Brief 15 Oct 2017

The CXU Student Brief

October 15, 2017

Come learn with us at CX University!

Dear CXU Program Participant:

Welcome to CX University (CXU)! We are delighted that you have entered into a journey with us to develop mastery of the CX discipline. This Monthly Brief will include a Professional Development Corner to share issues pertinent to adult professional development. CX Buzz will report on the latest research or practice in CX. Finally, our Point of View will have the latest thought leadership articles on subjects both provocative and practice enhancing.

Mohamed Latib-Customer Experience Certification Training

Mohamed Latib, PhD, Founder & CEO of CX University

I have had the pleasure of being a full tenured professor, Dean, and VP at various universities. One of the enduring principles that I adhered to in the MBA programs I developed and ran in Europe, Latin America and the US was always to ensure that working adults received relevant and practical knowledge grounded in research.

We are committed to doing so in the program and delivering an exemplary learning experience. We will continuously monitor the landscape of our discipline and immediately make changes we feel will keep our program fresh.

We will be in regular contact with your program leaders for feedback. Be assured of our commitment to making this journey enriching and enjoyable.

Kind regards,

Mohamed

Professional Development Corner

Get Ready for Online Learning!

Today adult learners have many responsibilities. Work, family, friends, sports, community events, and hobbies pull at you from all directions. You probably have worked out a delicate balance between these competing forces. Now you are ready to expand your knowledge of CX and strengthen your career skills. The concept of online learning is very appealing because you can learn at your own pace, anywhere, and at any time. It sounds great, doesn’t it? Your online learning is convenient, but it also represents another demand on your already valuable time. Do not fear; you can learn to manage your CXU coursework while still maintaining the vibrancy of your busy work, family, and social life. Here are a few strategies to help you succeed in your online learning experience:

  • Establish a routine now and stick to it. Pick a time that you can work on your CXU courses. Make sure you have a quiet place to read and study. Log on to the course frequently. Plan on spending 3 or more hours a week completing your courses.  
  • Plan ahead. You know how long you have to complete your courses and prepare for the Customer Experience Specialist (CXS)™ Certification exam. Stay on schedule. Remember, online learning is a more convenient way to learn, not an easier way. Contact CXU at if you need any help.
  • Create a course file for each CXU course you take. Download and keep the syllabus, articles, and playbooks for each CXU course you take. These materials will be useful as you prepare for the certification test.
  • Technical requirements. Make sure you have unlimited access to a computer and the Internet. You will need this access to complete your coursework.
  • Never give up! Everyone has good and bad days. If you need help, ask for it. If you fall behind one week, get back into the course and keep trying.
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CX Point of View Series

Enjoy an exclusive sneak release of CX University’s Scott McCallister and Mohamed Latib’s new Point of View Series: Financial Measurement is Critical for the Future of CX.

CUSTOMER EXPERIENCE WILL BE A FAD WITHOUT A BETTER BUSINESS CASE

CUSTOMER EXPERIENCE WILL BE A FAD WITHOUT A BETTER BUSINESS CASE

Widely used Customer Experience measures provide soft associations with benefits instead of hard numbers on financial investment results.

Part of the Series: FINANCIAL MEASUREMENT IS CRITICAL FOR THE FUTURE OF CX
By Scott McCallister and Mohamed Latib

Over the last fifteen years, many corporations have embraced the goal of creating a superior Customer Experience (CX). The principle is powerfully intuitive – customers that have an emotional attachment to your brand or products will buy more and build a reputation that attracts more customers.

The promise of growth and competitive advantage is so enticing that large investments have been made despite a weak business case for an attractive return. All CX gurus state that a connection to the company bottom-line is important, but few discuss the hard details on how to do that. The current business case for CX rests on weak correlation analyses.

To convince the C-Suite to sustain investment, CX initiatives must show a cause and effect relationship on revenue growth and profitability. Without quantitative evidence, CX principals risk becoming the latest business strategy fad.

Net Promoter Score

The current business case for CX initiatives relies on a correlation between customer survey ratings and company-level growth or revenue per customer.

