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276: How to Defend Customer Experience Investment to a Skeptical Board · Customer Service Revolution | Customer Experience & Employee Experience for Business Leaders

• 0:59
  Companies spend billions trying to improve customer experience,
• 1:03
  but when budgets tighten, customer experience can be one of
• 1:06
  the first investments questioned.
• 1:08
  A CFO wants to see the return.
• 1:10
  A board wants to know how the investment affects growth,
• 1:14
  profitability, and shareholder value.
• 1:16
  And frankly, they should. John,
• 1:18
  recently we discussed companies like Starbucks and McDonald's and their efforts
• 1:22
  to improve the customer experience.
• 1:24
  Today we're looking at a different question.
• 1:26
  What happens when you're the leader asking for that investment and the board says,
• 1:31
  prove it's worth the money? John,
• 1:33
  we're putting you in front of the board today.
• 1:35
  Are you ready for it?
• 1:36
  Yes, love this.
• 1:38
  right. Has CX created its own credibility problem?
• 1:42
  The American Customer Satisfaction Index reported earlier this year that companies
• 1:46
  spend more than one hundred billion dollars annually on CX related initiatives.
• 1:52
  Yet overall, customer satisfaction has barely improved over the past decade.
• 1:58
  If I'm a board member looking at that,
• 2:00
  why should I approve another CX investment?
• 2:04
  Yeah, so it's it's interesting,
• 2:05
  has C customer experience created its own credibility problem.
• 2:09
  it you know, a lot of it is, you know,
• 2:13
  CEOs and s senior executives think they know what the problem is
• 2:18
  and maybe maybe they hire maybe they do it on their own or to hire a a company
• 2:22
  to do it in the company customer experience consult consulting company,
• 2:26
  Just listens to them and and goes in and fixes what they think is the problem.
• 2:30
  And nine times out of ten, almost ten times out of ten,
• 2:34
  what they think is the problem isn't the problem.
• 2:37
  So a good consulting firm is gonna ask a lot of questions and
• 2:42
  dig deep to really find the underlying issue.
• 2:46
  you know, and now on the flip side,
• 2:48
  you know, companies that don't invest in customer experience are the ones.
• 2:51
  Whose leaders don't understand the financial impact,
• 2:54
  great customer experience can have.
• 2:57
  And again, I'm not sure that's the leader's fault or the company they're hiring
• 3:04
  or the people who internally want customer experience.
• 3:08
  But that's why when we start any consulting project at the DiJulius Group,
• 3:12
  or we're in the proposal phase.
• 3:14
  we make it clear we'll only take you on as a client if we both agree that
• 3:19
  the value you will receive from our consulting agreement is far greater than
• 3:24
  the fees you'll pay. so you know that that that that's that's you know
• 3:30
  now that puts onus on both sides and you gotta dig deep in what that looks like.
• 3:35
  So so for instance, you know, a customer service you know,
• 3:39
  I'm sorry, a client.
• 3:40
  Or a potential client could call up and say,
• 3:42
  We need to hire better. or people just don't get it.
• 3:45
  But when you ask questions about,
• 3:47
  you know, you know, about hiring,
• 3:49
  but what are you doing with them after you hire them and realize that they're
• 3:53
  throwing them out there, realizing they're only training them on the technical side,
• 3:57
  and not the service aptitude skills,
• 3:59
  hiring's not the problem. It's it's what you're doing with it,
• 4:02
  it's how you're preparing them.
• 4:03
  It's you know, you're throwing them out there without
• 4:06
  giving them the service aptitude skills that will make them successful.
• 4:10
  All
• 4:10
  right, so investing in the wrong things is is part of it.
• 4:14
  What about failing to implement them correctly?
• 4:17
  That's everything. And that's where again a a a good project lead
• 4:22
  for the company that works at the company,
• 4:24
  your chief experience officer,
• 4:25
  whoever, and then a good consulting firm is gonna,
• 4:29
  you know, teach them. And and so back to the De DiJulius group,
• 4:32
  we always say, you know, we won't work with you,
• 4:34
  you know.
• 4:35
  unless you have you know these several things.
• 4:37
  First one is that an ROX dashboard,
• 4:40
  return on experience dashboard,
• 4:41
  the specific KPIs, that not every there there's KPIs,
• 4:46
  key performance indicators that are important to measure,
• 4:49
  but they all don't relate to the experience you're giving.
