Customer experience management (CXM) is gaining a good amount of attention from experienced marketers. Today, 55% of Americans between 45 and 55 leverage social media platforms, and 82% of prospects looking for content targeted by specific industry, CXM platforms are increasingly poised transform marketers’ efforts by streamlining their outreach and engagement efforts.
As we explore the ROI of CXM or Customer experience management it is important to fully understand CXM in context.
From one perspective CXM is to an evolution of years of work in the Customer relationship management (CRM) space where the focus on customer relationships has set a good foundation in measuring and managing customer facing organizational activities. As CRM software and capabilities improved, the CXM movement expanded to encompass a variety of cross-channel outreach activities.
There is a temptation in our tech-centric world to label CXM as a platform or a technology. But, in reality, it is a transformative organization-wide strategy that must work across an entire organization to truly be effective. This transformation is empowered by advances in technology, but it is not about the software in and of itself.
CXM considers a strategy to integrate other disciplines including content marketing, cross-channel marketing, social marketing, loyalty programs, demand generation and marketing automation as well as online engagement optimization.
From an executive view, we look at CXM as a cross-organizational initiative that spans all customer touch points. And, this view of CXM provides a broader lens of exploring the ROI of CXM.
In truth, while ROI is the most common metric the C-suite uses to determine the effectiveness of CMX marketing, I am not sure it is the right terminology to use. Instead, I’d like to introduce a few relatively new metrics from the book Return on Relationship Metrics by Ted Rubin and Katherine Rose.
“Return on Relationship™ (ROR)”: Simply put, ROR is the value accrued by a person or brand due to nurturing a relationship, whereas ROI is the simple equation of dollars and cents.
According to Rose and Rubin, “ROR is the value (both perceived and real) accrues over time through loyalty, recommendations and sharing, and is used to define and educate companies, brands, and people about the importance of creating authentic connection, interaction, and engagement.”
With this definition of ROR in mind, it broadens our view of how we define and measure Revenue Metrics into a wider category of “Relationship Metrics” which in turn have huge long lasting impacts on financial metrics for modern organizations.
“Return on relationship™ (ROR)”: Simply put, ROR is the value accrued by a person or brand due to nurturing a relationship, whereas ROI is the simple equation of dollars and cents.
Particularly in CXM, the Return on Experience in your Customer Experience Management includes both the individual experience in a single transaction as well as the sum of all experiences across all touch points and channels between a customer and a supplier over the duration of their relationship.
In my experience, different industry leading organizations have different approaches to gathering customer metrics. For example the Gallup organization measures customer engagement (CE11) using 11 survey questions that represent more than just numerical scores.
Customer metrics from their research provides a deeper meaning, representing some underlying characteristic/mental processes about your customers: their opinions and attitudes about and intentions toward your company or brand
The SERVQUAL method assesses several dimensions of service quality the RAPID Loyalty approach measures three types of customer loyalty: retention, advocacy, and purchasing. It then creates a Net Promoter Score® (NPS) to measure the likelihood of a customer to recommend the company to an acquaintance.
In looking to measure ROI, we must look across all customer touch points to create a model to define customized metrics that map exactly to customer and prospect experiences that drive business results for our clients. We define and set values to these measurable and actionable metrics associated with specific buyer journey experiences. And, ultimately, we work with our clients to net out the custom metrics that provide actionable insights to drive revenue and positive financial impacts.
Customer buyer journey metrics include:
Clearly, we can find a variety of alternative Customer journey metrics in order to measure ROI. While we can map a multitude of custom metrics to our client’s customer journey, depending on their specific business considerations, these the most significant to evaluate the success or failure of your CXM efforts.