CX Continues to Rank High in the C-Suite But How Can Contact Center Leaders Build the Business Case for Digital Transformation?
Despite the chaos and uncertainty that largely defined 2020 given the pandemic – or perhaps because of it – improving the Customer Experience (CX) continued to rank as the second or first priority among enterprise leaders across sectors.
Frost & Sullivan’s Global Vice President of CX, Alpa Shah, recently published her findings following interviews with top CXOs, and hosted a webinar this week sharing her insights, and assembling a panel of CX experts to weigh in on their journeys last year, and their plans for 2021.
Shah, who has been with the research firm for over 22 years, guides visionary CXOs and IT leaders through the next era of digital transformation with the help of a IT experts and analysts across all industries.
She shared some of the results from her study with webinar attendees showing that while the understandably urgent goal of dealing with COVID-19 pandemic challenges was number one of twelve categories at 42%, she pointed out that improving customer experience and satisfaction came in second at 31%.
Saying that CX has for years been the focus of companies especially as digital transformation activities are underway, and customer expectations are changing, she noted that s55% of respondents reported that their transformation programs were delayed due to COVID-19 related challenges. Only 27% reported they do not have the budget, but 38% said they cannot find solutions available today to augment their business.
Shah posed questions to the panelists (while also polling attendees throughout the virtual event); the participants included Milos Djokovic, co-founder and Managing Director at Eventus, Richa Diwan, Director Transformation Management Office, Blue Cross Blue Shield of North Carolina, Tom Hinds, Vice President, Mastercard, and Patty Drexler, Director of Operations, Allstate.
“Contact centers have become a central foundation for CX programs,” Shah said, “and they proved to be especially so given the uncertain economy. “Still, operators are under pressure to reduce costs while remaining competitive, and this is possible with creative and proven ways to dramatically improve the economics while at the same time improving business outcomes.” This became the main theme for the webinar – finding the right balance and making a clear and compelling business case.
Diwan said “It is always import to clearly identify the need to transform and know what matters to your customer before embarking on new CX initiatives. Make sure you start with the basics, but also include an inspiring moonshot. We ask ourselves, how big is the problem, is it something we can win at, and will it be worth it?”
Djokovic agreed, saying “Make sure you are aligning with corporate strategy. If the business is aiming for growth, CX investments need to tie into that. If the business needs to find cost savings, tie into that. Once you are aligned, create the projects that will move those levers the most, then prioritize those you can implement with the least risk and cost.”
“We want to understand why our customers are calling us,” Hinds said. “Only then can we understand which efforts are worth the lift – which efforts will make the customer journey better. We only invest in projects with a clear ROI – investments in transformational CX must make strong business sense.” Hinds then pointed out that “Most important is data and access to data; how do agents use the data and the knowledge available to answer the questions customers contact us with most? Analytics is also key to get transformation projects started, and not just the traditional metrics but information that can help multiple departments serve customers including product, marketing, and sales.”
“We prioritize how we look at investing by studying the pain points, looking at solutions, choosing the best solutions with the best business case,” Drexler continued. “Successful projects start with the data for us, then a framework. We ask ourselves how we can operationalize transformational ideas. A great question is to ask when embarking on new initiatives is what we should we stop doing to create capacity to deliver on the transformation, so when you are assessing you can we validate what customers want and how it will benefit them. Will they be willing to pay more for better service?”
Diwan described service organizations as having “very complex technology ecosystems. What we did was to break the technologies we use into consumable chunks to find where we were lacking:
- Is our infrastructure solid – IVR, CRM, etc.?
- Do we have the right capabilities and channels – digital self-service, webchat, etc?
- How do we engage with the customer and how does the customer and employee journeys align?
When asked by Shah about the role of collaboration in tackling large transformational CX projects, ever participant agreed that getting buy-in from the beginning is extremely important.
“If the problem you’re trying to solve has not been socialized across various departments, including IT , when you are thinking about a new project or investment in transformation, pull all the stakeholders in and be prepared to make the case, then make the case stronger to financial decision makers together,” Hinds said.
Djokovic recommended that project leaders “Help the company try understand what one point of improvement can mean to the financial performance of the business. Leaders in the company need to understand the direct contribution a CX project can deliver, and one point of improvement can lead to substantial revenue gains and bottom line success.”
Attendees were polled about why contact center projects do not get funded, and the top three out of seven reasons were “Payback period is too long,” “Business benefits are not significant enough,” and “The company prioritizes other projects over contact center projects.”
“Getting people bought in from the beginning is key including somebody from the finance team. If they’ve been on the journey from the beginning, you’ll gain support for your projects,” Hinds said, while Drexler added, “Alignment to the strategy and stakeholder buy in is essential, and so are common goals. A great advantage for us has been having the IT department onboard.”
Djokovic recommended combining CX transformation with other digital initiatives, saying “Find out how you can combine forces. Having the finance group involved early is also critical. It is much better than waiting to share the recommendation after you’ve done a lot of work.”
Shah then explored creative ways to finance large projects creatively.
“We’re seeing an uptake in gain-share models,” Djokovic said. “If a partnering company can fund the initial phases of the project, they can prove the ROI as they implement. There are some complexities in creating gain-share agreements, but we’ve found gain-share approaches makes a lot of sense especially when companies are worried about the upfront risk.”
Hinds agreed, saying “a good example is that you need improve your IVR. You’ll get many vendors coming in to say they have the best solution. One idea is to gain-share on the benefits of improved IVR – even after an A-B test with two vendors.”
“We’ve established internal models of partnering to incubate new technologies,” Diwan said. “This lowers the risk and allows the organization to test the waters. There can be collaboration within the company as well as adopting gain-share models with external partners.”
“Besides risk sharing partnerships in business, there is a consumer model – one that Allstate has embarked on,” Drexler said. “In a shared economy, consumers wish to participate – for example we provide a platform for sharing vehicles parked at airports. “
Hinds said shared cost models work only when they can be quantifiably measured saying “You must accurately measure the metrics and embark on these models with eyes wide open.”
“This is a key area of struggle,” Diwan said when asked about how the COVID-19 pandemic has changed the dynamics of development and budgeting. “Most organizations are building business cases based on operational savings instead of customer experience. Given the pandemic, however, we’ve seen a huge shift – in some cases we’ve seen companies take a ten-year leap! For us:
- Highlight the ROI (growth, retention, AHT reductions, first call resolution improvements) – even then you may have a negative ROI
- Define how the innovation and investment addresses competition – if we don’t do this, will we fall behind?
- Be realistic – if you have an ROI – have a schedule that doesn’t have a cliff. Don’t go from zero to 100 – you need time to materialize the realization of the results – whether it is 25% or 50% improvement first year – be clear on the schedule.
“When you do win a transformative project and you get budget, strongly consider ongoing investment in the platform to continue to drive innovation so you have funding to take advantage of new features,” Djokovic said. ”You will not be measured on 12-18 months improvement – look further out and make sure transformational initiatives are adequately funded.”
Original blog posted on CustomerZone360.
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