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Can you measure the ROI on customer experience?

Hague senior is running a customer experience program for a medium-sized company. The program is going well and has attracted a good deal of attention. The other day the finance director of the company met Paul in the corridor and engaged in friendly banter. It went something like this:

“How is the program going Paul?”.

“It’s going well. We have finished the training, started on the implementation and I should be out of here in a couple of months”.

“That’s good to hear. I’m looking forward to some healthy returns on our investment. What do you suppose this will be?”.

“Whoa. The return on an investment in customer experience is huge but don’t expect me to put a figure on it”.

“Why ever not? We measure the return of investment on everything else”.

“I’m sure you do measure ROI on a lot of things but I doubt you do it on everything. I don’t want to be rude but can you tell me the return on investment on your finance department. And, when I arrived this morning I noticed that you have just painted the warehouse. Can tell me the return on investment that will achieve? You may be able to measure the return on investment on a specific piece of machinery or on an advert with a discount coupon, but you can’t measure the return on investment on your CEO – at least not in the short term”.

The mention of measuring the return on investment on the finance department and the CEO must have struck close to the bone because both heads are new to the company. The Finance Director quickly moved on. However, the conversation was an important one because it demonstrated the misconception that some senior people in an organisation can have about spending money on customer experience. There are many things in business where you can measure the return on investment. They are usually investments in something with an easily measured linear output. If you are considering buying a machine and have a choice between one that cost 25% more but achieves double the output, the more expensive machine looks like a good buy as long as you can sell what it produces. (All other things being equal such as reliability, ease of maintenance and so on).

If you improve customer experience through training and investment in more customer service people, it will take time before your Net Promoter Score improves. And how can you be sure that the Net Promoter Score is completely influenced by customer experience? What if deliveries have gone to pot, the reliability of the product is failing, or you’ve just jacked prices sky high?

There are some things in business that are an act of faith and should be there at all costs. Every company has a culture and you can’t measure the return on investment on that; at least not in the short term. In the long term a company with a great culture will do well. As Jim Collins says, get the right people on the bus, get them in the right seats and you can take it someplace great.

So it is with customer experience. Good customer experience is the oxygen of business. A company will be hard pressed to become successful without it. Get the right people on customer experience, tune the customer experience to the needs of the market, and the return on investment will look after itself.


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