Achieving Boardroom Agreement On The ROI For Your Customer Service Investment
In my last article I explored five different approaches to designing a customer service model with a focus on reducing the cost of the project. In this article I want to develop that idea further and consider how you can present a customer service model to your board with a focus on the Return On Investment (ROI).
Every executive knows that customer service is a cost of doing business. You have to answer customer interactions because at some point your customers will have a problem or question. You can’t just build products and then never allow your customers to get in touch, but how can we measure the true ROI of the customer service process?
The bottom line is that it’s not easy. You can invest in creating a great customer experience and then see your overall business revenue increase, but it’s very hard to see the direct cause and effect of each individual process change on the bottom line. Researchers at Cambridge University in the UK published a detailed paper in 2016 where they tracked how an improvement in Net Promoter Score (NPS) can be connected to broader business success - so there is evidence out there, but every business is unique.
When talking about this subject I usually try breaking the problem down into smaller areas so it’s easier to focus on. Here are the areas I would suggest you focus on if establishing ROI is important for your board.
- Metrics: contact centers are packed full of metrics, but which ones work for you? Are you trying to reduce the length of customer calls even if that has a negative effect on CX? Think carefully about the metrics you are managing and analyzing and consider which can be connected back to business success rather than the typical performance indicators used in the contact center.
- Think beyond the contact center: because your customer interactions begin when a potential customer first hears about your products. How do they find more information? How easy is the purchase process? How do you stay in touch with an existing customer for years into the future? Start thinking about the total lifetime value (TLV) of each customer, rather than just each individual interaction.
- Define what success really looks like: coming back to the comment on metrics - what is it that you want to see anyway? Do you want more sales, sales in a new demographic, or a focus on retaining the customers you already have? Define the ideal outcomes for your business and then work back from that - how do we create a pathway to those outcomes?
- Align with partners: think out of the box. You shouldn’t just engage a specialist partner to help with your CX processes and then pay them every month based on headcount - or some other basic measure of effort. How can that expert partner help you to innovate or think ahead on what will be important for your customers next year? Can you define a contract where your CX partner earns more if their actions improve sales? Work together and find how smart your partner really is.
- Take action: you can measure and analyze as much data as you want, but if you don’t take specific actions based on the insight then ROI will never be affected. In fact, nothing will change at all. This is really the important of point 3, because you should have an awareness of what you want to influence and change.
I’m going to continue on this board room theme in my next article where I will explore how to elevate the argument for investment in CX - watch my LinkedIn for the next update. Feel free to also use my LinkedIn if you have any questions or just want to get in touch.