They’ve become common questions Mindstream hears from clients shifting to a consumer-first model within their marketing strategies: Can CX be measured? Is there an ROI to CX? The good news is there’s not only an ROI for CX, but there are several beacon metrics to gauge and measure it throughout journeys, time horizons, and engagement strategies.
To understand these areas of return, a brand needs to identify what kind of quantification helps decide where to prioritize time and dollars, which in turn leads to uncovering the greatest value of customer experience improvements, and business impacts.
These returns can be applied to B2B, B2B2C and B2C depending on business modeling, including what’s driving business decisions, campaigns and budget rebalancing decisions.
To align an ROI to customer experience efforts, the first step is to determine what customer behavior to focus on–tried and true; it’s the customer behavior that's most closely associated with the financial outcomes a marketer wants to measure. If looking at a transactional strategy, for example, typical measurement behaviors feature customer spend and subscription renewals, upgrades, and even loyalty program sign-ups and activity. This portrait of customer behavior is relevant, as are referrals and service interactions, as they take the course of cost, to customer service, to cross-engagements, to financial returns.
A brand’s NPS is the most common ROI CX metric. According to a recent Forrester survey, levels are monitored with such open-source metrics. In fact, 45% of marketers read out CX from their Net Promoter Score or customer satisfaction levels.
The business value of a one-point uptick in NPS score can impact RO. By moving detractors up toward promoter values, your NPS will thus increase, as will the lifetime values of those more satisfied consumers. What is even more interesting because moving the lower rating level one point higher from say a 1 to a 4, and then keeping them moving upwards as the brand is meeting their needs. can have more positive financial outcomes and ROI than a needle moved from a 9 to a 10 score. That’s partly because converting those potential one-off or new customers to happier consumers will impact their relationship with a product or brand as early as their first transaction experience, building trust.
Quantifying the value of NPS is a goal post mover. Each area of customer improvement can have a compounding effect on the ROI. If search functionality is improved, offering more keyed search results or item availability, the CX impact point to increase CX ROI is search relevancy. With conversion increases, those numbers can be tied to the CX improvements, and the success story presents itself in the data.
As an added example, let’s pivot to ecommerce. When the effort to improve the customer experience of a store site or the online and instore bridge is considered, the transactional satisfaction won’t just create repeat revenue, it can increase loyalism and word-of-mouth.
In some instances, brands can tract individual customer value through loyalty cards or accounts with online stores and subscription businesses–taking into account more than just a brick-and-mortar measure.
Not to be outdone as a beacon metric, CSAT is often used in lieu or in tandem with NPS by many organizations. These outcomes can often elevate empathy points of a customers and highlight their wants and needs which can eventually move all satisfaction metrics up in value.
We’ve all taken one of these surveys rating a business from 1 to 10 on how they’ve engaged us with their product or services. A CSAT score doesn’t have one typical level of measurement. The score itself will depend on exactly what question is being asked and what value of answer is considered “satisfied.” Since scores do vary, there’s no one value for a good score. The goal is to get the score as close to 100% as possible.
The CSAT can also incorporate questions that delve into the heart of what CX impact points can improve and what may need to be considered as future CX strategies.
Successful CX can be gleaned beyond NPS or CSAT numbers or just with them. A brand should consider customized beacon metrics for each delivered CX promise and how it compares to the implemented CX vision.
One of the tools we use at Mindstream takes the following into account as we evaluate CX success with our clients. At reporting and insights levels, the ROI composite reflects if CX:
Customer retention can be applied as a metric as well, as can the level of customer call center feedback and overall voice of the customer (VoC).
CX success is not only the application but also the time aligned in a journey’s success. For online and instore customer experience improvements, those investments can influence the window of time horizon a consumer has before making brand or purchase decisions. The ROI circles back to our earlier statement of identifying the area of financial impact and need within a marketing strategy and improving the customer experience at those impact points. Just as points vary from customer to customer, to brand journeys, the time horizon to influence varies depending on the business model: for retail, that window could be weeks or even months; whereas, for grocery it can be one day up until a week. If data for a year is analyzed, the CX opportunities implemented can start to show themselves and the time horizon impact points evaluated, conversion times optimized, and thus CX architecture improvements with a conversion ROI as a measurable – this can also move that NPS needle.
A cross-channel ROI for CX really comes down to building the right CX architecture for the organization. This blueprint will specify journey touchpoints, brand alignments, and the VoC, all leading to the measures of success for the core company success metrics such as the ease of doing business. By improving these journey points, increased brand engagement and satisfaction levels will come with that, and thus scores and financial returns will as well.
CX is one of those moving targets, and the true sigma of success will evolve as the consumer evolves. It’s important to note that it’s not about nailing a perfect Olympic score or looking at a measure in a vacuum. Successful CX is about hitting the passion points of target markets and being the experience they’re looking for–moving NPS, CSAT, and overall brand engagement levels toward strategic objectives and customer centricity.
Our team of strategists have created tools and approaches that measure customer experience applications with a POV specific to your brand.
The customer is more online than ever, and knowing them and delivering to their expectations has become a must. If you’re looking to better understand the impacts of your current CX applications, or what CX evolution for you could look like, our team of experts is here to help. We would be happy to talk with you, answer any questions you have, and assist with everything from analyses to creative execution to make your brand a success. Contact us.