This session will cover key metrics used to determine ROI. It will also cover the type of VOC measurements that can be utilized in any business environment, be it B2B, B2C, or B2B2C. This is a practical approach to CX measurements – less about the mechanics and more about what to choose, how to decide on what metrics to use, and how to build a business case for CX.

1. Developing and Executing Effective CX
Metrics, Measurements and ROI
Bob Azman Erin Washington
With: Moderated by:
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CX Trends for Success

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3. About Bob Azman
Bob Azman is Founder and CXO of Innovative CX Solutions, LLC. He is the 2020 Immediate Past
Chairman of the Board of the Customer Experience Professional Association (CXPA.org). Bob has a
wealth of diverse, global operations and leadership experience as an executive at organizations such
as Carlson Wagonlit Travel, Thomson Reuters, Ceridian and Deluxe Corporation. Bob earned both his
MBA and bachelor’s degrees from the University of St. Thomas in St. Paul, MN. He is an Adjunct
Professor in the University of Minnesota Carlson School Of Management’s Supply Chain and
Operations Management department and a senior guest lecturer at the Rutgers University School of
Business Executive Education programs.
About Erin Washington
Erin went to the University of Georgia and majored in International Affairs with a minor in Spanish. She
gained customer service experience after working as a customer service representative for 2 years. She
now works as an Editor at Aggregage, providing some of the most interesting thought-leaders in customer
experience with a space to celebrate the diversity, depth, and experience of their professional cultures,
personalities, and passions.
CX Trends for Success

4. 4
CX Trends for Success
Webinar Series
This session is intended to be a practical approach to CX measurements – less about the
mechanics and more about why we need to develop effective ROIs for CX investments,
what metrics to use, and how to build a business case for CX. Our discussion is
applicable to B2B, B2B2C and B2C organizations.
Today will cover:
• The business value of CX
• The case for investing in CX initiatives
• The various measurements used to monitor CX results
• How to develop dashboards that cut across all functions of an organization, not
just the contact center
• Connecting the dots
In today’s session we will discuss the ROI of CX.

5. 5
CX Trends for Success
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Something to contemplate…
59

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•Known Knowns
•Known Unknowns
•Unknown Unknowns
What does this have to do with CX Measurements, Metrics and ROI???
According to Sec. Donald Rumsfeld…

7. CX REALITY CHECK
1 Those who somewhat or strongly agree 2 e.g., established dedicated customer experience leaders, optimizing initial projects, extending
program to new channels
Copyright ©2013, Oracle and/or its affiliates, All rights reserved.
The Execution Chasm: Many Businesses Are Stuck in Idle
• Businesses say CX is a top priority and want to be recognized as CX leaders,
but many are just getting started with a formal initiative
Nearly all businesses
Yet… And only…
Wish to be considered a CX
leader in their industry1
Are just getting started with a
formal CX initiative
Consider their CX initiative
“advanced”2
91% 37% 20%
TAKE AWAY Businesses Must Act to Avoid Falling Behind

8. We are now seeing evidence of institutional investors actively seeking out firms with
positive changes in their customer experience.
Why is this important?
Research from the London School of Economics demonstrates that companies with high
Net Promoter Scores (NPS) and relatively low negative Word of Mouth (WoM) rates
grew four times faster than their counterparts.
When customers felt a company had made a mistake, 67% were willing to forgive them
and repurchase if they’d had a positive experience, compared with 9% of those who
had a very poor experience.

9. BIGGEST CX INVESTMENT HURDLES
FACING BUSINESSES TODAY
● Leadership’s emphasis upon short-term results rather than long-term gains
● Lack of defining and measuring customer experience (CX) to demonstrate
the impact on organizational performance
● Navigating the political landscape to gain executive sponsorship
Source: Dr. Phil Klaus 2014, Ewen Duncan, McKinsey 2016

10. WHY IS MEASUREMENT CRITICAL?
We find that companies who
do not measure their
customer experience, or
simply measure the wrong
indicators, take a lot longer
to demonstrate ROI than
those companies who have
the right metrics.
Peter F. Drucker
If you can’t measure it,
you can’t manage it
‘
Father of Management

11. LEADERS VERSUS LAGGARDS
CumulativeTotalReturn
11

12. Revenue Risk Model
Demonstrating Financial Impact with Your CFO and CMO
200,000
Customers
with
Problems
25%
Complain
75% Do not
Complain
50%
Satisfied
30%
Appeased
20%
Dissatisfied
90%
Repurchasing
80%
Repurchasing
70%
Repurchasing
= 2,500
= 3,000
= 3,000
= 37,500
= 46,000Total Customers at Risk
75%
Repurchasing
Source: Customer Experience 3.0: High-Profit Strategies in the Age of Techno Service, John Goodman 2015
Quantifying Risk from the Status Quo
60

