Customer Experience is having challenges. Research over the last few years points to a lackluster performance for return on investment.
Unfortunately, the problems are not with the concept of putting the customer at the center of everything you do but instead of people not focusing on the right things and calling it “Customer Experience.” So today, we are going to cover the five rules to guarantee a Return on Investment.
Here are the rules:
- Do your homework.
- Think outside the square.
- Remember, costs are part of the formula.
- Have a Fail-Fast Mentality
- Measure everything.
Let’s take a deeper dive into each of these.
Rule #1: Do your homework.
Ideas sometimes seem good, but they aren’t. Research is how you know the difference. So, my first rule goes along with this concept. You can’t just take things at face value, but you need to dig deeper to understand what your experience provides value for people.
There’s a difference between what customers say and what they do. For example, Disney guests might say they’d like to have an option of salad while in the park, but people don’t eat salads at theme parks; they like junk food. It turns out that Disney guests wanted Disney to find what they really wanted, hidden away in the patterns of their behavior. Our Emotional Signature® research gets under the skin of what customers want, those hidden things.
There’s a mistaken belief, especially among business leaders, that we should trust our intuition or see what our gut tells us about things. Research shows that our instincts are only as good as the training they receive. For example, a pilot who has flown thousands of hours that gets a bad feeling about something going on in the aircraft is probably right. On the other hand, the nervous flyer that hasn’t been on a plane for 20 years and has zero training on an airplane with the same bad feeling is perhaps not.
Your intuition is the automatic part of your brain. But, when you’re dealing with a dynamic field like Customer Experience, where things are constantly changing and new things are coming up, your intuition may be wrong. So, you can’t just rely on that. Instead, it would be better to talk to customers, get outside of your head, and pair your intuition with the power of some actual data to tell you what’s going on.
There are four different dimensions of value:
- Economic: the competitiveness of your prices
- Functionality: the attributes of the product itself or the speed at which you deliver something
- Experiential: the Customer Experience and the perception of it
- Symbolic: the feelings the brand inspires
Therefore, it would be best to understand what drives value under this whole area of doing your homework. Typically, what we find in the research is that what drives value for customers is not what the organization thought.
Rule #2: Think outside the square.
Too many organizations copy what other companies are doing.
Confirmation Bias is the tendency to want to continue thinking the same thing as what we currently believe. So essentially, we like being right, and if something threatens our being right, our first instinct is to explain away the thing rather than adjust what we’re thinking.
One of the problems we have with our Emotional Signature research is that when organizations don’t like the answer they get, they challenge the methodology of our product. Confirmation Bias causes this reaction. Nobody’s brought up problems with the method when we tell them what they want to hear.
Moreover, there is a potential danger of best practices of an inherent convergence. If we all use the same best practices, then we are converging on what everyone else does. Also, it isn’t easy to anticipate what everyone else will do in business. So, if you don’t anticipate quickly enough and then the competition shifts to something else while you are converging on the old way, you are always playing catch up. So, think outside the square and aim ahead of your target to have the upper hand on the competition.
My background is working in corporate life, and I work with big corporations. Something that always surprises me is how slow organizations are to make decisions. That makes it even harder to anticipate changes in the market. So, thinking outside the square and creating tomorrow’s decisions today can help speed up the process.
Rule #3: Remember, the costs are part of the formula.
My first advice for this rule is to get the finance team involved in your project. When I was working in corporate life, I used to get our finance teams to be part of the project teams to align on what financial justifications we needed to make to get our project funded. The finance teams would be able to say what the organization would approve and what they wouldn’t.
Beyond Philosophy has never been involved in a project that hasn’t saved the client money. However, you’ve got to think outside the square. A return on the investment might be the costs you save by investing in this new product or service. For example, if you reduce call volumes by investing in a new way to handle part of your experience, determine how much money not having those calls saves the company.
When we worked with the water utility years ago, we learned that an expensive part of their costs was the field engineer labor. However, we discovered that by investing in the call center, changing the experience a little, and the metrics they were measured by, the employees there could ascertain whether a customer needed a field engineer. The resulting reduction of the field engineer calls by teaching the call center to screen the situations paid for the increases in expenses in the call center, and then some.
