Wouldn't it be great if you could predict how much revenue you'd be receiving 2 months from now? 6 months from now? A year from now? Finance departments take lots of factors into consideration when trying to make long-term revenue predictions, but often fall short because they're not seeing the whole picture. In this edition of #CXSecrets, I'm going to reveal how measuring customer experience can help companies more accurately predict long-term revenue.
Watch this edition of #CXSecrets above, or click here to download the video transcript.
If you're not measuring the customer experience consistently, it’s like not counting the money that you’re earning every day from your customers, or keeping track of any expenses.
Would you operate your business without a Finance department?
When companies don't have a customer experience measurement program in place, to me it’s analogous of not having a Finance department. Why? Could you ever imagine running your business without knowing how much money is coming in and how much money is going out? No! That would be crazy.
But with the way that we're looking at customer feedback data these days, you'd have to be a little crazy to manage your business without knowing specifically what your customers’ experience was every single day for two main reasons:
1. You risk losing your best customers
If you don’t know what your customers' experience is every day - and when I say “know,” I mean reaching out to your customers via a survey or some other means after each experience - then you don't know whether your best customers are having great experiences. If you don't know that, then you’re at risk of losing those best customers.
Their Customer Lifetime Value going to zero.
That’s extremely painful.
2. You don't know which touchpoints need improvement
Touchpoints are simply ways that you interact with customers. If you’re in the hospitality business, a touchpoint could be your website as customers book their stay, the front desk as they check in, the hotel, the spa, the check out point, etc.
If you're not measuring customer feedback consistently, you don’t know which touchpoints you’re doing really well on, which ones you’re not, and what your "moments of truth" are.
"Moments of truth" are those touchpoints where if you don't do them well, the customer is not only never coming back, but they’re probably going on TripAdvisor or some other social media site, writing about their negative experience, and letting the world know about it.
This is not good.
How does this tie back to predicting revenue?
If you don’t know what your customers' experience is every day, you have no idea what your dollars and cents are going to be in the future. Customer feedback is a leading indicator that will tell you how much revenue you're going to be receiving 2 months from now, 6 months from now, a year from now.
Customer Experience Management (CEM), as it's often called, is absolutely vital for every company to have. It's simply asking customers “how was the experience,” seeing what they said, taking action when needed, and then figuring out what you need to do - we call it systemically or strategically - to change in order to improve the experience of many going forward.
For example, if your customer feedback data indicates that the front desk is slow, then you subsequently change the process so people can get through it more quickly, you’re going to see incredibly higher customer experience ratings and evaluations going forward. That will be a leading indicator for all of the financial outcomes that you may be looking for.
If you have a Finance department, that’s great - I would never recommend eliminating it. But I’d highly recommend having at least half as many people in the Customer Experience Management department (maybe even as many) and you'll be growing your company more than you could ever imagine.
Thanks for joining us for another edition of #CXSecrets, a video series capturing bonus material from my book Listen or Die! The 40 Lessons That Turn Customer Feedback into Gold.
Visit our YouTube channel to see all of the videos in the series, or click the links below to see other videos in the series:
|« PREVIOUS: The Importance of Aligning CX with Marketing|
|NEXT: CX Leaders Shouldn't Focus on Managing Feedback Systems »|
Sean McDade founded PeopleMetrics in 2001 and he is the architect of the company’s customer experience management (CEM) software platform. As CEO, he guides the company’s vision and strategy. Sean has over 20 years of experience helping companies measure and improve the customer experience. Earlier in his career, he spent five years at the Gallup Organization, where he was the practice leader of their consulting division. His company offers CEM software with advanced machine learning solutions and hands-on analytical support to help companies make sense of their CX data. Sean holds a Ph.D. in Business Administration with a specialization in marketing science from Temple University in Philadelphia. He has published eight articles in peer-reviewed scholarly journals and has taught over 25 marketing classes. Sean was named a 40 under 40 award recipient of the Philadelphia region. He is an active Angel Investor, including investments in Tender Greens, CloudMine and Sidecar.
P.S. What did you think of this blog post?