge management platforms for customer service, including the initial investment and ROI calculations based on contact center size. Knowledge management returns can be difficult to quantify because the impact can be indirect. That’s why we put together an easy to understand graphic visualizing the effects on KPIs that managers are concerned about.
In one image, they can immediately see the connections and value, all without talking about search, agents or features.
Next, look for broader opportunities and impact outside your specific use case. A new knowledge management platform for contact centers could also be extended to your internal IT helpdesk, a classic two birds with one stone scenario. Perhaps the ability to integrate it with your existing Salesforce CRM or Zendesk ticketing system would benefit the entire company or solve other departments' problems.
Four Approaches for Justifying CX
We believe, Gartner report lays out the following 4 approaches to justify CX initiatives within your company based on its pure business value using:
- Financial performance indicators
- Industry research
- CX KPIs such as ROI, NPV or IRR
- Strategic rationales such as risk mitigation and long-term gains
Download a full copy of the report and read the step-by-step guides to each method.
Good luck on your next project!
Gartner, Justify Customer Experience Initiatives Using 4 Approaches, Michael Chiu, Ed Thompson, Don Scheibenreif, Jake Dunne, 6 July 2020.