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Companies need a holistic understanding of the returns of a CX and EX program to take the contact center off the defensive and make it futureproof. Determining a Return on Experience (ROX) helps you show the rest of the organization that you are running a value center, not a cost center.
We so often get the question to “prove the ROI” of CX. Of course this is important, but maybe we should first answer the question where we actually look for that ROI – or Return on eXperience (ROX) as we now like to call it.
To answer this question, we need a holistic approach. What do we mean by that?
Look at the typical ROI calculation which is very sales oriented – “how much more did we sell by investing some extra money in the contact center?”
Or it is purely cost oriented – “by how many seconds did we reduce the Average Handling Time.
Is either of these numbers customer oriented? No. And even worse, both are short term KPIs that actually damage the longer-term customer value.
As a first step it is worth reviewing what KPIs your organisation is using – for the contact center or for the whole organization – and whether all of those KPIs are customer focused, or customer damaging.
So let us look at a much more sustainable, holistic approach, that looks at all the benefits that a ROX approach brings. First of all, the holistic approach is about bringing together Customer Experience and Employee Experience.
Calculating the value of Customer Experience
I have written more articles about this topic, and given various webinars about it. Lets summarise it as follows:
We want to sell more, to more people, for higher margins, for a longer time. Each of these parameters we can measure and influence. What is missing in most calculations is the value of recommendation – the new customers brought to me by my truly happy customers.
Secondly, we want to look at cost reductions I can create through CX. This starts from the simple fact that less unhappy customers obviously mean less interactions in the contact center, to reduced call times for customers that are generally happy, versus those that are irate. At one of our mobile operator customers the difference between these two categories was € 4 vs € 13 per year. With millions of customers this adds up. This does not even include the cost savings for less hand-overs to other departments, as the times spent in back-office departments on supporting 1st and 2nd line is usually not even calculated.
Thirdly, to create that truly holistic view, we need to look at the employees, primarily the agents in todays case. While it is often said that happy employees lead to happy customers, I’ve had a hard time finding proof for it. However, we can with certainty say that unhappy employees are in a very bad position to create happiness with your customers. And what is also true is that the happiness (and therefore behaviour) of your customers has a direct impact on your employees. And unhappy agents cost money. They create unhappy customers leading to less customer value, but they also tend to be less efficient.
We know that contact center workers churn twice as fast as others – what gain do we get from reducing that? The cost of recruitment and training is substantial.
So how do we make sure our agents are happy? What motivates agents is mostly not even monetary. It is about feeling at home amongst the colleagues, about feeling valued and having opportunities to be promoted, and indeed not being shouted at by customers and other stress-inducing elements.
To put it very simple - when we say to take a holistic view of ROX, this is what we mean – by combining CX and EX into ROX, we create a virtuous cycle of increasing revenue and reducing cost, through happier employees and happier customers.
And this is the calculation sheet you can use: