Going Beyond Efficiency to Customer Experience in Your Next Technology Upgrade

The big payoff for the company is leveraging tech for more problem prevention, proactivity and empowerment, not service efficiency.

I was recently asked to review a forecast of technology trends and innovations for a major industry association that was executed by a leading benchmarking firm. The assessment reviewed everything from digital connectivity and RFID to artificial intelligence and blockchain and included case studies from industries ranging from supermarkets to airlines. While, at first, it seemed comprehensive, it hit me that the benefits cited were almost all efficiencies, with a few fuzzy references to enhanced performance. The impact of technology on the customer experience (CX) was missing from the assessment. Ironically, the biggest payoffs for the companies would be the CX benefits.

In many companies, cost-cutting is king. Lip service is given to satisfaction and enhanced loyalty. Managers in many companies are almost embarrassed to cite enhanced satisfaction and loyalty because they are convinced that Finance will not give such benefits any weight. If designed and implemented correctly, technology provides a bigger payoff through enhanced loyalty, margins, word of mouth and engagement. Much of this function is what I call delivering psychic pizza, e.g. I ring your doorbell and say, “Here is the pizza you were about to order!” Amazon and Intuit are examples. My experience is that less than one-third of vendors understand the CX side of technology impact.

Metrics for Quantifying the CX Impact of Technology Tools

Technology affects CX in a myriad of discrete ways. Examples include proactively confirming transactions (purchases, charges, and deliveries), notifying of problems and changes (delays and short shipments), empowering CSRs via knowledge management systems (KMS), educating on avoiding problems, and just-in-time (JIT) training on using additional product functions and aspects. Service and marketing executives who want to invest in these functions can estimate their impact on loyalty, satisfaction, problem rate, positive word of mouth (PWOM) and sensitivity to price. Vendors selling technology who provide case studies illustrating these impacts with quantified metrics will have a much more powerful business case for customer purchase.

A tech assessment that is only inwardly focused is seriously deficient. The impact on CX should be a critical component. The following chart provides key metrics of tech CX impact along with the operational and financial impact metrics. Ease is the omnibus metric for being easy to do business (ETDBW) with which is highly correlated with value for the price paid.

Eight Quantifiable Areas of Tech Impact on Customer Experience

Getting Finance and the COO’s attention

The most successful pitch for investment in tech includes the quantified impact on customer-focused operational metrics across the customer journey including:

• Problems prevented by proactive communications (sales and onboarding are great places for preventive education)
• Contacts about status (in most companies, 30% of operational contacts are about status)
• Reduced calls on “how to” via customer education, which also enhances ETDBW
• Enhanced ease of resolution in terms of resolving complex problems e.g., the auto company found out-of-warranty issues were much easier to resolve because educated customers feel treated fairly (the customer accepted responsibility) resulting in higher retained loyalty
• Less frustrated employees due to fewer repetitive, preventable problems
• Actionable VOC which has measurable process impacts, e.g., streamlines processes and makes company ETDBW
• Fun and delight enhances social media and PWOM as well as increases loyalty due to enhanced value
• When customers and employees believe the company is listening, they give more frequent feedback and input resulting in stronger bonds and a more effective VOC process

Translating operational metrics to financial impact includes:

• Reduced problems translate into reduced external damage, e.g., less revenue loss due to disloyalty and lost sales from negative WOM – for every five customers who no longer encounter serious problems, one is retained who otherwise would be lost
• Reduced problems translate into reduced internal damage, e.g., less time handling preventable issues and lower employee frustration leading to lower service cost and lower turnover among good employees
• Reduced problems translate into reduced sensitivity to price, e.g., ability to charge more if there is perceived superiority in quality and ETDBW
• Enhanced delight translates into enhanced loyalty and PWOM – customers won via WOM are 25% more valuable and marketing costs are dramatically less
• VOC creates accountability, provokes action and moves the needle on specific issues

Take Action Now

For CX, service, quality and marketing executives being pitched technology , ask about satisfaction metrics and impact on problem prevention, customer education, proactive service and enhanced response capability for thoughtful customer engagement.

For Tech Firms selling technology , focus your pitch on the revenue payoff of problems prevented, higher margins earned from proactive service and the delight and PWOM resulting from enhanced engagement.

Summary

Operational impact can be translated into revenue-oriented market actions. Service and CX technology buyers should demand examples of tech impact on customer problem prevention, proactive response, education, enhanced resolution and ability to be proactive. The company insights staff should assist in evaluating the vendor-presented data.

Technology vendors should avoid pitching functionality and alternatively focus on CX solutions. Examine the customer journey to identify opportunities for customer problem prevention, education, proactive communication, engagement, and delight. The key is to quantify the CX impact on the customer and her loyalty and PWOM.