• 4:52
  So every company in the world measures sales growth year over year,
• 4:57
  comp sales, compare it, comparing this quarter
• 5:00
  twenty twenty six to last quarter,
• 5:03
  twenty twenty. No that's critically important,
• 5:05
  but that does not necessarily measure or tie correlate with customer experience.
• 5:10
  If you have multiple locations,
• 5:13
  let's say restaurants, you know,
• 5:14
  and you open a restaurant in a nice area,
• 5:17
  that's gonna boom and you know,
• 5:20
  because it's the the new cool restaurant,
• 5:22
  everyone's gonna flock to it. So the sales or the sales growth in their first three
• 5:27
  years.
• 5:27
  could be higher and have nothing to do with their customer experience.
• 5:31
  It could be, you know, or or, you know,
• 5:34
  negative comp sales, year over year sales.
• 5:37
  It could, you know, be because,
• 5:39
  you know, the there's construction in front of that street.
• 5:42
  You know, there's so many different variables.
• 5:44
  So you got to find the the KPIs that are directly related to
• 5:49
  the actual customer experience for your return on experience ROX dashboard.
• 5:54
  If you could walk into a boardroom with only three customer experience metrics,
• 6:00
  which would you choose and why?
• 6:02
  So it it's really hard because it's dependent on the business model.
• 6:07
  So you have business to business,
• 6:10
  ~ and you have
• 6:11
  All right, so let's look
• 6:12
  at both B to B and B to C.
• 6:14
  Yeah. So a
• 6:15
  again and a B2C, which is typically brick and mortar,
• 6:20
  they have nuances too. So traditional retail,
• 6:24
  you can think of Chick-fil-A, Starbucks,
• 6:27
  Hallmark cards, you know, any of the it's CVS,
• 6:30
  anywhere you go in and buy, they usually don't have a database on you,
• 6:35
  right? When you're just grabbing and and going.
• 6:38
  so that changes. But
• 6:40
  In in typical retail settings,
• 6:42
  you're looking at average ticket,
• 6:44
  number of tickets, obviously comp sales,
• 6:46
  but redoes, refunds, customer complaints,
• 6:50
  yelp scores, mystery shopper, those are all good.
• 6:53
  Now, some businesses, you know,
• 6:56
  in B2B, like a hair salon,
• 6:59
  that's a little different. They you make a anything you make appointments on.
• 7:03
  now you have a database, so then you know,
• 7:06
  earned sales growth, client engagement,
• 7:09
  which I which I'll define a little better.
• 7:11
  you know, you got your MPS C set.
• 7:13
  But and then when you go into B2B,
• 7:16
  which I think all of them, almost 99% now have a database,
• 7:21
  right? You you're buying, you know,
• 7:23
  the business is buying from you.
• 7:25
  So so for
• 7:26
  reference our companies we have John Robert Spa that's a B2C and then
• 7:31
  we have the DJs group which is B2B other our customers are other businesses
• 7:36
  so earn sales growth which is the combination of repeat business
• 7:42
  and referrals that's that's better than anything that tells you everything
• 7:47
  you want to know that's the best KPI you can track
• 7:49
  businesses are still using NPS and customer satisfaction,
• 7:54
  which is on the decline. resign,
• 7:56
  retention, refunds, even in the B2B world,
• 7:59
  customer complaints, average whole time,
• 8:02
  close rate, call centers have that.
• 8:04
  referral source is huge. Client engagement.
• 8:07
  this could be across both businesses,
• 8:09
  but client engagement and people call it different things.
• 8:12
  But whether you're a bank,
• 8:14
  an accounting firm, professional services,
• 8:17
  consulting, you name it. What I mean by client engagement is if you're hiring
• 8:23
  a a business for one thing, all right,
• 8:26
  you know, a bank, you you know,
• 8:28
  do use deposits. you know, you open your checking account and savings account
• 8:34
  and and maybe, you know, you know,
• 8:36
  whatever else.
• 8:36
  But you aren't using them for loans.
• 8:38
  You're not using them for you know,
• 8:41
  car loans, mortgage loans, 401ks.
• 8:44
  That's you know huge because that is drives and even in our business,
• 8:50
  right? We've always seen, and even in the salon business,
• 8:53
  if someone just comes in for a haircut,
• 8:55
  hair services, but they're not coming to us for nails,
• 8:59
  they're not coming to us for spa services,
• 9:01
  waxing, all those other, but they're going other places.
• 9:04
  We have a lower retention rate on them because they're going other places that
• 9:08
  do the same and they might get sweet talk incentivized to try their hair services.
• 9:14
  The DiJulius group, if people only use us for one thing,
• 9:17
  but they don't use us for other services.