Net Promoter Score (NPS), the most hyped CX measure, is logically connected to improved financial results, but honestly, has weak quantitative support. NPS is a loyalty metric derived from customer surveys asking, on a ten-point scale, “How likely is it that you would recommend our organization to a friend or colleague?” The NPS is the percent of total responses rating 9 or 10 (Promoters) minus the percent that score 0 to 6 (Detractors).

NPS has a strong pedigree. It was developed by Fred Reichheld, Bain & Company and Satmetrix Systems. Forrester, the major research firm, identified a positive correlation between NPS and company or division-level revenue growth.

Sounds good, except there has been no publication of analysis isolating NPS from other potential growth drivers:

  • Having a superior product
  • Having large and memorable marketing expenditures
  • What about geographic expansion or blunders by competitors?  

It would be very expensive to complete survey samples that are large enough to do statistically significant correlation analysis that can separate multiple explanatory variables. It would also be important to cover a timeframe that matches revenue measures.

Over the years, several CX industry authors have questioned the value of the NPS metric on a variety of grounds. Published evidence of NPS scores driving financial results have made a weak case for major investment in CX. By the way, how many practitioners have measured the percent of customer Promoters that do in fact recommend the product or brand to one or more friends or colleagues? The connection between intention in a survey and action is questionable.

Customer Satisfaction Score

Customer satisfaction (CSAT) scores are captured by surveys usually timed closer to the CX interactions, but responses are usually anonymous so they cannot be directly connected to change in that respondent’s revenue.

CSAT is a broad term that describes many different types of customer service survey questions, the classic being, “How would you describe your overall satisfaction with this product?” Many companies are smart about asking multiple questions to diagnose factors underlying such an overall rating.  Examples are:

  • “How knowledgeable was the representative?”
  • “How many contacts were needed to resolve the problem?”
  • And other questions relevant to the company’s process

This information helps guide improvements. However, when the data source is anonymous surveys of a sample of customers, it is impossible to confirm that the responses fairly represent the broader customer base. Respondents are probably those motivated to respond because they are either highly satisfied or highly dissatisfied. Such biased samples are a weak foundation for a business case.

Changes in overall CSAT scores are commonly compared to changes in aggregate financial results, but these correlations are soft associations rather than hard connections. Most companies have no methodology to confirm that the survey respondents are a sample of the customers behind the change in average revenue per customer.  

Happy customers will logically spend more, but how many customers with average satisfaction spend the same amount? Could the customers who increase their spending have only moderate CSAT scores? Deeper analyses of such questions are needed to build confidence that CSAT scores are significant drivers of revenue.

How to Build the Case for CX

To prevent CX from becoming a business strategy fad, CX practitioners must develop a better business case than has been presented to date by big name research firms. Measures from surveys capture only a small sample of customers, and are generally not directly connected to changes in financial outcomes of those specific customers.  

In a future post, we will offer three types of tests that can be created to measure the financial outcome of CX initiatives. The most powerful approach would be to create a customer-level business intelligence database including internal financial measures. This would allow comparison of actual results over time for customer groups who have had different customer experiences. The impact of CX engagement on individual customers can also be tracked over time. This approach would take customer centricity to a new level.

About the Author: Scott McCallister

We welcome Scott McCallister as CX University’s new VP of Consulting

Scott McCallister-Online Courses in Customer Experience

Scott McCallister is a senior executive who excels at strategic management. He combines creativity and objective analysis to define winning market positions, identify growth opportunities and develop integrated business strategies. Scott is a hands-on leader who establishes strong financial and operating discipline to redefine processes, measure progress and guide profitable delivery of products and services.

In addition to his role with CX University, Scott has worked with entrepreneurial companies as an executive or as a consultant through the firm he founded, McCallister Consulting. His experience includes companies in a range of technology industries including mobile shopping applications, bio-nanotechnology instruments, DNA sequencing systems, information security consulting, telecommunications services, and direct-to-consumer products. Scott also has deep experience with cross-functional problem solving for global organizations. He was a VP for strategy consulting at Cap Gemini Ernst & Young, a partner heading internal strategy at Ernst & Young US and a VP of strategy consulting for Strategic Planning Associates, Inc., a leading international management consulting firm that pioneered the application of advanced valuation techniques to business strategy. He holds an MBA in marketing from the Wharton School at the University of Pennsylvania and a B.A. in mathematics from Dartmouth College.

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2017-11-14T15:35:45+00:00
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