Brand Image ROI

Two weeks ago we discussed the power of employee engagement for your brand and the true meaning and ROI of a working corporate culture. Today we will examine the business case of the engaged customer, the powerful brand image and the brand loyalty it generates – loyalty that drives repeat purchases, higher revenues and more engaged customers.
 
An engaged customer requires the investment of the ongoing conversation. The “conversation” dollars go to social media campaigns, closed-loop systems for customer feedback, and a responsive loyalty customer service, among other customer experience levers.
 
Invest in people as much as product
 
Two weeks ago, I received a complaint from a JetBlue customer. In order to keep the conversation going with this customer, I had to relay the information to the teams that were accountable for his experience and get back to him with a comprehensive and empathetic feedback about his experience. CX professionals call this close loop, but close loop is a policy. My taking the effort to connect with people across the organization and CARING to get answers is employee engagement on my part, and that is generated by our corporate culture.
 
This culture is what maintains customer engagement and, which, as a result will create an ancillary purchase in the future. Often, people and service are more important than the product of an organization.  People and service build an organization’s brand image when customers interact with the brand. Customer experience relies more on human interactions with the brand than on the technology that enables those interactions.
 
Empathy and Innovation
 
Magazine Luiza is another great example of impacting ancillary sales and seeing a 35% ROI as a result of deliberate investment in empathy and innovation.  The Brazilian virtual store offers products on credit to the under-served customers in rural areas. Customers can see pictures of their desired products then go home and wait for the delivery in the next 48 hours.
 
To achieve loyalty and repeat business, Magazine Luiza also functions as community centers that offer free internet, literacy, cooking and basic banking classes. This investment contributed to the build out of a strong emotional connection between the brand and its audience, transforming Magazine Luiza into a powerful lifestyle brand to its customers. Even customers apprehensive of taking credit visit a place where a friendly face walks them through the experience of borrowing money while their child learns how to write for free.
 
The brand image of growth and development that come from the education components Magazine Luiza provides is, in a way, transferred to the “product” of buying on credit.  Once customers are empowered to buy on credit initially, they return to buy more things because each of those purchases makes them feel economically empowered.
 
Engaged customers are the blood of every business
 
Without engaged customers, business cannot grow. They provide the steady cashflow and the free cashflow that allow a business to invest in products and customer acquisition. The ROI of engaged customers lies in the growth of the organization and the incremental revenue that ensues. Depending on the growth stage of a particular organization, that ROI also can mean an organization’s survival.

Culture Is King – The Power Of Employee Engagement

In 2017 we introduced our ROI series recognizing the challenges all customer experience professionals have to obtain funding for CX initiatives and to prove their positive returns. Our second ROI post covered how a well built customer experience can increase revenue and customer growth of your organization. Today we will walk you through the positive impact customer experience has on employee engagement.
 
Great Culture is the Enabler of Great Service
 
Excellent corporate culture creates engaged employees who are proud of their company and make it a personal mission to deliver great experiences. Engaged employees love the brand they work for so much that they will go above and beyond to “convince” their customers to feel the same way. Actions like this transform employees from brand ambassadors to brand builders. When leadership takes the time to build and maintain an engaged workforce the impact is significant, and profitable.
 
Yet, if culture is of such high value to organizations, why do so few succeed in creating this kind of customer experience advantage for their organizations? Because it is hard, and expensive.
 
Let’s say your cultural values have FUN in them. How do people live that value at work? They celebrate holidays with social events, they go on interesting off-sites, they  have fun contests in the operation, etc. Each of these cultural artifacts of the fun value costs money. Most leaders will say they believe in the fun value; very few will approve the expenses for the discreet activities that maintain that value.  When companies grow, all those activities include the added expenses of travel in order to connect employee teams.
 
Culture is Not an HR Function
 
Culture cannot be achieved with all-hands meetings twice a year and a daily corporate communications email. Culture is a business strategy, a guiding principle that informs how product and service decisions are made. If, for instance, CARING is part of your corporate culture, there are several business decisions and practices you need to invest in to express that care (internal funds for supporting fellow employees during hurricanes, sponsor travel so senior leaders can visit front line employees to better understand their day-to-day challenges, willingness to walk away from a product enhancement that will benefit the customer but also make your front life processes more complex and hard to maintain).  Caring costs money. Real money. Caring is even more expensive than FUN.
 
Caring can save an organization. If you have a product that is not the market leader in terms of quality and you marry it with an engaged workforce that delivers exceptional service, you actually have a shot at keeping your position as the market leader. If you don’t, there is not much going on to motivate your customers return.
 
How Do You Quantify the ROI?
 
It is fair to say that all the people who returned to you after an exceptional service experience would not have done so without having received that exceptional service. Quantify the lifetime value of those customers, and that is how you calculate your customer experience ROI.
 
Culture is a Critical Corporate Mindset
 
People are hired for culture in the true sense of that expression. If transparent leadership and instilling employee trust are values for leaders, then the pay scales of the organization should not be locked for only selected people to see. Transparency is a big word that is often repeated, but transparency is rarely backed by actions like this.
 