• 9:21
  our resign rate is lower than if they're using us for multiple services.
• 9:26
  So any business model, but there's so many,
• 9:28
  you know, it it it it it's very it has to be customized.
• 9:31
  you know, with with with the business model.
• 9:34
  Okay,
• 9:35
  how can you show like actually connect an improvement in customer experience then
• 9:41
  with actual dollars?
• 9:42
  Well, there's a lot of great research out there.
• 9:45
  And so whatever your KPIs are,
• 9:47
  again, you know, re client retention,
• 9:50
  referrals, NPS, all these things,
• 9:53
  whatever earn sales growth, you can figure out what a five percent increase
• 9:59
  in any of those are, or decrease to a dollar amount.
• 10:03
  So, you know.
• 10:05
  A 5% I'm trying to see what the data is on this.
• 10:08
  A Bain and company talks about a five percent increase in customer attention
• 10:12
  can increase a company's profitability by 75%.
• 10:15
  80% of your company's future revenue will come from just 20%
• 10:19
  of your existing customers. So you should be able to do the math.
• 10:24
  And then you know how you do that is if if we retain a customer.
• 10:28
  You could do a lifetime spend,
• 10:30
  you could do annual spend, average ticket,
• 10:32
  you know, another, you know, KPI for like a a brick and mortar is if they come in,
• 10:37
  you know, seven times a year versus ten times a year.
• 10:40
  you know, you you can figure out that.
• 10:42
  So you know, KPI in that for like the salons is if is if we get you
• 10:47
  to rebook before you leave, you're coming in three more times a year.
• 10:51
  Because if you leave a salon without rebooking and then you call in four
• 10:56
  or five weeks when you are due,
• 10:58
  but your stylist, your service provider is booked for the next two weeks.
• 11:03
  Well, now you're averaging you know six to eight weeks,
• 11:07
  which is only seven times a year,
• 11:09
  versus you know, four to six weeks,
• 11:12
  and we pre-book before you leave.
• 11:15
  Now you're coming in ten times a year,
• 11:17
  three more times a year.
• 11:18
  So all those there's a lot of KPIs and you shouldn't have more than three
• 11:22
  or four when it comes down to it,
• 11:24
  but that's where a good consulting firm is gonna help you investigate which
• 11:29
  are the correct KPIs.
• 11:31
  you brought up shopping across channels.
• 11:33
  So coming in for a haircut, but then spending money,
• 11:35
  you know, getting them in for nails,
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  waxings, other services that you offer.
• 11:40
  You know, Torrid backs you up on this.
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  They recently told investors that customers who make a second purchase more than
• 11:47
  double their value. And customers who shop across channels spend more than four
• 11:52
  times as much annually. So I think we've spent a lot of time.
• 11:57
  Asking customers whether they're happy and not enough time measuring whether they
• 12:02
  buy again. So that goes back to your earned sales growth.
• 12:05
  Are they actually buying more and are they actually referring others?
• 12:12
  no, I was just gonna say, how does a company calculate a a small improvement,
• 12:17
  what a small improvement in retention is worth?
• 12:20
  Well, I again that's that's you know what I said.
• 12:22
  You gotta be able to figure out a five percent increase in a certain KPI,
• 12:26
  what or decrease, a swing, what that means.
• 12:29
  So if, you know, depending on the business model,
• 12:32
  you know, let's take the DiJulius Group professional service firm,
• 12:35
  a resign rate. Now, our resign rate on our consulting clients will
• 12:40
  be lower typically than the original contract.
• 12:44
  But we know what the average resign rate is.
• 12:46
  So now, you know, if the average resign rate is,
• 12:50
  you know, $75,000, okay. Now we know if we increase our resign rate,
• 12:56
  let's say our resign rate is, you know,
• 12:58
  50%. If we can increase that to 55%,
• 13:01
  how many more customers is that times $75,000?
• 13:05
  Or if our resign rate, you know,
• 13:07
  that's it going from 50 to 55%.
• 13:09
  What if it went from 50 to 45%?
• 13:11
  Well, that 5% decrease is a certain number of clients that didn't
• 13:17
  re sign times $75,000 is that if that's the average,
• 13:21
  you know, re signed contract or annual spend of a re sign.
• 13:26
  So knowing the difference, you know,
• 13:27
  is huge.
• 13:28
  you know, I think there's also something tied to our companies confusing cost
• 13:33
  savings with ROI, the return on investment.
