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Your First Three Steps to Driving Impact

Jim Tincher Jim Tincher 11/29/2022
Image depicting steps to driving impact, including tying financials into business reporting.

As I speak in support of “Do B2B Better,” attendees love to hear how Dow, Hagerty, UKG, and other organizations take steps to driving impact, growing their CX programs as a result. And these programs deserve their accolades. They’ve done an amazing job of showing how customer experience creates outcomes where customers want to buy more, stay longer, and interact in ways less expensive to serve.

But that wasn’t always the case. While Nancy at Hagerty has built her program over many years, Jen and Riccardo at Dow and Roxie at UKG started their programs less than five years ago. They didn’t start out as rock stars—they built their way up, one step at a time. And you can do that, too.

Many attendees at my presentations want to know where to start. How can I put myself on the same trajectory as these great programs? So, I’ve set out the first three steps to driving impact along the way: Identify sources of value, incorporate that into your analysis, and transform your reporting to be business-focused.

Identify Sources of Value

This might seem easy, but it’s not. The first question in our Journey Mapping Five Questions is, “What is the right business problem or opportunity?” Answering that question takes work because we’ve become so accustomed to focusing on survey outcomes as our goal.

Spoiler alert: survey outcomes are not business problems. Our problem is not getting customers to move their mouse a bit to the right. Our problems are counted as money. High customer churn, low upsell or cross-sell, high costs to serve. These are the business problems you should aim at.

To identify the best sources of value, look to Finance. We’ve interviewed hundreds of CX leaders, and fewer than 1 in 5 report that they spend time with Finance. You need to be in that 1 in 5. As I share in Do B2B Better, “I’m constantly surprised at how few in marketing and customer experience have a relationship with their finance team. I cannot suggest strongly enough the necessity to spend time with Finance to become educated on the financial drivers of your business, even if you think you understand them. Asking to improve your understanding will help build the bridge to Finance. After all, a supportive finance team offers instant credibility and reassures executives you are focused on business outcomes. Finance also likely has models to give you a head start.”

This last part bears repeating: Don’t work with Finance only to learn (although that’s important). You also want to create an ally, someone who can go to bat for you when you need executive support. Find a CEO who’s concerned about the company’s future, and I’ll show you a CEO who regularly meets with Finance.

In Do B2B Better, I include four case studies: Dow, Hagerty, UKG, and “XYZ Software.” In my introduction of Dow, I show how Jen Zamora, Senior Director of Global CX and Commercial Excellence, showcases her value (she’s since been promoted to a global change management role):

For an advanced manufacturer such as Dow, innovation is clearly an outcome of interest. But joint innovation is relatively rare, and even when it happens, it takes years. So, while this is a big deal, it’s only one outcome that Jen tracks. She also considers in her work more routine metrics, such as order velocity and margin—the same metrics her internal customers obsess over.  She continues, “We’ve been able to prove that improving on-time delivery, as well as its related customer complaint experience, adds financial value through improving revenue, margins, and price in future orders.” Few companies take the time to prove this linkage. But it’s no coincidence that the companies that can do this—such as Dow, Hagerty, and UKG—also have thriving customer experience practices. The proof enables the investment needed to sustain such positive outcomes.

Incorporate these Sources of Value into Your Analysis

In his book, Thinking, Fast and Slow, Nobel Laureate Daniel Kahneman states, “What you see is all there is.” In other words, we tend to limit our thinking by what we see at the time. This is certainly true in customer experience. Since most programs only have survey data in their analysis and reporting, that’s where the focus falls. But you can change this.

One area that separated the Change Makers—those who could show they were generating value—from Hopefuls—those who couldn’t—was how they used data. Hopefuls analyze sentiment, while Change Makers analyze and change behaviors.

To start analyzing the behaviors mentioned above, bring the appropriate data into your survey platform. Executives are interested in customer sentiment, but they’re far more focused on the outcomes that will get them promoted. And those outcomes are typically financial. So, incorporate that data into your analysis. As Roxie Strohmenger, VP of Customer Experience Strategy at SaaS company UKG shared in the book,

“I’ve been saying, ‘Recurring revenue is king, but let’s break this apart because there are factors we contribute to directly on the services side that are about the protection of the revenue.’ So, we break that apart and say, take into account cost to serve and all of those elements, which is what we need to be able to measure that piece. And then, what’s that formula? What if we move away from just OSAT [overall satisfaction, a relationship survey score] and instead, get down to things that really matter within the experience? This is how customers perceive the interactions or the quality dimensions—those drivers that surfaced either in the journey mapping that we did with Heart of the Customer, the competitive benchmarking study that we did last year, that we know can move the needle the most, and let’s quantify that and then build the model so that, when we track them, we can say, ‘If we want to do this initiative, we know it impacts A, B, and C pieces. We can calculate quite easily the potential revenue uptake and control for cost.'”

Let’s break that apart. For this analysis, Roxie incorporates multiple data sources into her analysis:

  • Recurring revenue
  • Churn (“protecting revenue”)
  • Cost to serve (e.g., number of open tickets multiplied by cost for each ticket)
  • Customers’ perceptions of the experience (relationship and transactional surveys)

She combines all this to create a model, so when survey items improve, she can see how that improves recurring revenue, churn, and the costs to serve. Roxie couldn’t do that until she brought that data into her survey platform. It takes work to gain access to the data. But these steps to driving impact create results that are well worth it.

Transform Your Reporting to be Business-Focused

Change Makers report on business health first, then use survey data to explain those business outcomes. As Nancy Hagerty, VP of Insights and Loyalty at auto enthusiast lifestyle company Hagerty explains, “Linking our customer experience metrics to business results—retention and growth—were critical. That put us on the map in terms of creating an enterprise KPI. When an executive asks, ‘Why do we care about this?,’ it’s an easy answer. We know that if we see NPS points drop, we’re going to see retention drop, and that’s money, right?”

It’s not that NPS isn’t related to value. It’s that leaders care more about the outcomes—happy customers who stay with Hagerty and choose to purchase more—than a survey score. Before you can even start discussing survey results, you must prove a direct connection between them and a healthy business. This is how executives judge success.

Nancy concurs, “Sharing the health of our customers and how that reflects our business outcomes greatly increases the impact we’re able to have.”

Getting Started

These three steps to driving impact obviously aren’t all that you need to do in order to succeed. But they’re great places to start. Once these are in place, you can create an Emotional North Star and implement deliberate change management to bring along the entire organization. Don’t start there, as both require these three steps.

By discovering the sources of value, bringing them into your analysis, and updating your reporting to include the business impact, you will begin the journey to becoming a Change Maker.

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