Intro
While CX professionals know that great customer experience builds lasting loyalty and provides real business value, according to our research, they’re struggling to prove it. Just 17% of CX practitioners can specify a monetary benefit their CX program has contributed that their budget holders recognize and over half (57%) report difficulties justifying or quantifying the impact of their actions. This creates a problem because – as CX professionals look to broaden their program to guard against declining survey feedback and customer churn – securing a budget without demonstrable ROI can be a challenge.
Show, don’t tell
To get the buy-in and funding you need, you have to move beyond just talking about surveys and scores to showing how your efforts can impact the business outcomes that executives care about most.
A well-constructed business case allows you to tell a powerful story about how your work will drive tangible results.
Not sure where to start? Here is a practical five-step approach to help you build support and unlock budget for your CX initiatives.
1. Learn so you can lead
Establish credibility for your CX program - and yourself - by brushing up on the latest consumer and technology trends that are impacting customer experience. This will help you form a point of view on where your market is headed and where your threats and opportunities lie. This will be a great conversation starter that can lead to brainstorming and collaboration – whether you’re talking to your board of directors, c-suite, procurement team, direct manager, peers, partners, employees or even yourself. Thought leadership lays an important foundation for creating vision and buy-in. You can bring this.
Free Webinar: Next generation of Customer Experience
2. Improving the customer journey starts with understanding it
Yes, we are talking about customer journeys – again. Let’s face facts.
Fact 1: Customer journeys aren’t new and have at times been overcomplicated to the point that their effectiveness has been diluted or lost completely.
Fact 2: The power of a simple customer journey that provides a visual framework for your CX program can’t be under-estimated. It can illuminate two things you really can’t live without:
- What you should do to improve and optimize
- Who you should collaborate with
With this information, you can:
- Bring your key stakeholders in from the beginning so they can help build the plan, be part of the change, and share in the success
- Create a golden path journey for your customers so your organization can outrun the competition and win
Who you’ll collaborate with: Key stakeholders
The owners of the points of the customer journey where customers are experiencing delight and friction are your key stakeholders. And you can’t do this alone. The most successful CX programs rely on strong partnerships with the critical functions that drive costs or revenue. The stakeholders that can make or break your CX program (and budget) most likely include the:
- Contact center owner
- Operations leader of frontline teams
- Digital owner of your websites & apps
- Head of products & services
Build a relationship and a plan with each of these leaders – and their teams. Collaborate from the beginning for mutual success and you’ll turn them into champions for your efforts. When they see the value your program is delivering to them today,or share a vision for what it can deliver in the future, they’ll help you unlock the budget to mature your program and expand your impact.
5 questions to ask your stakeholders
- What are your top priorities, opportunities & challenges?
- Do you see customer experience as a risk, an opportunity, or not relevant to your function?
- Which of your priorities, opportunities & challenges are you personally worried or passionate about?
- What data do you have and what is the quality of that data? What data do you need?
- What would success look like to you?
Once you have activated your shared plan and gained momentum, give your stakeholders visibility, credit their successes, and empower them to sell the value through their chain of command and circles of influence.
The more effectively you collaborate, the more significant your impact will be.
What you’ll do: Improve friction & optimize delight
As you evaluate your customer journey, the first thing you’re looking for is friction and delight points. Where are you falling short of customer expectations and where are you meeting or exceeding them? These are your focus areas to 1) improve or 2) optimize.
Next, to build a persuasive case, you’ll need to connect your CX focus areas to specific initiatives that are tied to business outcomes.
Focus on a handful of actions to improve or optimize that have a direct line to key performance indicators (KPIs) that represent financial value to your organization.
Here are ten examples of specific CX initiatives that can drive significant business value. How many of these opportunities can you find along your customer journey?
Increase Revenue / Customer Lifetime Value (CLTV):
- Fix declining online conversion: Improve digital experiences to increase sales and reduce cost-to-serve.
- Increase average order value: Enhance the usability of e-commerce platforms to increase customer spend.
- Accelerate account sign-ups: Improve the digital experience to drive new customer acquisition.
- Increase guest retention and revenue: Use guest experience data to drive customer loyalty and increase revenue from existing customers.
Reduce Churn / Improve Retention:
- Improve account retention: Use proactive engagement and closed-loop processes to reduce client churn.
- Improve customer loyalty: Use scaled closed-loop feedback to build customer loyalty and increase retention.
Reduce Cost to Serve / Improve Operational Efficiency:
- Reduce customer friction: Identify and eliminate friction moments in the customer journey to achieve operational savings.