• 13:36
  Five nine released research last week showing that ninety-two percent
• 13:41
  of consumers give AI customer service fewer than ten minutes before wanting a human.
• 13:47
  And trust in AI more than doubles when a human option is available.
• 13:52
  I think that's interesting.
• 13:53
  John, if a company saves millions by automating customer service,
• 13:56
  but frustrates customers in the process,
• 13:59
  is that really a return on investment?
• 14:01
  No, you have to do the math. you know,
• 14:04
  and and and and and you know, it it goes to a couple examples.
• 14:08
  One we've spoken recently about that people did,
• 14:11
  you know, we all were guilty of changing our business model to pivot
• 14:15
  for the pandemic, but some of those things hurt the business post-pandemic.
• 14:20
  Starbucks, right? They went, you know,
• 14:23
  more to go and carry out and started opening just locations.
• 14:28
  So
• 14:29
  whether it's AI and ordering directly on your app and unless coming into
• 14:34
  the restaurants hurt their business,
• 14:36
  but at the time it it it it was cost effective.
• 14:40
  there's another example for years,
• 14:42
  okay, for the last 20 years, banks,
• 14:45
  you know, started pushing their customers to,
• 14:48
  you know, the apps and website.
• 14:51
  And I've always said I I I
• 14:53
  Other than being a consultant for a bank,
• 14:56
  I don't know if I physically have stepped in a bank as a customer in a decade,
• 15:02
  maybe two, right? why would you ever have to go to a bank?
• 15:04
  You got ATM card if you need cash,
• 15:07
  you know, pay bills online, transfer funds in your app.
• 15:10
  I mean, it's very convenient. So banks started pushing because what
• 15:14
  did that result in? Less traffic in the bank,
• 15:16
  less tellers, you know, less.
• 15:19
  space you can make your bank smaller because you don't have the human traffic.
• 15:22
  however like a bank we're working with right now you know shows their customer base
• 15:29
  and their highest attrition meaning law unretained customers are those
• 15:34
  who only use their bank for you know online digital only they never step foot
• 15:41
  in the bank that's their highest
• 15:44
  that they're their most vulnerable customer.
• 15:46
  They they lose them, the at the highest percent.
• 15:49
  Well well, think about why an app or a website doesn't create
• 15:53
  an emotional connection, it doesn't know me,
• 15:55
  it doesn't, you know, greet me,
• 15:57
  it doesn't ask me how my job at you know,
• 15:59
  whatever you know I'm depositing that that check from.
• 16:02
  It doesn't ask me about my three boys,
• 16:04
  it doesn't ask me if I've you know,
• 16:06
  excited that the guardians were in the playoffs.
• 16:08
  So
• 16:09
  we get all caught up into these cost savings,
• 16:12
  digital only, human less interactions,
• 16:15
  but you know, there's no emotional connection and loyalty to apps.
• 16:20
  So how do we measure that? The the hidden costs of poor service,
• 16:24
  lost customers, repeat calls, customer effort.
• 16:28
  Well, so so you there's we always talk about the PL doesn't show those hidden costs.
• 16:33
  and then they do, but some things they don't show.
• 16:35
  But when you have a poor experience,
• 16:37
  you know, you you're spending more in advertising to replace the lost customers.
• 16:43
  You're discounting more to incentivize people to come back
• 16:49
  or to try to do business with you,
• 16:52
  you know.
• 16:52
  When your customer experience is poorer,
• 16:54
  you have higher complaints. So think about,
• 16:57
  depending on the type of business,
• 16:58
  but if you have a call center,
• 17:00
  you your customer support, what per this is a great KPI,
• 17:04
  there's a great r or x dashboard for a call center.
• 17:07
  What percentage of your calls of people trying to buy from you,
• 17:11
  book appointments versus calling up complaining,
• 17:14
  wanting a refund, wanting a redo?
• 17:16
  That is all, you know, the the the booking an appointment.
• 17:21
  Buying more service and products for you is revenue producing.
• 17:26
  Calling to complain, have a redo,
• 17:29
  get money back, to speak to someone about your poor experience,
• 17:32
  that's all non-revenue producing.
• 17:35
  you know, and and now we got to staff,
• 17:37
  you know, that you know, more people.
• 17:39
  If if if if you can magically make that the complaints,
• 17:43
  redoes, refunds, all that go away.
• 17:46
  And you'll never make them go away,
• 17:47
  but if you could dramatically reduce them.
• 17:49
  Now the staff you have, you might there you save money because you don't need
• 17:52
  as many people because less calls are coming in for the the non-revenue
• 17:57
  or the giving money back. And now you got people that can spend more time upselling
• 18:02
  and booking and all those other things.