13. Revenue Risk Model
Demonstrating Financial Impact with Your CFO and CMO
200,000
Customers
with
Problems
40%
Complain
60% Do not
Complain
70%
Satisfied
20%
Appeased
10%
Dissatisfied
90%
Repurchasing
80%
Repurchasing
70%
Repurchasing
= 5,600
= 3,200
= 2,400
= 30,000
= 41,200Total Customers at Risk
75%
Repurchasing
Source: Customer Experience 3.0: High-Profit Strategies in the Age of Techno Service, John Goodman 2015
Risk with Higher Complaint Rates
and Resolution Rates Combined
Model assumes: $1,000 per customer, $41,200,000 at
risk adding $4.8M to top line net enhanced top line of
$4.8M in revenue and $1.2M profit, which more than
offsets 30,000 more calls at cost of $300k
61

14. Revenue Risk Model
Demonstrating Financial Impact with Your CFO and CMO
150,000
Customers
with
Problems
25%
Complain
75% Do not
Complain
50%
Satisfied
30%
Appeased
20%
Dissatisfied
90%
Repurchasing
80%
Repurchasing
70%
Repurchasing
= 1,875
= 2,250
= 2,250
= 28,125
= 34,500Total Customers at Risk
75%
Repurchasing
Source: Customer Experience 3.0: High-Profit Strategies in the Age of Techno Service, John Goodman 2015
Customers at Risk with
Problems Prevented
Model assumes: $1,000 per customer, $34,500,000 at
risk of saving $11.5M at gross margin of 25%, $1M
spent on prevention gives an ROI of 187%
62

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Strategy statements that are too
vague:
› “… to look out for our customers”
› “We satisfy our customers”
› “… to have a differentiated customer
experience”
Yet before investments can be made…
Your CX strategy must be clearly defined
High performing CX companies have strategy
statements that are clear, aspirational,
and easy to understand across the organization:
› “Reduce churn and increase customer loyalty
over the next 18 months using NPS, Abandonment,
and CLV as our metrics”
› “We aim to reduce inbound calls to our call center
by 3% over the next two quarters by improving
customer self-service on mobile and web”
› “90% of customers’ emails are answered
within four hours”
63

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Companies that took steps to improve their CXi score by 1%
have seen an average gain of .43% in sales revenue
Source: Tehrani, Nash, and Fox, West Monroe Partners 2014 - https://blog.westmonroepartners.com/improve-your-customer-experience-and-grow-revenue/
64

17. Customer Lifetime Value (CLV)
The longer a company can retain a loyal customer, the more profitable that customer becomes
-2
-1
0
1
2
3
4
5
6
7
8
9
10
Acquisition costs
Base
Volume
Cost
Improvement
Referrals
Price premium
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Source: CLV study, Bain & Co
The Compounding Effect
65

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What is the Amazon Effect?
18

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Making the Case for
Investing in CX: A Case
Study
22

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How does a bag of soil reframe CX for a giant
retailer?
20

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Answer: Customer
Experience
But it wasn’t always that
way…
21

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• A simple complaint
about a bag of soil made
it to the top of Home
Depot because it
demonstrated a
commitment to a new
investment in CX at this
retailing giant.
22

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In the Beginning the Focus was on Growth:
Source: Home Depot
The 2000’s real estate boom created diversification opportunities::
• Added Commercial in addition to Consumer Retail
• Rapid store location expansion
• Grow existing store sales
• Doubled EPS to satisfy the
investment community
• Centralized operations to create
efficiency and lower costs
• Staffed stores too little staff with
little if any experience
26
And the ROI result was good on paper but bad in reality

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New leadership
invested in
growth AND
customer
experience…
• Simplification
• Stores focused on remaining in stock, store
appearance, customer service
• No “strategic flavors of the quarter”
• Removed tasks
• 200 weekly reports and emails replaced with 1
single page weekly scorecard
• Put people in the aisles
• Trained to be more helpful
• Hired experienced trades (plumbers,
electricians, etc.)
• Evaluate on effectiveness
• Training & Rewards alignment
It is possible to create value from CX Investments and GROW!

25. 25

26. 26

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• $110.2B in sales. Up 3.5% PY. $11.2B in net earnings vs. $11.1B (FY 2018)
• Earnings per share $10.25 up 5.3% vs. $9.73 (FY 2018)
• Increased dividend 10% to $1.50 cents per share; 11th consecutive year of increased dividend payout; 132nd
consecutive quarter of dividend payout.
• FY 2020 Guidance:
• Sales up 3.5-4.0%
• Share repurchase program of approximately $5B.
• Cash flow of +$13.5B.
• 6 new stores
• 2,291+ stores in all 50 states as well as Canada, Mexico and US territories
• Hiring 80,000 Spring Associates in 2020
• 400,000+ “Orange-blooded” Associates
• 100,000 customer surveys / week
Home Depot Results – Fiscal Year 2019 (02/25/2020)
27

