It is intuitive that improving customer experience is good for your business. You only need look at your own purchasing habits for evidence. Why do you always get your coffee from the same café? Why do you return, time and time again, to the same clothing store? The rationale seems so simple, yet when it comes to building a business case for implementing a customer-centric framework, measuring how this relates to your business can seem impossible. So, how do you demonstrate the link between customer experience and its value to your business?

Below are 3 steps we have seen play a crucial role in proving the worth of customer experience to get the funding you need to drive a customer-centric culture in your organization.

Decide what characteristics define a Promoter for your business

Initially, you need to identify key behaviours that are shown by the “promoters” for your organization. Think of it as a checklist, whereby if a customer showed all these behaviours, they’d be extremely likely to score you highly on a NPS survey. This could be factors such as likelihood to buy again, lack of churn and referrals, where the most important of these will be specific to your industry. For example, an ISP may consider retention and zero complaints as key promoter behaviours, whereas an online clothing retailer may use total value per purchase and visits per week. It can help to visualise your ideal customer and think about the favourable behaviours they display as a basis for analysis.

It is these behaviours, as displayed by your promoters, that have the potential to positively affect your organization’s profitability. Their loyalty when they make the choice to keep coming back to your product or service drives down your organization’s customer acquisition costs, whilst also stimulating top-line growth. No organization will experience growth if their customer bucket is leaky, and loyalty helps reduce this outflow.

Connect customer behaviours to hard data 

The next step is to link these behaviours with your customer metrics. NPS, one of the most common customer experience metrics, is an excellent source for this. Track back over time and see how your NPS has changed with your customers, simultaneously assessing the behaviours you previously identified. Linking this to key business metrics, such as revenue and customer retention, then forms a holistic analysis of what your customers are saying versus what they are doing. Take the ISP case above. This ISP may look back at its customer satisfaction surveys or NPS data and correlate the common topics and themes that arise in the feedback with customer churn and number of complaints. Assuming they have correctly attributed behaviours to customer satisfaction, they should see a reduction in churn and complaints when their NPS increases, and vice versa. At the same time, they can see how the business performed financially in relation to the NPS, thus linking the customer behaviours to the bottom line.

Whilst this may appear to be impossible, it can be done.

Global network & communication service provider, Colt, have been able to prove a financial link to NPS, establishing that over a 3 year period, one NPS point is equivalent to a share of wallet increase and churn reduction amounting to €8.6m in revenue. By connecting the behaviours of their customers with the hard data, Colt were able to prioritise improvements based on what mattered to their customers most, driving up their NPS and allowing them to invest in doing more of what their clients valued.

Segment & track the value to your business 

Having identified links between customer behaviours, NPS and business performance, you can now break down your data for the most effective analysis. Consider how many of your key behaviours are being displayed by your promoters, passives and detractors. As the ratio of these three vary over your historic data, how does it correlate with your business performance? From this information, you can start to track the value attached to moving  a detractor into a passive or a passive into a promoter, moving from a backwards historical view and projecting it forwards.

“Customers who had the best past experiences spend 140% more compared to those who had the poorest past experiences”. – Peter Kriss, Harvard Business Review

According to Forrester Research, 71% of business and technology decision-makers reported that improving CX is a high priority for spend in the coming years, whilst research by MarketsandMarkets backs this statistic up with data suggesting that the customer experience industry will grown from a $5B industry in 2016 to $17B industry in 2022. To stay ahead of your competitors, it is crucial that you, as Customer Experience Analyst or Head of Voice of Customer, continue to drive the agenda of customer experience within your company.

The three steps above will lay the foundation for a qualitative approach to customer experience. By creating the link between customer behaviours and business value, you draw conclusions on how to implement projects that positively affect customer behaviours that in turn, positively affect your organization.

NPS Customer Experience