Positive Customer Experience: What's the Return on Investment?

01/27/2012 10:44 pm ET | Updated Mar 24, 2012

The Challenge: How do you build a business case for potentially costly changes to improve the overall customer experience?

The Reality: Marketers can expect reluctance to support new customer experience initiatives without proof that the investments will actually pay off. Sentiments like "If it ain't broke, don't spend money to fix it" may combine with old-fashioned organizational inertia and make changes difficult.

Three Marketing Lessons
To prove the value of improving the customer experience:

Lesson #1: The truth is out there. Today's consumer has the power to cause your enterprise pain, or, through "evangelism," raise it to new heights. Among the numerous points of contact with your company, you will find many mishandled "moments of truth," i.e., missed opportunities to improve both the customer experience and your organization's return on investment (ROI). The challenge is to identify these moments... and then quantify how much fixing it is likely to be worth to your organization.

Customers are eager to tell "someone" what those moments are, how to fix them, and what will motivate repeat purchases and advocacy. But they need a responsive and caring department with whom to share this critical business intelligence. The question is, which people and teams in your organization have "listening to customers" across all channels, as a core part of their job description?

Once you know what needs to be improved, what part of the customer experience could turn borderline or dissatisfied customers into motivated advocates, you will know what to measure and, the revenue implications.

Lesson #2: Compare repeat purchasers with other customers. What trends show up? This kind of information often costs little or nothing to track down. As this thoughtful paper from Forrester Research points out, correlating purchase data with other information (such as survey results) can yield some compelling bottom-line conclusions.

"Analysts at Adobe combined historical purchase and upgrade data with survey data and found that customers with the highest feedback scores also had the greatest lifetime values. Differences in lifetime value between customers with the lowest and highest feedback scores ranged from 43 percent among retail customers to a whopping 288% among key business accounts."

Lesson #3: Patiently target the right prospective allies. Building coalitions for organizational change takes persistence, particularly if you work in a large organization. Once you identify a customer touch point that has a dramatic effect on the overall customer experience, keep collecting all the evidence you can that connects, directly or indirectly, to that touch point... and then keep sharing that evidence with the internal stakeholders most likely to be affected by it. Remember that video and audio clips of customers and prospective customers discussing their problems can be particularly powerful motivators for senior executives.

Ernan Roman is president of the marketing consultancy, Ernan Roman Direct Marketing.
Recognized as the industry pioneer who created three transformational methodologies: Integrated Direct Marketing, Opt-In Marketing and Voice of Customer Relationship Research.

Ernan was recently inducted into the Marketing Hall of Fame.

Clients include Microsoft, NBC Universal, Disney, Hewlett-Packard and IBM.

2010-12-08-ernan.jpgErnan was named to "B to B's Who's Who" as one of the "100 most influential people" in Business Marketing by Crain's B to B Magazine.

His fourth and latest book on marketing best practices is titled: Voice of the Customer Marketing: A Proven 5-Step Process to Create Customers Who Care, Spend, and Stay.

Ernan is also the co-author of "Opt-In Marketing: Increase Sales Exponentially with Consensual Marketing" and author of "Integrated Direct Marketing: The Cutting Edge Strategy for Synchronizing Advertising, Direct Mail, Telemarketing and Field Sales."