• 18:05
  but besides that, what's that like for the morale of your employees who are taking,
• 18:09
  the brunt end of complaints, of getting beat up?
• 18:13
  less referrals, more time spent on service recovery,
• 18:16
  loss of sales, loss of morale,
• 18:18
  which equates to more employee turnover,
• 18:21
  more training, because when you're hiring,
• 18:23
  if you are training them, and then less recognition,
• 18:26
  right? If if if if I'm a regular,
• 18:29
  but every time I walk in, call up,
• 18:31
  or whoever I'm dealing with is a new employee,
• 18:34
  right? I'm not feeling like norm from cheers.
• 18:37
  Right.
• 18:37
  It's
• 18:37
  such a great point because the training and turnover is such a huge expense
• 18:42
  for a company. John, you live,
• 18:45
  breathe, eat, sleep customer experience.
• 18:47
  But is every customer experience investment really worth defending?
• 18:51
  When should a CEO actually reject a proposed customer experience investment?
• 18:58
  Yeah, no. So the answer is is every,
• 19:01
  you know, investment worth no,
• 19:03
  no. A lot of times they're investing in the wrong things.
• 19:06
  again, it goes back to if you can't demonstrate the value received from this
• 19:12
  investment will outweigh, you know,
• 19:14
  what it's costing you, it's it's it's not worth it.
• 19:18
  So, you know, you gotta make sure and and you also have to understand.
• 19:22
  Again, intent versus action.
• 19:25
  I don't care about what you say you're gonna do.
• 19:27
  I care about I don't care if you say you're happy,
• 19:29
  I don't care if you say you're likely to to refer someone.
• 19:33
  there was a study, I think we shared this recently,
• 19:35
  that in one case, Tex University of Texas Tech showed that 89%
• 19:41
  of promoters in NPS
• 19:44
  in in one study said they were likely to refer.
• 19:47
  They gave a nine or a ten, which is promoters.
• 19:49
  Yet only 29% actually did. So that's a that that that's that
• 19:55
  is worthless. Right? We're all pounding our chest that we're leading
• 19:59
  our company or the industry with an 89% know a promoter score.
• 20:04
  But that's fake. that that's not what's really happening when only 29%
• 20:08
  actually do. And then the other example,
• 20:11
  is our our our one of our favorite case studies is is the VU,
• 20:16
  the veteran opt-out for a mortgage company that that serves veterans.
• 20:20
  And the the veteran opt-out in this case the the the mortgage veterans that were
• 20:25
  purchasing mortgages from a mortgage company 15% were opting out before closed.
• 20:30
  Okay so so that's a great
• 20:32
  KPI, but that's the outcome. That doesn't say why.
• 20:35
  So you have to find out why. When and when when we dug in and and and did
• 20:40
  a lot of research, it came because the account executives started ghosting them
• 20:45
  because you know they were working on their pipeline.
• 20:48
  So the the the KPI that you really want to measure there is communicating.
• 20:54
  How often are you communicating with your clients,
• 20:57
  you know, in that example.
• 20:59
  And once we started tracking that KPI,
• 21:02
  their VU dramatically went down.
• 21:05
  And then that was a savings of $1.4 million a month.
• 21:09
  So you you gotta make sure you understand the difference between,
• 21:12
  the the you what you should be measuring and then and what the outcome is.
• 21:16
  All right, listeners, if your organization's struggling
• 21:19
  to connect customer experience to measurable business results,
• 21:23
  the DiJulius Group can help. We help companies build customer experience strategies
• 21:28
  that improve consistency, strengthen loyalty,
• 21:30
  and drive measurable outcomes.
• 21:33
  Visit the DiJulius Group.com to schedule a conversation or just type
• 21:38
  in tdg.click forward slash call.
• 21:42
  Okay, John.
• 21:43
  Why are companies investing in technology without proving the return?
• 21:48
  Gartner reported that customer service leaders invested a median of
• 21:52
  12% of their 2025 budgets in AI,
• 21:56
  yet only 24% demonstrated positive financial returns across their AI use cases.
• 22:03
  We're so quick, right, to
• 22:03
  Yeah, I yeah.
• 22:05
  approve technology investments,
• 22:06
  but so reluctant to invest in the people and training necessary to deliver.
• 22:11
  Those exceptional experiences.
• 22:12
  Yeah, it i it it's just it it's a history that repeats itself when social media came
• 22:17
  out, you know, no I don't know if it was early two thousands,
• 22:22
  late two probably later two thousand well when it became a thing.