If transparency is on a corporation’s values list, then that corporation’s leaders must be ready to be vulnerable and to be challenged by their employees. With the right mindset, this is not a difficult value to live. Being authentic and “walking the talk” can inspire more than any other corporate action can. Transparency and vulnerability is a challenging mindset for leaders, but it gets easier to practice over time, and it is worth the investment.
 
Generally speaking, employees want to (prefer to) respect their leaders. We all need hope, we need someone to look up to, something to keep us moving forward. Employees are much more forgiving and patient with their leaders than we think, so apply a brave mindset to lead wholeheartedly. Be seen and be prepared to have an organization follow you no matter where you lead through the culture you create and the actions that support it.
 
Successful brands have strong corporate cultures that drive their employees to consistently deliver memorable experiences. Culture is the most difficult ROI to prove. It is impossible to replicate, so it can be a competitive advantage. It can also be a deterrent to hostile takeovers and mergers. Having the freedom to grow organically while creating value for customers is the greatest return on investment any business can dream of. In that sense, the ROI of culture is the highest we will ever see.

How to talk to your CFO about customer experience and revenue growth

Last month we introduced the topic of Customer Experience ROI and the complexity of building a good business case for it. The Customer Experience business case is strong, but not easy to prove. Today we will dive deeper in two big wins of a successful customer experience investment – revenue and customer growth of your business.

Revenue Growth

Proving customer experience-driven revenue benefits is a surmountable challenge. It is a project that involves team members from each level of your team to engage cross functionally and build a comprehensive analysis with many assumptions and commitments in the future. While the doers build financial models, senior leaders need to get buy-in from their peers and put on paper the process and policy changes required for the desired impact of the future employee and customer experience.

The first step is to quantify what is the current customer experience.  Do you offer any self-service?  If you do not, do you expect call volume to go down once you implement self-service channels and products? How much in vouchers and credits are you giving out today to irate customers who had bad customer experience?  How much will that number go down if you build intuitive experiences and frictionless customer journeys? To do that you will need data from different systems governed by siloed teams. Once you get all the access you need comes the fun part – structure and connect the discreet data dumps to bring actionable customer insights to life. So arm yourself with patience and start those conversations.

Revenue benefits are not the only financial impact of a successful customer experience transformation. Explore cost benefits as well.  Redesign of customer interactions with your brand naturally will drive redesign of existing roles and introduction of new tools for employees to deliver seamless experience. These changes will bring cost benefits as well. Quantify the transactions you will eliminate and the value of the new services that the employees will be enabled to offer to customers in future state. This analysis requires “future-thinking” and is valuable both for the design of new customer experiences and the quantification of its benefits. As a bonus, new processes and tools will bring transparency that increases financial controls and reduces cases of fraud.

Customer Growth

Customer growth is a less linear benefit to prove. To quantify it cross-functional collaboration is key.  In her book , Jeanine Bliss lays out a customer experience framework that begins with “managing and honoring your customers as assets.” She urges customer experience leaders who build organizational trust in the value/imperative of customer experience investments to prove the “right to customer-driven growth” by connecting the value of customers to business metrics. Very often senior leaders focus on survey results, which is too myopic. Jeanine Bliss concludes that without the extra cross functional work, customer experience is seen as another cost and “nice to have” bells and whistle, not as a successful growth strategy.

How can you persuade your CFO to invest in customer experience? Build the connection between effortless and memorable experiences and customer growth with an actionable CRM (customer information software that informs us of customer characteristics and past interactions with our brand). By actionable CRM I do not mean a database without user interface that you can access from the web. An actionable CRM is accessible, easy to use tool that analyzes previous paths to purchase and the customer’s journeys that you can use as a baseline for the new journeys that you implement for the customer. With those insight in hand you have built the connection between CX and customer growth.

Revenue and customer growth are strong arguments for the success of the customer experience business case. However, do not believe those who tell you they are obvious. Clearly, they have never tried to prove the link between customer experience and revenue and customer growth. Instead arm yourself with good analytical resources and build a CRM solution that can feed your business case for the foreseeable future. In other words, build a mechanism to produce real customer insights, not data dumps that nobody understands.

Next month, in part 3 of our Customer Experience ROI series, we will cover how to quantify the positive customer and employee engagement ROI of the customer experience business case.  Higher employee engagement drives better retention numbers, lower churn and happier customers. Happier customers spend more money with your brand and drive up ancillary sales.  Show me a CFO who does not want both.

Customer Experience ROI. Is It Worth Doing?

The business case for Customer Service is complex. Gone are the days when we bought a piece of hardware that depreciates over 5 or 10 years on the balance sheet. Customer Experience does not even show up on our assets list. At least not with that name.

The ROI of Customer Experience is in the revenue and customer growth of your organization. It is in the engagement of your customer base that leads to ancillary sales. It is in the strength of your brand image and the worth of your brand equity.  The challenge business leaders face justifying investments (especially big ones) is because these relationships  are not linear. Today’s CFO need’s to understand the value of marketing more than ever. Customer Experience is equal to brand management and if you underestimate the importance of either, you might not be in business in 5 years.

Customer Experience ROI is the same as your company’s strategy ROI. If you don’t have a defined brand and marketing strategy backed up with a complimentary communications strategy you will not see Customer Experience ROI regardless of your investments. Think about your strategy and argue the case for Customer Experience investments as an execution of a strategy, not as a business case.