The Holy Grail of CX in the C-Suite
Various traditions describe the Holy Grail as a cup, dish, or stone with miraculous powers: providing eternal youth, or sustenance or infinite abundance. I can’t help but associate it with the 1975 British comedy film Monty Python and the Holy Grail, a spoof tale of knights and magic in Arthurian times. By analogy, any elusive goal of great significance may be perceived as a Holy Grail by those seeking it.
The Holy Grail for CX support in the C-Suite is return on investment (ROI). Executives will need a clear vision for a cohesive customer strategy that aligns around their strategic goals but they will also need a success measurement that quantifies payback expectations.
The universal language the C-Suite speaks in financial performance. In a swirl of competing priorities, executives often weigh a never-ending stream of requests against payback expectations or return on investment (ROI). Does it align with our strategic priorities and what is the expected return? Metrics are what they live, eat, and breathe; data supporting the anticipated return provides them with more objectivity around which competing priorities to endorse.
If you want to make the case for customer experience, you better prove the ROI.
Ok…it’s one thing to be enlightened that the trading currency is ROI and another to get your hands on it. As a CX practitioner for over a decade, I struggled to find financial metrics that compelled leadership to elevate our CX efforts to the top of the list. There simply wasn’t a lot of research on the topic.
Fortunately, I discovered an eye-opening study back around 2012 that quantified the ROI of CX, the “Customer Experience ROI Study” conducted by Watermark Consulting. The annual study is still very much alive and just as compelling as ever. Now in its 13th year, it compares the stock performance returns of CX leaders vs. CX laggards. A decade later, the data still tells a powerful story that’s hard to ignore.
CX leading companies posted a total shareholder return that was more than three times that of CX laggards and they outperformed the broader market by 100 percentage points (as represented by the S & P 500).
Jon Picoult, whose new book, “From Impressed to Obsessed, 12 Principles for Turning Customers and Employees Into Lifelong Fans” (a must read for CX Pros) includes the updated version of the study. According to Picoult, “This is the exclamation point on the case for customer experience. The companies in the CX Leaders portfolio are enjoying all the benefits of the ‘loyalty lift’ described earlier: higher revenues, better controlled expenses, increased profitability. The performance of those in the CX Laggards portfolio is weighed down by just the opposite: anemic revenue growth, higher expenses, and weaker profitability.
The Watermark study makes the macro case for what we know intuitively…organizations that deliver consistently outstanding experiences get rewarded by their customers and the data supports it.
External studies like these should eventually compliment internal ROI metrics (that’s a conversation for another time).
One message I would tell my younger self is to beware of the ‘curse of knowledge’ when it comes to talking the language of the executive team. For us CX professionals, it’s easy to forget that others need convincing. It’s easy to forget that influencing executives is never a “one and done” but rather it looks more like a drip marketing campaign.
From my experience, sharing the ROI of CX will need to be a constant drumbeat. Some will simply need multiple reminders because it’s the way they think. To that end...
Next time, I’ll feature another new study that also proves the ROI of CX. The findings not only provide empirical evidence of comparative results of CX leading organizations, it also challenges the findings of a management icon.
Mark Slatin is the CEO and Founder of Empowered CX, where he helps companies accelerate their path to scalable growth by delighting their customers. Mark has the real world experience of leading a multiple award-winning CX practice from launch to maturity. He is a Certified Customer Experience Professional (CCXP) and currently serves on the Board of Directors of the Customer Experience Professionals Association (CXPA). Learn More >
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