What's REALLY been worth reading over the past week? Craig Hanna, digital marketing consultant and resident GMA managing editor, introduces the articles that have caught his eye...
It is a sobering thought that 70% of all organisational transformation efforts fail because the C-Suite was not included or engaged at the beginning of a programme (according to John Kotter’s book, ‘Leading Change’). Customer-facing teams have an invaluable overview of the customer experience, but occasionally fail to express their expertise in language that motivates senior management to action.
CX professionals need to speak to the interests of senior managers, their boards and investors and work closely with the CFO to demonstrate the bottom line impact of a great customer experience. You may find the CFO is one of the toughest nuts to crack, but one of the but most influential friends you can make.
Growth is the CFO’s watchword
We see it every day and we are not alone. Accenture says 71% of CFOs think growth is the CFO’s strategic priority and ‘The CFO Alliance’ in their ‘Key Drivers of 2016 Results and 2017 Opportunities’ say 69% of CFOs think that to find new growth they need to understand their customers better. Growth really is their watchword.
So it comes as bad news that surprisingly few CX professionals are making their case in terms that resonate with their CFOs; they are missing out on this perfect opportunity to engage, to align roles and foster an open-door conversation. CX managers know that happy customers spend more, stay with a company longer and cost less to serve, but in the US, nine out of ten CX managers cannot measure their programmes’ ROI, according to Gartner’s 2016 Customer Experience Innovation Study.
Appeal to the C-Suite: strategies for the customer-engaging marketer
- First, CX managers should arm themselves with ‘inspirational appeals’; those headline grabbing customer stories, anecdotes, vivid quotes and customer verbatims that nobody can dispute. Paint a picture, in human terms, of why CX matters.
- Second, take a ‘consultative’ approach. Think about your CFO as a collaborative partner. When you set out to quantitatively demonstrate how CX affects financial performance, consult the CFO. Involve him or her in the framing and analysis itself. Make the CFO an integral stakeholder in the process. Don’t just deliver results; build, assess and adjust results in consultation.
- Ask what variables matter to the CFO? What data and outcomes are important? How do they prefer results to be delivered and how frequently? What metrics will help tie the CX initiative to the corporate outcome? What is the burden of proof? No two CFOs are at the same point in their customer journeys and collaboration and consultation work better than presumption.
- Only once you think you can hold the CFO’s interest, should you present your facts. Do so in the language of growth: ‘Up-sell, cross-sell, referrals, retention and spend’ – how do these tie to the CFO’s growth imperative? (If you’ve involved the CFO from the start, this is the easy part; none of this will be new to them.)
- Finally, rather than making a purely statistically based pitch, ensure the CFO understands that you have his or her interests at heart, creating the right conditions for a discussion based on financial and operational data.
Until relatively recently, those statistics were guarded in private more than they were available in public. But now companies are more confident and we’re seeing a trend towards reporting CX initiatives and metrics in board statements and annual reports. Companies who do this well are proud of the accomplishments their CX investments have enabled and happy to share their achievements – especially with the investing public.
CX ROI is easy to demonstrate
The best way to convince executives that customer experience matters – and is worth the investment – is to show them the potential returns they can achieve. Farmers, a large insurance company working with Medallia in the US, reports its programme has achieved a 60% boost in NPS(R) and a 3% customer retention improvement, giving them a $500m increase in revenue annually. A startling statistic, which does not even account for other cost-savings. The results took 18 months to achieve – far faster than even the most ardent internal champion of the CX programme had even anticipated.
Yet another, AirBnB reports that promoters refer friends 44% more regularly than detractors. Its referral codes make data easy to analyse, proving the ROI of a rich customer experience to everyone across the enterprise.
Costs to serve customers and acquire customers are also easier to contextualise now than they once were. When promoters do the job for you, costs of acquiring customers reduce drastically. It is generally accepted that promoters are three times more likely to create referrals than detractors.
CX professionals do not need to be told that CX is the ultimate growth catalyst. But we often forget to articulate this to the people who control the purse-strings. In trying to ensure the C Suite ‘gets it’, our clients tell us that persistence and consultation pay off – that those who do not overstate their case, who work to understand the CFO’s objective and align their interests, always succeed in making the all-important link between CX outreach and corporate income.
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