Recently I was talking with a friend who is an experienced CX professional. She had moved companies to head the CX effort in a large insurance company. She said she was having a hard time being taken seriously by senior leaders. Even her colleagues in the CX team noted that many people across the organization regarded CX as a fuzzy domain, lacking substance.
CX-ROI, or linking CX initiatives to a demonstrable Return on Investment, is a CX practitioner’s biggest challenge, according to solution providers and industry commenters. Curiously enough, CX practitioners see building a customer-first culture as their number one challenge (source: inmoment, 2020).
My friend failed to convince the CFO and senior finance leaders of the profitability of CX initiatives. They were concerned about the risks of spending money and not getting a return on the investment. The CFO said: “You must give me a clear financial case using our return on investment hurdles to justify the investment.“
Many in IT think that the answer to confronting change lies in more and more digital technology investment. The IT chief said: “We must spend all our investment funds on digitization and new technology – we can see what we are getting from these investments. Customer experience is vague, and I can’t see what we would be getting for our efforts.”
The head of Operations focused on process improvements and cost efficiencies in the supply chain. He felt that a stronger focus on customer experience would increase costs due to better satisfying customer demands.
The head of Strategy and Planning valued tangible quantitative analysis in all parts of the strategic planning process. He thought that customer experience was a fuzzy concept that could not easily fit in the strategic plan in a way that would get sign-off from the leadership team.
The Chief HR Officer was more concerned with finding practical tools and processes to identify, attract, develop, and integrate talent across the enterprise. Her view was that “customer” skills were essential for frontline employees but not relevant to people in other departments. Besides, the company’s learning and development programs for leaders covered many soft skills like communication and human interaction competencies. She could not see a case for investing in customer experience activities across the whole business.
As a result, despite spending days and weeks preparing and presenting detailed customer experience change initiatives to the senior leadership team, she could not get the funding and buy-in needed for success. She became increasingly disheartened, particularly from leaders’ lack of engagement to jump on board and take action to support the CX team’s efforts.
We agreed that the underlying challenge was cultural and strategic. Yet, my friend lacked a credible framework that addressed both the cultural and strategic questions. The cultural bit required a common focus, from the CEO down to all employees, to actively make the customer the business’s center. Such a framework must be tangible, measurable, and straightforward. It is a framework for the CEO, other leaders, and everyone to relate to and motivates all to act. But even more important, the framework must:
- Link the customer-centric culture approach to action across the business, and;
- Deliver improved profitability.
Linking CX initiatives to ROI, therefore, starts before CX. A mandatory precursor exists, as CX practitioners themselves claim, and the chain below illustrates:
Customer Culture -> CX Initiative Qualified as Strategic -> X-Funcional Collaboration -> Balanced Measurement -> Demonstrable CX-ROI
She needed a framework and tools that prove the link between a more robust customer culture and improved business performance. In short, my fiend’s initiatives must qualify as “strategic” in the eyes of the CEO and the Board.
We also agreed that the proven framework must include benchmarked measurement against the customer-centric disciplines used by the most customer-centric companies globally. A worldwide perspective would give it credibility and substance. It should consist of actions guided by world best practices on those disciplines and a process to engage the senior leaders’ hearts and minds and everyone in all business parts.
I said you could start with some small things like having an empty chair in each meeting that represents the customer’s chair. The chair’s presence begins to develop a mindset of thinking about the customer’s view. But to get momentum, engagement, and meaning, you need this framework.