Sometimes your costs are easy to compute. Usually, though, they’re not. In response, we tend to focus on the easy stuff, the headline costs of implementation, and we don’t do the homework (rule #1) to figure out the expenses saved by doing this. Likewise, we don’t know the unseen costs that might make this a more expensive project than we thought it would be.
Also, don’t restrict the cost calculation to numerical costs. For example, esprit de corps or employee happiness and motivation are also valuable returns on investment.
Rule #4: Have a Fail-Fast mentality.
Don’t talk about it, do it. This concept is so comfortable to me that I called our company Beyond Philosophy, meaning we move beyond the philosophy and do something. The same concept applies here. So, you have to do your homework. You have to think outside the square. You have to do all the calculations and everything else and to understand the costs, etc. But stop talking about doing it and get out there and do things, even if you fail. But have a Fail-Fast mentality.
To me, this means you’ve got to try something. If it doesn’t work, move on to the next thing or the next version. Look at what customers are doing and employ some of the Behavioral Science principles to modify them. Test what you try, and look for amendments. See what the customer is doing and facilitate those “Aha!” moments where you realize that if you tweak this moment a little bit, it will hit the mark better for your Customer Experience.
When we talk about involved costs like we just did with rule #3, one of these costs that can be difficult to enumerate is the cost associated with risk. Risk is inherent when you implement a new program. There is a chance it is not going to work in the way that we expect. You can mitigate risk by front-loading failure.
If you’re going to implement this program and make all these changes and then roll it out company-wide, and then you’re only going to find out six months later whether it worked at all. You’re putting all your eggs in one basket now. You’re also putting all the risk on this final version of the program.
Instead, you can spot-check it throughout and have opportunities for measuring results as they proceed. Most importantly, you have a chance to adjust because, honestly, everything needs adjusting and tweaking. Now, you’re spreading out that risk out instead of having one big shot while crossing your fingers and hoping that it works.
We also recommend doing things quickly. One of my bosses used to say, “Ready, Fire, Aim!” This phrase was his response to overcome the complex (read: slow) nature of corporate decision-making. He encouraged us to get out there and do things quickly to see if it worked. If it works, he figured, then great.
Rule #5: Measure everything.
It is fundamentally essential to measure the results from what you do with Customer Experience to see if what you are doing is working or not. Also, measuring your progress will show you which parts of your efforts are working and, perhaps most importantly, which ones are not. However, finding out what isn’t work is valuable because it tells you what changes to make. Furthermore, measuring results helps you communicate with the team to gain the hearts and minds of the team—and your boss—for the new effort.
Perhaps even more fundamentally important than all of that is to show progress for the expense. I run a business. If I laid out a bunch of capital to improve something in my bottom line, like a Customer Experience program, I would want to know if it was working. I invest in my business with a mindset to what I am getting back. The same is true for your organization.
The measurement mentality and consolidation of those measures into an organizational message is essential to drive the progress and win over the team’s support. I guarantee if you do those types of things, you’ll get the return you want. More importantly, you will also start to get the reputation of someone that knows what they’re doing and can be trusted to make these types of decisions. By putting all of that measurement in place and empirically proving your success, you show that your choices are not “gut reactions.” Also, you have evidence that your choices were successful.
I cover many significant Behavioral Science ideas in this newsletter and on my podcast. However, my goal is to make them useful. The challenge is figuring out how to take these theories and make them work for your experience. These five rules are bound to get you the return on investment you need for your organization.
By doing your homework and making sure you’re looking for those hidden causes of customer behavior, you will get “under the skin” of these experience opportunities and discover the value you provide customers. When you think outside the square, you open up to more perspectives that collectively create excellent solutions. Remembering that costs are part of the formula will help you focus on what you will get back for the efforts. It can also help you see how your efforts save money. If you adopt a Fail-Fast mentality and move quickly (“ready, fire, aim”), you can see what works and what doesn’t, so you can move on to the next thing if necessary.
Finally, you can then measure your results to create a business case for further investment and increase your credibility as somebody who knows how to run these projects and can get results. That is something that is not only good for your employer’s ROI, but it can do wonders for your bottom-line, too.
