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

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6/20/2018 1 CX NYC 2018 Harley Manning, VP and Research Director, Customer Experience Kathleen Byrne Senior Consultant, Total Economic Impact How To Nail The Assumptions In Your CX Business Case Sponsored by Bloomreach 2 © 2018 Forrester Research, Inc. Reproduction Prohibited

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

Page 1: How To Nail The Assumptions In Your CX Business Case€¦ · transformation rooted in customer empathy 25 percent improvement ADVOCACY RATE Built new digital experience for 10 key

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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

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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?

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Thank youHarley Manning

[email protected]

Kathleen Byrne

[email protected]