• 22:25
  everyone rushed to advertise on social media,
• 22:29
  which was a huge mistake, right?
• 22:31
  You know, you gotta, you know,
• 22:33
  give, give, give, and then maybe ask.
• 22:35
  And meaning, you know, put content out there,
• 22:38
  good content that people
• 22:39
  find beneficial and and and do that,
• 22:42
  80, 90% of the time. And then one build your followers once in a while,
• 22:47
  mention, by the way, we have a great deal.
• 22:50
  But when all you're doing, you know,
• 22:52
  is asking, you know, it turns people off.
• 22:55
  It it's it's it's you know, the email,
• 22:57
  e blast, spam, everyone goes to spam because you're not providing value,
• 23:01
  you're only selling and pitching.
• 23:04
  and this is the same thing. Everyone just jumps on the bandwagon and sees,
• 23:08
  reports that you can eliminate,
• 23:10
  a percentage of your frontline employees or call centers by going
• 23:14
  to self-service and AI. And that's has blown up in people's faces.
• 23:20
  There's a balance, but you gotta you gotta crawl,
• 23:23
  walk and run with it.
• 23:24
  Should
• 23:24
  every customer experience investment come with a financial hypothesis
• 23:29
  and a timeline for proving results?
• 23:31
  And what does that look like
• 23:32
  Yeah, I mean I'm sh.
• 23:33
  for consulting with the DiJulius group?
• 23:36
  I I I I I i absolutely there's there's you you you can almost measure everything,
• 23:42
  but the the companies, you know,
• 23:45
  it's proven in you know, I have the examples in our books and
• 23:49
  in our presentations that I didn't make up that came from studies,
• 23:53
  but the companies that are are are world-class in customer experience,
• 23:59
  there's hopefully I'll remember have have like nine
• 24:02
  they they score higher in these things higher sales growth more profitable less
• 24:09
  affected by third party things out of your control meaning
• 24:13
  the economy wars mortgage collapse they're affected but they're less affected they
• 24:20
  spend less on advertising and marketing higher employee morale right
• 24:25
  and i'm missing a couple
• 24:27
  but it also goes to high employee morale.
• 24:29
  Why? Well, because you're not getting beat up as much as you would at
• 24:33
  a company that doesn't have great customer experience.
• 24:36
  But also, I've never studied a company that wasn't world class,
• 24:40
  a customer experience that wasn't world class to work for.
• 24:43
  So, and then you know, do they get complaints?
• 24:45
  Yes. But what's the difference?
• 24:47
  The great companies like you know,
• 24:49
  a Ritz Carlton or Sandals or a Chick-fil-A.
• 24:52
  They're empowering their employees to make things right.
• 24:54
  So they don't just have to be a punching bag and say,
• 24:57
  sorry, that's our policy. They can they can do something to make it right
• 25:02
  and they feel good about their job instead of going home at the end of
• 25:05
  the night and saying, I got, my ass kicked by,
• 25:08
  a dozen different customers and I couldn't do anything about it.
• 25:11
  All right, here's here's the tough one for you.
• 25:14
  You're gonna ask the board for a million dollars to improve customer experience.
• 25:19
  And of course, the first one to pipe up is gonna be the CFO.
• 25:22
  As he should be, or she should be.
• 25:22
  I can invest
• 25:25
  I can invest that million in sales and measure new business.
• 25:29
  I can put it into marketing and measure leads.
• 25:31
  I can invest in technology and calculate productivity gains.
• 25:36
  Why should I give that million dollars to customer experience?
• 25:40
  And whatever the dollar amount is,
• 25:41
  I know a million dollars, is a lot to some smaller,
• 25:43
  mid-sized businesses, and it's nothing to Fortune 500 companies.
• 25:48
  I don't mean nothing, but it's it's it's it the the dollar amount.
• 25:52
  But there's there's studies, there's one study that talks about the you know,
• 25:57
  should invest in advertising or customer experience?
• 26:02
  And customer experience is you know,
• 26:03
  what that means is training.
• 26:05
  creating great systems, the whole journey mapping,
• 26:08
  all those things. And, you know,
• 26:10
  what the average annual spend in the US on advertising,
• 26:15
  marketing is is five hundred billion dollars,
• 26:20
  okay, on marketing and advertising.
• 26:22
  That's the average, not average,
• 26:24
  that is I think the total spend in the US.
• 26:28
  This is a report from a few years ago.
