To help you with plans for improving customer engagement here’s a blog about measuring the ROI of customer engagement and how much effort should you place on trying to precisely measure that value. It’s effortless engagement which drives happier customers. Less is more. Don’t send your team down rabbit holes chasing every attribution point. Just do it.
The other day I left the gym with that quiet sense of satisfaction that can only be gained from running until your legs can’t move, rowing until your lungs collapse and crunching until you lose the will to live (typically no more than about 3 crunches for me!). Then it occurred to me that I had no way of really understanding the value of that 90 minute investment of my time and energy?! I’m not known for any sort of athletic prowess, my sporting achievements are limited at best and not likely to improve now I’ve hit the wrong side of 40, and to cap it all I’m also not the most slender chap in the room.
With my quiet satisfaction rapidly fading into demoralisation I began to think about more than just my exercise choices. The questions came thick and fast:
- What was the precise value of the time when I reluctantly shut the fridge to escape the glare of a couple of perfectly chilled chocolate bars and instead selected a generous handful of pistachios?
- What was the negative impact the other week when I had [ahem] a couple of beers on a night out at the rugby?
- What about the cost of the weekend where I veered from the couch and a Mad Men box set marathon only to answer the door to Dominos?
I was close to disappearing into a black hole of self-analysis. I had no specific metrics to show the value of each and every one of these and many other decisions that have possibly impacted my health. My health seems ok but how can I know the value of my choices?
It was at this point that I had a bit of an epiphany. In my role as VP Customer Engagement I regularly meet with clients to help solve their business problems by building richer engagement and deeper relationships with their customers. This may be as simple as reducing attrition by understanding and responding to their behavioural footprint across every interaction, or, generating additional cross sales through deep insight of the customer need and where they are on their journey to fulfilling that need. However, there is always a common question that’s asked by almost every client I speak to.
“What’s the ROI”?
So, back to that epiphany. Many organisations are currently embarking on transformational customer engagement programs. Most will look to build their own “total economic impact” assessment to give merit to the program itself but this is no easy task. Available research will show a veritable plethora of metrics that could be used in the assessment ranging from number of complaints and the value of any reduction to number of ‘likes’, net promoter score, customer satisfaction benchmark, cross sales and on and on and on. Bringing together such a vast list of measures to generate a finite monetary value of engaging your customers is not only complex but actually close to impossible due to the added challenge of attribution. The concept of attempting to attribute every performance nudge back to an engagement program alone would twist most brain cells:
- Did every additional sale of our fixed deposit investment account emanate from understanding exactly which customers had an equivalent need or the fact that we were now in the top 3 of most rate charts?
- Did we gain 3 basis points in our C-Sat ratings because we’re customer centric and join conversations up across all channels or because of the new contact centre training program changes?
It’s an attribution challenge that a team of data scientists locked in a cellar for many years would still struggle to solve.
Don’t get bogged down – avoid paralysis by analysis
There are decisions we make that have a very tangible value but also some that would represent a huge attribution challenge yet are undeniable as a set of indicators to general well-being. In life we don’t evaluate our entire exercise regime and diet to the level of understanding how each extra mile ran, or each portion of organic vegetables we eat, contributes to our life expectancy. We embark in a number of initiatives because, quite simply, we feel healthier. That sensory feeling better is then supported through indicators such as energy levels, sick days out of the office and ability to concentrate to name just a few. We don’t need to know if it gives us exactly 10, 12 or 14 ½ additional years of independent living but we know that the ROI will have an attractive minimum value and that without doing it we’ll likely be in trouble.
Transforming to a customer-centric model focused on engaging the customer is the right thing to do and will have an attractive minimum value. On a sensory level the organization will feel like it’s doing the right thing. Existing indicators will provide tangible evidence without attempting to boil the ocean. Measures from share of wallet to unsolicited word of mouth and retention to cost to serve will quickly and easily show the additional value from having consistent and relevant conversations with your customers as they interact with the brand on their terms.
Effortless engagement produces happier customers, but there needs to be a feeling of less effort for you as much as for your customer for there to be a balance of value. Quite simply, if you’re trying to calculate the exact ROI of your running shoes then you’re likely over thinking it. As a famous sports brand puts it; “just do it”.