Assessing the impact customer experience has on the bottom line is a perennial challenge. But, when leaders connect their investments with revenue, CX can gain more sway with other leaders.
Only 4.5% of CX programs have managed to prove the impact of their efforts on revenue, according to a CustomerGauge webinar on Thursday. The event discussed the findings of a survey of leaders at 340 B2B CX programs initially released in August.
Some companies have managed to draw some connections between their financials and CX efforts, but about three-quarters “are completely flying blind” when it comes to measuring revenue specifically, according to Adam Dorrell, CEO and co-founder of CustomerGauge.
“They don't know how much of their revenue they're reaching with their experience at all,” Dorrell said during the webinar. “The cure to that is to really put your book of business in your customer experience system.”
Leaders that connect CX and revenue can use these insights to shape their strategies and keep other executives on their side. The connection can also drive greater insights from a net promoter score by helping them determine what promoters are worth.
Studies have shown excellent CX can move growth metrics like stock market returns and market share. However, it’s up to CX professionals to prove how their work is helping elevate the bottom line.
“If I'm in the hot seat reporting to the board, I want to be able to say what my program is delivering, because running a customer experience program doesn't come for free,” Dorrell said. “You've got the software, you've got the effort behind it, and of course you've got your customers involved in it. Not being able to show a financial return is, frankly, poor.”
The value of understanding impact
Companies that have linked their revenue and CX data are more likely to see results from their efforts.
One-third of companies that connected their CX programs to revenue have been able to show a positive impact from their CX investments, compared to just 7% of companies that have not connected their data, according to CustomerGauge’s research.
One example of how this can happen is when CX teams go beyond just showing that they’ve reduced churn to proving that the reduction is saving money and helping grow the business, according to Dorrell.
Executives from major companies have expressed other ways that CX can help the business on recent earnings calls.
In February, Lyft CEO David Risher credited “customer obsession” for the rideshare company’s most profitable quarter ever. In August, Cava CEO Brett Schulman said a revamped loyalty program and investments in the in-store experience helped drive a financially solid quarter despite the industrywide impact of a cyclosporiasis outbreak.
Connected companies have a leg up in proving the value of NPS, as well.
Two-thirds of companies that link revenue and CX efforts say that they see promoters buy more — about twice the rate of companies that have not connected their CX programs to revenue data, according to CustomerGauge.
That additional business can take different forms, according to Dorrell.
“For example, in research, we find that promoters are twice as likely to buy another product line,” Dorrell said. “They are more than twice as likely to recommend. This is where your money is if you can find the promoters.”
