The Ultimate Guide to Experience Management ROI: How to Prove the Business Impact of your CX Program

The Ultimate Guide to Experience Management ROI: How to Prove the Business Impact of your CX Program

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The Ultimate Guide to Experience Management ROI: How to Prove the Business Impact of your CX Program

With the ramp-up in customer experience (CX) program investments continuing to accelerate across industries, CX leaders face an existential question: How do we demonstrate the business impact and prove the program is worth the effort?

Though CX leaders know the importance of demonstrating financial impact, 50% aren’t confident in their ability to do so. And the pressure is mounting—more than half of leaders say they have under a year to meet the demands of their executive team and connect CX investments to top-line financial benefits.

The stakes are high, and the urgency is real. To help, we’ve detailed how to define, demonstrate, and sustain ROI for your CX program by combining end-to-end measurement, action-oriented reporting, and industry-validated research methods. This comprehensive guide will help inform your ROI efforts and put you on the right track to demonstrating the tangible impact of your CX program.

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Why most customer experience programs fail to solve the ROI conundrum

Too often, CX programs get sidelined as performance-trackers or diagnostics tools—collecting data that doesn’t appear on a meeting agenda until something starts flashing red. Scores fluctuate, reports get skimmed—but by and large, it’s business as usual. Before you know it, you find yourself on the wrong side of the growing gap between brands that are simply aware of the data and those that are using it to surface insights that drive action and produce meaningful business results.

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To translate mountains of data into actionable insights that lead to tangible business outcomes, every CX initiative you launch must be:

  • Targeted: What is the specific focus of the business case you’re aiming to address?
  • Measurable: How much will the initiative cost, what are the projected benefits, + which KPIs will you track?
  • Data-driven CX programs struggle to prove ROI because they operate in hindsight—using correlation analyses to show retrospective relationships between scores and sales.
  • Insights-driven organizations thrive by leveraging prescriptive reporting to target specific areas for focus and using predictive analytics to go beyond assessing impact to project the specific outcomes that success will be measured against.

anatomy of a true CX insight best practice guide

5 tests: Insights vs. data points

Define ROI for your organization

Proving ROI is more than an exercise in accounting—it’s about aligning CX targets with growth strategies and tactical plans of action. From R&D efforts to behind-the-scenes operations, every aspect of your business influences the customer experience (and vice versa).

In your quest to prove ROI make sure your CX insights are defined in accordance with at least one of these business outcomes:

  • Generate new revenue by attracting more customers, opening new channels, + expanding product offerings
  • Grow existing revenue through increased transactions + lifetime customer value
  • Reduce churn + detractors by lessening at-risk revenue, recovering lapsed customers, + curbing employee turnover
  • Drive operational efficiencies to better serve customers, reduce operating costs, + increase employee satisfaction

When you’re able to demonstrate the causational relationships between CX initiatives and critical business outcomes across channels, proving ROI isn’t a challenge—it’s an opportunity to align cross-functional strategies and build a customer-centric culture.

How to build your formula for success by answering 3 ROI questions from the c-suite

Once you’ve defined ROI objectives and aligned strategies accordingly, the onus is on you to instill confidence in the c-suite that the CX program is built to achieve them. From comprehensive measurement to action-oriented reporting + a research-backed insights framework, be ready to answer 3 essential ROI questions:

QUESTION #1

Is our CX data comprehensive enough to point us in the right direction?

Part of the reason ROI calculations get so convoluted so quickly is a simple case of missing variables. Brands measuring single touchpoints or operating in departmental silos lose sight of the big picture. So, while one team celebrates an uptick in conversion rates + on-site satisfaction, others scramble to address an influx of returns accompanied by overwhelmed contact centers and plummeting ratings + reviews.

To get a holistic view of the entire brand experience, organizations must map out the entire journey—from the customer’s point of view—and capture feedback at every juncture.