28. 32
32

29. The “Three-Legged Stool”
CustomerTools
Process
People
We need to align and simplify these 3 elements
to maximize the experience
• Link Employee
Engagement to the
customer experience
• Align skill sets;
rewards and
recognition programs;
career pathing
• Provide consistent
processes and
procedures that
make the company
easy to do
business with.
• Eliminate outdated
policies and
procedures.
• Standardize;
consolidate; upgrade
tools, and
technology to
improve delivery of
the experience
• Measure results;
create scorecards;
track customer
interactions

30. MEASURING CX
Multiple Methodologies
©2018 Innovative CX Solutions, LLC

31. Source: Forrester Firms Struggle To Measure Customer Experience Across Channels, Burns, et al
CX METRICS COME FROM
A VARIETY OF SOURCES
Both Qualitative and Quantitative
10%
20%
27%
27%
32%
32%
54%
73%
78%
98%
Other
Point of sale data
Mail surveys
Direct mail response data
IVR analytics
Phone surveys
Call center analytics
Qualitative voice of the…
Online surveys
Web analytics
“Which data sources do you use to generate customer experience metrics?”
Base: 41 CX decision-makers from North American firms with annual revenues of $500 million or more

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Perceptive
Descriptive
Outcome
What customers think and feel about the
experience
What happened
What’s going to happen in the future
There Are 3 Types of CX Metrics

33. 2) Perceptive: how your
customers perceive their
experience
3) Outcome: how it
affects your business
results
1) Descriptive: what you
can do operationally to
improve the experience
Transactions
Accounts opened
Product
registrations
Time on hold
Use of help
function
Task time
Negative social
media
Call hang-ups
Meets needs
Easy
Enjoyable
Actual
outcomes
(e.g., repurchases,
churn rates)
Intended
outcomes
(e.g., likelihood to
recommend)
Right items
available
Key information
available
Help available
Quick order
Clear information
Help accessible
Empathic CSR
Visually appealing
website
Pleasant store
ambiance
CX
Source: Forrester, June 2013, Seven steps to successful customer experience measurement programs

34. Top 100-200: Include in
web survey
Overview of VoC program
A graphic representation of the big picture
Top 10-15 customers:
Conduct phone interviews
Mid-tier & lower
revenue: Include
growable customers,
represent segments
Engage with Customers
Build Customer-Centric Culture
Learn & Gain Insights
MEASURE
CUSTOMER
LOYALTY
Engage
“We’re listening”
Real-time touches
Demonstrate action
Learn Insights
Trends
Bright spots to emulate
Opportunities
Build Culture
Create champion network
Focus on data quality not
scores
Sales in the center
Align on customer
promise
Align Loyalty survey, support survey & project survey
results on a dashboard alongside financials and
employee metrics
Survey

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How do
we
measure
CX?
• Customer Satisfaction
• Customer Willingness to Return
• Customer Willingness to Recommend
• Net Promoter Score
• Customer Experience Index
• Customer Effort Score
©2018 Innovative CX Solutions, LLC

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SatisfactionLOW HIGH
7 8
Extremely
likely
Not at
all likely 10 2 3 4 5 6 7 8 9
1
0
10 2 3 4 5 6
DETRACTORS
9
1
0
PROMOTERS
“How likely is it that you would recommend “Company XYZ” to a colleague or
friend?”
Net Promoter Score (NPS)
PASSIVES
Net Promoter Score is trademarked by Bain & Co and Satmetrix
NPS = % Promoters - % Detractors
= 60 - 20
= 30 - 10
= 20 - 30
40
20
-10
77

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Employee NPS
Exit interviews on the employee experience
SatisfactionLOW HIGH
7 8
Extremely
likely
Not at
all likely 10 2 3 4 5 6 7 8 9
1
0
10 2 3 4 5 6
DETRACTORS
9
1
0
PROMOTERS
“How likely is it that you would recommend “Company XYZ” to
a colleague or friend as a great place to work?”
PASSIVES
78

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“Thinking about your recent interactions with these firms, how effective were they at meeting your needs?”
Didn’t meet any
of my needs
1 2 3 4 5 Met all of my
needs
“Thinking about your recent interactions with these firms, how easy were they to do business with?”
Very difficult 1 2 3 4 5 Very easy
“Thinking about your recent interactions with these firms, how enjoyable were they to do business with?”
Not all all
enjoyable
1 2 3 4 5 Very enjoyable
Calculating Forrester’s Customer Experience Index (CXI) Score
Source: Forrester CXI
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Calculating Forrester’s Customer Experience Index (CXI) Score
Chose
4 or 5
Chose
1 or 2
Net
score
“Meets needs” criteria (on a scale of 1
[didn’t meet any of my needs] to 5
[met all my needs])
82% - 4% = 78%
“Easy to do business with” criteria
(on a scale of 1 [very difficult]
to 5 [very easy])
81% - 1% = 80%
“Enjoyability” criteria (on a scale of 1
[not at all enjoyable] to 5 [very enjoyable]) 75% - 1% = 74%
Example Company: XYZ
Average CXI score: 77
Source: Forrester CXI

