An Important Cog in the Customer Experience Management Wheel

Customer experience (or customer centricity) is a concept that is receiving ever-increasing airtime in boardrooms as well as in the media. Customers are starting to demand this from their brands, and it is important for brands to react to this call to arms in a structured way.

In a previous blog article, it was stated that customer experience is a company-wide competence, something that needs to permeate the business in order for the business to be seen as ‘believable’ or ‘trusted’ when they say they are customer-centric. But with so many business strategies, how does one know which are resonating most with the customer and actually drives business goals as well (that goal being sustainable growth to benefit all stakeholders)? Or, do we know what to do on the coalface to ensure we deliver on our strategies?

Business Linkage Analysis is commonly used to achieve this. The general definition for Business Linkage Analysis is well formulated by Bob Hayes (founder of Business over Broadway): The process of linking disparate business data sources together for the purposes of understanding the relationships between them. The primary goal, therefore, is to break down silos within the business by merging data sources in order to generate a more holistic picture.

To better understand this, let’s look at one of the more well-known use cases for Business Linkage Analysis in Customer Experience Management. If we measured intended loyalty through repurchase intent in a survey, we may have reported a score of 67% are highly likely to repurchase. But what does 67% really mean? If the bulk of the 67% are not our profitable customers, or those we spend most of our relationship building activities on, are we really succeeding in our business objective? In short, by linking the score to financial data we are able to report the 67% in context.

Some other useful examples from Bob Hayes are:

  • To identify the more important customer metrics – those that actually drive the business strategy for customer-centricity;
  • Manage stakeholder relationships through operational metrics – making them the sum of continuous action rather than big, bold initiatives;
  • Reward employee behaviour that will drive customer satisfaction – helping the front line staff focus on what they understand to deliver on the strategic concept of customer experience.

These efforts will show short-term benefit and help position customer experience metrics at different levels within the organisation (both at Exco level as well as customer facing level). But the end goal of Business Linkage Analysis should be to pull data together throughout the organisation in order to report holistically on customer experience efforts. In essence, determining the Return on Customer Investment (ROCI) for the company.

Consulta has expanded on a model proposed by Gupta and Zeithaml (2006), specifically on a strategic level. The model interlinks the following concepts:

  • Business strategy – what the business believes it must do to succeed in the market.
  • Business behaviour – what business do based on their strategies. This would be all initiatives that should impact customer experience, given the specific strategies.
  • Customer perceptions – what customers think. The main idea of investing in brand and customer experience is to change customers’ perceptions about your business, in a good way.
  • Customer behaviour – what customers do. When customers start to think differently about your brand and experience, they will also behave differently (either by buying more, being more loyal or vocal, etc.).
  • Business outcomes – the strategic outcomes achieved due to the collective efforts of the business. This is usually measured in financial metrics.

When the Linkage Analysis has been completed on this scale, there are many business questions that can be answered. These questions are all pertinent to the delivery of the customer-centric business strategy:

  • Are our actions impacting the customer? Are we influencing their perceptions about our brand, our product, or service?
  • When customers are more satisfied, are they more loyal? How well does intended loyalty (in terms of repurchase) translate into actual loyalty?
  • Are we achieving the uplift in our metrics due to our actions? Are we achieving sustainable growth due to customer centricity?
  • Which programmes are most effective to deliver on our objectives and should we keep pushing?
  • What is the ideal mix of our investment to ensure the optimal returns through changing customer behaviour?

Linkage Analysis is an analysis framework that allows business to connect the dots. If your business has not evaluated customer experience in this holistic fashion, the time is now to contact us at getresults@consulta.co.za.

Sources:
Hayes, B. (2011). Business Linkage Analysis: An Overview.
Gupta, S. & Zeithaml, V. (2006). Customer Metrics and their Impact on Financial Performance.