How To Nail The Assumptions In Your CX Business Case€¦ · transformation rooted in customer...

6/20/2018

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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

2© 2018 Forrester Research, Inc. Reproduction Prohibited

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Total Economic Impact Methodology


BENEFITS – COSTS

COSTSROI=

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Reduced cost to serve customers

Increased revenue

Reduced compliance costs


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


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



segment.




1

2

3

What do we mean by

assumptions?

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segment.




1

2

3

Current state

Future state


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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segment.


1

What are your current retention,

enrichment, and advocacy rates for your

key customers?

How would you go about finding them?


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


Questions?

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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.


›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.


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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



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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“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%


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?


› 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.


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?


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?


›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.


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


• Improvement projects

•Employee Awareness

•One additional FTE: Director

•Survey platform

•Maintenance

•Corporate CX training

•Memberships


• Improvement projects

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Questions?


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=


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


Questions?

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Thank youHarley Manning

[email protected]

Kathleen Byrne

[email protected]

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