40. Forrester CXi (based on a 5-point scale) is a net score
based on subtracting negative from positive percentages.
Metric
Chose
4 or 5
Chose
1 or 2
Net Score
Enjoyable 86% 4% 82%
Easy 82% 3% 79%
Meets Needs 81% 1% 80%
Company A CXi 80
=
=
=
● Comparing Company A to an external benchmark
Enjoyable
Easy
Meets Needs
Forrester’s Customer
Experience Index (CXi)
Excellent
(85 and
above)
Good
(75 to 84)
Okay
(65 to 74)
Poor
(55 to 64)
Very Poor
(below 55)
o Company A has moved to an 80, in the “good” range according to Forrester
o The high end of the scale increased, and the low end decreased, resulting in the higher score

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How do
we
measure
CX?
• Customer Effort Score:
• Measure of dissatisfaction: How much effort did you
personally must put forth to handle your request?
• Geared towards contact centers:
• Exceeding expectations during service interactions
has negligible impact on loyalty
• Service organizations create loyal customers
primarily by reducing customer effort.
• In a service environment: customer satisfaction is
a weak predictor of customer loyalty.
• CES: Measures dissatisfaction at transactional level;
NPS measures it at a relational level.
©2018 Innovative CX Solutions, LLC

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How much do you agree or disagree? [Company] made it easy for
me to handle my issue.
7%
4%
4%
3%
4%
19%
59%
Strongly disagree
Somewhat…
Somewhat agree
Strongly agree
Customer Effort – How easy was it?
82%
Customer Effort Score (CES)
83

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How do
we
measure
CX?
• Customer Satisfaction
• Customer Willingness to Return
• Customer Willingness to Recommend
• Net Promoter Score
• Customer Experience Index
• Customer Effort Score
©2018 Innovative CX Solutions, LLC
Pick One, Please!

44. CONNECTING THE
“CX”
DOTS!
©2018 Innovative CX Solutions, LLC

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CUSTOMER-OBSESSED COMPANIES EMBRACE A BALANCED
SET OF METRICS
› Customer lifetime value
› Customer profitability
› Average order value per
customer
› NPS
› CSAT
› CES
› CXi
› Average call handle time
› Cost to serve per
customer
› Measuring the
employee experience
Financial Customer
Operational Employees
©2018 Innovative CX Solutions, LLC
An end-to-end view of CX Performance
If you’re not going to do anything with the data you collect, then stop collecting
it! I

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• Use the language of the “C-Suite” when asking for investments.
• ROI
• NPV
• 1-3-5-year payback analysis
• Declare and defend your request for funds by specifically stating what benefit will be
derived. For example:
• Improve customer retention by X%
• Increase revenues by X%
• Achieve customer satisfaction of X%
• Avoid “pie in the sky” and work towards “boots on the ground”.
• Provide benchmarks to support your forecasts (other industries; case studies, etc. )
• Create a compelling “story” supported by facts that aligns to the organization’s
strategic vision.
The Language we use is important as well…

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• Take an inventory of what you already know (and don’t know) about your business.
• Establish benchmarks to support investments in CX people, processes and technology.
• Be specific about how investing in CX will impact the performance of the organization.
• Declare and defend your proposals with both qualitative and quantitative data analysis.
• Establish a closed-loop system of data collection to drive action and engage customers.
• Look for champions in the organization that share your passion.
• Use the language of the “C Suite” to present your case for investment.
• Use the Voice of the Customer process to drive the need for continued investments in CX.
• Seek out and celebrate quick wins that build momentum and prove your business case.
• Track and report your progress so you can justify future investments.
Let’s summarize today’s session…

48. What would our customers say about this product,
service, policy or practice?
1
2
?
3
What do our employees think about this product,
service, policy, practice?
What is 1 thing I can do to make a difference in
creating a better customer experience?

49. Q&A
Erin Washington
With: Moderated by:
Founder and CXO, Innovative CX Solutions, LLC
Linkedin page: /in/robertazmanmba
Twitter ID: @innovative_cx
Email: bob@innovativecx.com
Website: innovativecx.com
Bob Azman
Editor, Customer Experience
Update and Customer Contact Central
LinkedIn page: /in/erin-washington1
Twitter ID: @CXupdate
Email: erin.washington@aggregage.com
Website: customerexperienceupdate.com
https://www.customerexperienceupdate.com/webinar-series/cx-trends-for-success/
https://www.customercontactcentral.com/webinar-series/cx-trends-for-success/