That means building an end-to-end measurement strategy that incorporates:

  • On-site, post-transactional surveys using multiple invitation methods so you reach a representative sample
  • Solicited + unsolicited digital feedback from targeted micro-surveys + always-on feedback buttons
  • Contact center measurement solutions that turn service recovery efforts into loyalty-building experiences
  • Online reputation management tools to streamline your approach to responding to online ratings + reviews
  • Brand research + behavioral data aimed at understanding consumer perception, brand positioning, + market share
  • Employee experience feedback from every stage in the employee life cycle—so you can impact the customer experience with employee perspectives

Here’s what an end-to-end customer journey may look like for your brand:

SUCCESS STORY

How Party City enhanced its cross-channel XM strategy to create a more seamless CX

To get a comprehensive read on the entire brand experience, Party City expanded its CX program to include feedback from every point of customer interaction—including in-store visits, digital touchpoints, ratings + reviews, and brand tracker studies and behavioral data. Within months, the retailer increased responses for instore (2.1x YOY) + off-premise (4x YOY) purchases.

With more feedback comes more targeted action, which led to an 8-ppt increase in Overall Satisfaction in a single quarter. As the organization continues to focus on a transformational, customer-centric strategy, it’s no surprise their Q2 2021 results exceeded expectations:

  • Total Sales increased 110.4% versus prior year; Comparable Sales increased 118.3% versus prior year and 19.1% versus Q2 2019 driven by strength in core categories GAAP
  • Net Income of $29.8 million versus a Net Loss of $130.0 million in Q2 2020
  • Adjusted EBITDA of $85.8 million versus a $42.8 million Adjusted EBITDA Loss in Q2 2020

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How Party City enhanced is cross-channel XM strategy

QUESTION #2

How do we translate the data into insights that lead to targeted action?

Let’s say your measurement strategy is on point and collecting high-quality data across every channel. While that’s a notable achievement, it’s not nearly enough. An ROI-centric CX program ensures you’re not just collecting the right data, but also getting it into the hands of the people tasked with acting on it.

And when it comes to something as all-encompassing and complex as the customer experience, those users need an intuitive analytics platform that:

  • Describes what’s happening
  • Diagnoses the root cause quickly
  • Prescribes clear actions
  • Predicts what results to expect

Additionally, to transform CX results from vanity metrics into organizational priorities, you need an end-to-end reporting platform that delivers:

  • Cross-channel views with powerful drill-down capabilities + in-platform report building
  • 24/7 mobile access for regional managers traveling between locations
  • Centralized executive reporting to enable side-by-side analysis of disparate CX + financial data streams
  • Multi-source, AI-native text analytics to surface emerging themes in unstructured data
  • Alerting + case management technology to help you reduce churn + detractors
  • Online reputation management tools to monitor ratings + reviews, engage customers, + drive SEO efforts

SUCCESS STORY

How Signet Jewelers optimized online reputation management to strengthen customer relationships + boost digital presence

Keeping up with fast-paced, high-volume ratings + reviews channels can be a daunting task—but brands failing to manage their online reputation effectively are putting revenue at risk. That’s especially true for high-end retailers, where one bad review can dissuade would-be buyers from even considering a visit.

To streamline its approach and lessen the strain on its labor force, Signet Jewelers integrated ratings + review data alongside solicited CX feedback channels, implemented real-time alerting + competitive benchmarking, and improved search rankings by using in-platform response templates to engage customers who left a review.

Results:

  • + 97% Response rate from contact center
  • + 85ppts Higher response rate than competitors
  • + 44% Uplift in click-to-call + website traffic
  • 1,300+ Page 1 Google My Business rankings across keywords
  • + 235% Uplift in Google My Business customer interactions

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How Signet Jewelers boosted its digital presence 

QUESTION #3

Do we have the expertise to connect CX improvements to actual business outcomes?

A true ROI-generating program isn’t about tracking today’s strategy—it’s about shaping tomorrow’s and ensuring you’re primed to evolve alongside customer expectations + behaviors. The most sure-fire way to future-proof your program and secure long-term investment is to show how it illuminates the right path forward by analyzing how CX results align with market trends, incorporating emerging technologies like AI-based analytics, and connecting every insight to a projected financial outcome.