• 26:30
  And then the average spend and any kind of customer experience,
• 26:33
  customer service, training, and things is nine billion dollars,
• 26:39
  right? $500 billion versus nine billion dollars.
• 26:43
  But but let's you know talk about that.
• 26:45
  You know, what do you get from advertising?
• 26:48
  you know, and and and and you get people who are looking for the best deal.
• 26:53
  the switch to us and we'll give you a free cell phone or your first
• 26:58
  you know visit is half off or you know all these you know you know incentives
• 27:04
  to switch but now you're you're you're attracting customers who are just looking
• 27:08
  for the best deal and are gonna leave you for the best deal.
• 27:11
  we always say there or I always say there's three types of of of leads.
• 27:16
  There's cold, warm and hot.
• 27:19
  Cold means I'm calling you saying,
• 27:21
  do you need whatever I'm selling?
• 27:23
  you don't even know you need it.
• 27:24
  You don't think you need it. You might not need it.
• 27:26
  So what the are you price sensitive?
• 27:28
  Yeah, it better be the most unbelievable deal ever for even to consider
• 27:33
  me coming to replace your roof or,
• 27:36
  you know, power wash your your your your driveway and house,
• 27:40
  blah blah blah.
• 27:41
  Then you go to a warm lead. Warm lead is,
• 27:44
  they Googled us or they saw our billboards or that all right.
• 27:47
  So so that's great. That's a warm lead.
• 27:49
  They're coming to us. But if it was from advertising,
• 27:53
  they are going to, they're also shopping you against the four other people that
• 27:57
  showed up in their Google search and what have you.
• 28:00
  again, you better have the best,
• 28:02
  you know, price. And then the hot lead is.
• 28:06
  Six people told me you're the best at what you do.
• 28:09
  My neighbors have used you for years and say you have to use it.
• 28:13
  You need a power washer, you need someone to clean your house,
• 28:16
  you need, you know, a hairdresser,
• 28:18
  you need an accountant. You have to use them.
• 28:20
  So a hot lead is prices irrelevant.
• 28:23
  They want you. They're not calling anyone else.
• 28:25
  And then you also on those three columns is the sales cycle,
• 28:29
  you know, how long it takes to close.
• 28:31
  Cold, you may never close.
• 28:33
  Warm, it's going to take longer because you're up against three,
• 28:36
  four other brands. Hot, you know,
• 28:39
  they're they're saying, I want to work with you,
• 28:41
  or I've worked with you in the past and I need you again.
• 28:43
  So, but advertising versus you know investing in customer service,
• 28:47
  repeat customers spend more money than new customers.
• 28:51
  kind of what you sourced. Repeat customers have higher satisfaction scores.
• 28:57
  Repeat customers refer more than new customers.
• 28:59
  So in one study, it said that.
• 29:01
  You need to get five new customers this month
• 29:07
  to do what one repeat customer would do.
• 29:11
  So we're so hell-bent on advertising,
• 29:13
  advertising, advertising that you know,
• 29:16
  I think you know that that demonstrates.
• 29:19
  And now you obviously got demonstrated to the business model,
• 29:22
  the CFO, and that's where the return on experience dashboard does what
• 29:26
  it does for you.
• 29:27
  I'd be curious to know what five star businesses spend
• 29:32
  on advertising versus customer experience training.
• 29:36
  And we have all that in our in our usually it's the first chapter of every book that
• 29:42
  talks about those comparisons and the correlation.
• 29:46
  Companies outperformed their competition by significant results.
• 29:50
  But then they even did it from 2008 to 2010 during the Great Recession,
• 29:56
  was it called? Yeah. and while the majority of businesses were double-digit negative
• 30:03
  in sales growth, the world-class customer experience companies
• 30:08
  in every industry were were negative single-digits.
• 30:11
  They're still negative.
• 30:13
  But it you're always so much less affected by things when you have great customer
• 30:19
  experience.
• 30:20
  All
• 30:20
  right, finally, if a leader has a board meeting in 30 days and they want
• 30:25
  to get they want to get some money in the budget for customer experience,
• 30:31
  what three things should they bring to that meeting to get the investment approved?
• 30:36
  So, it goes back to our initial questions.
• 30:38
  Depending on the business model,
• 30:40
  earned sales growth is number one to me.
• 30:42
  if your business has a database and contract where customers come from,
• 30:47
  repeat. So earned sales growth,
• 30:49
  you have you know two two two types of sales.
• 30:52
  You know, if did a a million dollars last period,
• 30:55
  whatever that means, quarter, week,
• 30:58
  month, whatever, you know.
