Customer experience (CX) is increasingly becoming a make-or-brake factor for businesses. A whopping two-thirds of companies across sector verticals are competing on CX, representing a near two-fold rise since 2010. CX simply does not get the attention it deserves because it is not as tangible as say, RoI and other such vanilla metrics. Not being seemingly as straightforward to capture and measure does not diminish its importance- and this message is not lost on businesses with their ear to the ground, which now see this post Covid19 aftermath as a perfect time to adopt this metric and capture the RoI it triggers.
What is Return on Experience (ROX)?
To get a grip of what ROX is all about, it would be worthwhile to revisit good ol’ ROI. Investopedia defines it as a measure of efficiency of an investment- a ratio of the benefit received from an investment to the cost of that investment. ROI continues to rule the roost as the first among equals for metrics that measure the success of initiatives, and even brands in their entirety.
But now, as CX continues to gain traction, there is a new kid on the block- Return on Experience (ROX), which is upending the crown status of ROI. So what is this ROX all about? What it is not, is an instant ratio like ROI. What it is, is the capacity to gauge the real value of personalized customer experiences through outcome analysis and self-improvement loops.
“ ROX isn’t built in a day. Its measures can — and should — be developed over time. Along the way, the organization should be testing hypotheses, gathering data, and building KPIs.” — Reid Carpenter
How does ROX work?
ROX enables businesses (both B2B and B2C) to focus on the networked business ecosystem as a whole. PwC has identified the following five specific elements that are present in any business environment and that constantly push and pull on one another: (1) pride, (2) influencers, (3) behaviors, (4) value drivers, and (5) outcome (see “Building ROX metrics reinforces a virtuous circle and amplifies value,” below).
These elements subsume employee experience (EX) in equal measure as CX. Afterall, employees are internal customers and their experience (EX) together with CX constitute the binary building blocks of the ROX framework. Done right, ROX will trigger a virtuous cycle of benefits mapping into these binary components leading to dynamic optimization of overall performance.
How is ROX different?
Unlike legacy scorecards and KPIs which are siloed and static, ROX is dynamic and pervasive across all business functions. It nicely brings out the interdependencies among disparate business systems and their respective success metrics which feed into the bigger ROX picture. ROX also makes it possible to tie CX and EX investments to the outcomes they enable: strong overall business performance, efficient operational execution, and a healthy work culture that attracts top talent and enhances corporate reputation.
For instance, consider a hospitality business with luxury and budget hotels in the portfolio. Management would stand to benefit by tracking factors enabling reductions in employee churn over time or say, a tangible recognition of service by loyalty members or patrons. The business can then overlay and analyze those measures for their impact on CX factors such as say, guest occupancy metrics or guest acquisition costs.
How to Boost ROX for Your Business?
The following four pointers will help you gauge the expectations of your customers and raise your business’s ROX graph. This goes beyond tracing online journeys and using digital turnkey solutions.
Understand the Behavior — Customer segmentation by demographic data has limited utility value. If you wish to take your customers’ experience to the next level of personalization, you need to take a deep dive into their behavioral and attitudinal attributes that are sentiment specific. The granular insights this provides will help you track how, when, where, why, and thus enabling you to deliver tailored, seamless, end-to-end experiences.
Overlay CX with EX — It is well established that employee experience (EX) impacts customer experience (CX). For any business, employees are proud brand ambassadors. While they are responsible for improving customer interaction, they are at the frontline to gauge the value from the customer’s perspective. Businesses need to map the connectors between culture and business outcomes. Thus, employee involvement is of paramount importance in order to improve your enterprise ROX. It is thus a given that businesses invest in and improve the employee experience.
Create loyalty by planning magic — You cannot let the disappointing moments fly away from your customers. To boost customer loyalty it is important to build some discrete moments which will be long remembered by the customers thus favourably impacting brand loyalty. Putting into place the corresponding ROX measurements to track this loyalty will ensure that the experiences you provide are producing the desired effect. It is not enough to know what they like, but what they love. While customer service is defense, developing “The Thank You Department” to play offense is crucial. Identifying what your loyal consumers love, and executing with the correlated magic moment is the future of hyperpersonalized service.
Transparency, respect and value — Your customers need to feel protected. Hence, when your consumers share their data with your brand, they simply trust you and expect relevant value in exchange. You have to exercise caution in terms of what data you are using and what you are offering. Try to answer these: Is it really required? Will it help you provide value to the customers? Are you using the data in line with their expectations? Answers to these question will not only help you harvest the right data but also lower the cost of data acquisition.
Who owns ROX?
In practice in the case of many if not most companies, ROX lies at the intersection of the roles of the chief marketing officer (CMO), chief information officer (CIO), chief human resources officer (CHRO), chief customer officer (CCO), and chief digital officer (CDO). For CHROs, this is an opportunity to step up in their roles to become architects of EX and drive business performance. CDO is the executive who views herself/himself as the champion of the ROX approach. The immediate priority is the company’s digital transformation, and she/he is concentrating on culture and employee experience as the means of enabling the transformation. CCO is the executive responsible for customer-centric companies for the total relationship with an organization’s customers. This position was developed to provide a single vision across all methods of customer contact. Unfortunately at the moment, the hire is rarely anything significantly impactful for the business.
Key questions the business leaders must ask
How strong is your employees’ emotional connect to your brand objectives? — How big is the gap between knowing the critical behavioral attributes and acting on them? — How much progress are you making in getting your influencers involved with key CX and EX initiatives? — How well are you establishing your value in the eyes of internal and external customers? — How are you measuring improvement for CX and EX initiatives? — How have value-driving behaviors affected your topline and bottomline?
No business has yet mastered the ROX approach, but many are rapidly starting to assemble and develop the core elements. And as ROX gains traction as a preferred success metric, more and more businesses are rethinking their approach to CX, reviewing the interrelationship between CX and EX, and reevaluating the effectiveness of their performance management systems. The day is not far away when investors start asking tough questions about ROX. Unfortunately, a vast number of businesses, particularly the SMEs are way off the mark from measuring any of the ROX components.
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