Unfortunately, time is limited, and even with ramped up investments, most CX teams remain lean. That’s why it’s important not to settle for just any CX vendor.

Seek out a true CX partner that saves you time, money, and labor by offloading daily administrative tasks and delivering:

  • Dedicated support from seasoned CX professionals + advanced-degree researchers
  • Consultative analyses that translate mountains of data into clear paths to action
  • Agile analyses around new brand initiatives, seasonality impact, + pressing research questions
  • Strategic action planning guided by a cross-functional steering committee

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SUCCESS STORY

Krispy Kreme Japan sweetens the customer experience + improves business outcomes

Not getting enough actionable insight from their mystery shop program, Krispy Kreme Japan transitioned to a comprehensive customer experience management solution. The approach quickly paid dividends by showing customers were more satisfied and spent more when front-line employees executed specific service standards.

The brand quickly:

  • Shared monthly results company-wide to enhance employee awareness
  • Implemented scores as a personnel evaluation metric
  • Included scores in evaluations for biannual best location award
  • Used results to advise the development of employee training + success metrics

In correlation with the increase of service standard scores, loyalty measures and comp sales have also improved:

  • + 7ppts Overall satisfaction
  • + 5ppts Intent to return
  • YOY Sales increase

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How Krispy Kreme improved CX + outcomes 

How leading brands transform CX insights into revenue-generating initiatives

Because successful CX initiatives focus on specific business challenges, ROI can (and should) look different for every organization—but the one commonality should be a direct tie from actions to results. Here are 4 short examples that illustrate an outcomes-driven approach to experience management:

Pivoting to curbside pickup as the primary touchpoint amid the pandemic, Tractor Supply Co. revamped communication processes, updated their mobile app to allow customers to check in, + reallocated labor.

RESULTS

3 quarters of triple-digit e-commerce growth + 130% Comp sales YOY

After venturing into the breakfast daypart, Wendy’s used product-level analyses and text analytics to identify improvement opportunities for new menu items.

RESULTS

+ 8% total sales

When a third-party contact center became too expensive and inefficient, CKE automated and optimized its service recovery operations to save time + money and increase responsiveness.

RESULTS

Saved >$900k

When customers cited out-of-stock items when purchasing less than intended, Heinen’s set up real-time Product Availability alerts + invested in predictive analytics software to uncover purchasing patterns.

RESULTS

$250k impact to the bottom line over 3 years

Determine if your CX strategy delivers ROI

ROI shouldn’t be a guessing game. When you track the right metrics, you should be able to predict the bottom-line impact of every action you take. To stop making guesses and start making gains, use our interactive ROI calculator to input your current performance KPIs + determine the potential impact of specific CX improvements for your organization.

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ROI impact calculator

How a true CX partner can help

SMG’s unique software with a service (SwaS) approach helps organizations generate new revenue, grow existing revenue, reduce churn + detractors, and drive operational efficiencies. By delivering insights across the enterprise and measuring experiences at every touchpoint, our unique partnership model includes platform technology and professional services that help clients change the way they do business.

In fact, SMG commissioned Forrester Consulting to conduct a Total Economic Impact™ study of the smg360® CX solution, identifying the real-world ROI our customers can see through their programs. The study revealed how—within just 3 years—clients can see:

  • 551% program ROI
  • $14.7M in total benefits
  • Program payback within 6 months

Chart your path to consistent, sustainable ROI

One of the defining characteristics of organizations that make the leap from being data-driven to insights-driven is how they approach ROI. It’s not just an after-the-fact calculation to justify expenditures—it’s an ongoing process embedded into each step of every customer-centric initiative. From aligning CX metrics to business challenges and organizational KPIs to putting systems in place to track progress, achieve improvement goals, and demonstrate bottom-line impact, it requires an iterative, cross-functional strategy.

Once that shift takes hold, the sky is the limit for your CX strategy.

To learn how SMG’s unique software with a service (SwaS) model can help you build + sustain an ROI-generating CX program, reach out.