- Automate complaint handling: Streamline processes to reduce the cost-to-serve for customer support teams.
- Improve resolution rates: Use customer feedback to improve support processes and increase first call resolution.
Enhance Product/Service Innovation:
- Increase tool ease of use: Use customer feedback to inform product development, making tools more intuitive and valuable to users.
Enhance Brand & Reputation:
- Improve online reputation: Use social listening to identify the causes of negative sentiment and take action to improve brand perception.
Free Webinar: NextGen CX Practice Lab
3. Build your CX roadmap around your company’s strategic priorities
The fastest way to get buy-in from executives is to connect your efforts to the company’s strategic goals. Your proposal should not start with a new project idea, but rather with a clear insight that demonstrates why the current state should change and how your proposed activities will improve it. This process begins by grounding your proposal in a clear, targeted insight you've learned from customer feedback, operational data, or competitive analysis. Aligning your request with a clear business objective makes your case more compelling and will help you not only secure resources, but also ensures you're working on the projects that will have the biggest impact.
Map out what you plan to do:
Bring your top problems/opportunities, stakeholders, insights, actions and desired outcomes into a simple but powerful view that you can share internally to communicate your vision.
Free Webinar: NextGen CX Practice Lab
4. Create your business case
From your CX roadmap, you can now outline the specific activities you will undertake to achieve your vision. Your business case should include these specifics along with the business metrics you will impact and the associated costs of your plan.
Understand the baseline of the business metrics you’ll impact
Before you can forecast improvement, you need to establish a baseline. This requires working with your key stakeholders – as well as finance – to understand the current performance of the business metrics you plan to impact.
For example, a business might discover that their client churn rate is 10%, or that the average cost per product return is $15. By understanding the current state and its contributing factors, you can create a clear and realistic baseline from which you can demonstrate improvement. This activity builds credibility with budget holders because it shows you’ve done the necessary due diligence. It also gives you a clear starting point for measuring the impact of your work.
Identify the cost of your improvement plans
This step requires you to itemize all costs – both financial and human capital – required to execute your proposed activities. For example, if your plan involves training 500 managers on new closed-loop processes, you would calculate the labor cost by taking the average manager's hourly compensation and multiplying it by the total hours required for training and ongoing application. You should also identify any external service requirements, such as purchasing new software or professional services. Providing a comprehensive account of these costs helps build the credibility of your business case and allows budget holders to confidently compare the estimated return with the required investment.
Calculate your expected ROI
Ultimately, you must convert your forecasted improvements into financial terms. It's in this step that you demonstrate the potential return on investment (ROI).
Free Webinar: NextGen CX Practice Lab
5. Win the CFO Conversation
When requesting budget for your CX program, lead with the quantified business outcomes from your business case – not satisfaction and NPS scores. Frame your ask around financials that your CFO will care about and understand:
- Revenue protection - "We're losing $X million annually to preventable churn—this program recovers 70% of at-risk customers"
- Cost reduction - "Automating review responses and proactive issue resolution reduces cost-to-serve by 20-40%, saving $X annually"
- Revenue growth - "Improving our Google ratings from 3.8 to 4.2 stars drives 10-15% increase in foot traffic, worth $X million across our location network"
Here are 4 things you can do to help make your sure your business case is a success:
- Connect your CX outcomes to metrics they prioritize and relate to — sales growth, customer acquisition costs, operational efficiency. They will be more likely to approve investments that clearly impact the P&L so make sure your business case focuses on hard numbers, not soft metrics.
- Consider showing a pilot ROI in 60-90 days with measurable proof points, then requesting full deployment funding.
- Use language like "revenue-generating asset" and "competitive moat" rather than "customer satisfaction initiative."
- Most importantly, quantify the cost of not investing: "Every quarter we delay costs us $X in lost revenue and reputation damage to competitors outpacing us in online ratings."
Free Webinar: Winning the conversation with your CFO
Case studies
For inspiration, many Qualtrics customers have successfully done this. Here are some examples:
- ServiceNow saw a 7% increase in account retention rate.
- USAA achieved $20M in operational savings by reducing customer friction.
- Sigma Healthcare saw an 8% increase in average order value, leading to a $20M annual revenue increase by improving their e-commerce platform.
- Abercrombie & Fitch identified and fixed 3,100 website errors, resulting in $1M in recovered revenue in a single month.
Struggling to prove the business value of your CX program? Flip the script on the status quo and build a CX program that executives actually want to fund with our on-demand CX Practice Lab.