• 31:01
  They they come from two places,
• 31:02
  bought and and earned. Bought is advertising.
• 31:06
  Earned is I've done business with you before,
• 31:09
  I want to do business with you again.
• 31:11
  And or different, you know,
• 31:14
  more client engagement. I want to use you for additional services than just
• 31:18
  the one I'm using you for, and then referrals,
• 31:21
  right? And that's the both re repeat and and and referrals fall under.
• 31:27
  earned sales growth. That that to me,
• 31:29
  if if the business model supports it,
• 31:31
  is the number one KPI that we should be tracking.
• 31:35
  Not only as a company, as a as a department,
• 31:39
  as a location, but also individually,
• 31:42
  if you have salespeople, if you have accountant executives,
• 31:44
  you have lawyers, you have hairdressers,
• 31:46
  you have consultants, we they should know their individual earned sales growth.
• 31:52
  And I think they should be rewarded on it.
• 31:54
  When it's higher, they can get a higher commission or or bonus
• 31:58
  or incentive because if if you know consultant A or lawyer
• 32:05
  A or accountant A, you know, their earned sales growth is in,
• 32:09
  you know, 20%. and then you know,
• 32:12
  B consultant is in the 70%. Well,
• 32:15
  it's costing you know that business a lot of money.
• 32:18
  To drive customers to keep consultant A busier than it is for consultant B.
• 32:25
  Consultant B is creating their own business by repeat and referrals.
• 32:30
  So you can reward people based on their earned sales growth.
• 32:34
  But, you know, and then it goes back to all the other KPIs we did,
• 32:38
  but that would be my first one.
• 32:40
  It's hard just to say the other two because it's so dependent
• 32:43
  on their business model.
• 32:44
  But we've given a lot of examples in.
• 32:46
  I think, if you can, Denise, maybe put the ROX dashboard worksheet as
• 32:52
  a a download or a a recent blog or podcast that references it.
• 32:57
  But that ROX dashboard that we use,
• 33:00
  the DiJulius Group uses when we start working with a consulting client,
• 33:04
  that's our first meeting, and we don't go on to the next.
• 33:09
  thing until we help them create what those four to six KPIs
• 33:16
  are that we're gonna measure that correlate specifically to the experience.
• 33:20
  And so that's a great exercise because it'll list everything we've probably talked
• 33:25
  about. And then you put a you know a a one,
• 33:28
  two, or three next to it, like client retention.
• 33:31
  Are you already tracking it? One.
• 33:34
  can you track it but you're not that's a two a three is we we currently can't track
• 33:40
  it but we need to it's important so that's a three and then and and and
• 33:44
  a is doesn't apply to our business model.
• 33:46
  Does the ROX dashboard have a way to tie dollars to it as well?
• 33:50
  So they could see.
• 33:51
  Yeah, that's exactly what it does.
• 33:52
  so
• 33:53
  in the New Day example, their VOO is,
• 33:57
  you know, their one of their key things in their ROX dashboard.
• 34:01
  And so, you know, for every one percent monthly of a VU,
• 34:07
  it it was two hundred thousand dollars in loss of revenue.
• 34:11
  So when we were able to help them take it from fifteen percent to eight percent.
• 34:16
  That seven percent in savings was $1.4 million in additional revenue.
• 34:21
  So obviously that CFOs, you know,
• 34:24
  that will pay for your customer experience investment ten times over for the year.
• 34:30
  Yeah. So maybe the real question isn't whether we can afford to invest
• 34:34
  in customer experience. It's whether we've calculated what our current experience
• 34:39
  is already costing us with lost customers,
• 34:41
  lost referrals, higher turnover costs,
• 34:44
  employee turnover, missed opportunities for growth.
• 34:48
  The strongest customer experience business case isn't built on
• 34:51
  how much happier customers become.
• 34:53
  It's built on what changes financially when customers choose you.
• 34:57
  and stay with you and recommend you.
• 35:00
  So let's include the ROX dashboard in the show notes.
• 35:04
  And listeners, take a look at that,
• 35:07
  download it, fill it out, bring it to your next meeting and figure out what
• 35:12
  you can invest in customer experience,
• 35:14
  what you should be investing.
• 35:16
  Thanks for listening to the Customer Service Revolution.
• 35:18
  You can find us wherever you listen to podcasts.
• 35:21
  Thanks so much, John, for bringing so much to the podcast today.
• 35:25
  We appreciate it.
• 35:26
  Thank you, Denise. Thank you, revolutionaries.