Latest / From Stalled to Scaling / The Sentence That Wins the Budget
Transcript
- Jim Tincher, HoC: Most marketing, customer experience, or other growth leaders, you know they lose the budget conversation before it starts. And it happens in one sentence. We improved our net promoter score six points. I'm Jim Tincher, and this is from Stalled to Scaling. Eight-minute ideas for B2B leaders on growing through the customers you already have. This is not a rant against Net Promoter Score. It's instead helping you think through how do we win the budget conversation? So when your chief financial officer hears that Net Promoter Score got better, she hears a number that she doesn't know what to do with it. She can't forecast with it. She can't compare it against any other request for capital, can't defend to a board. You know, this company's this request for funding is going to drop costs by, you know, X amount of money. This one's going to give us a better score. She can't defend that to the board. So what does she do? Well, really, the only choice she has, she puts the whole thing under overhead. Now let's be clear. This is not her being hostile to customers. This is doing her job with the number she was handed. The score is not wrong. Net Promoter score, it's a real measurement of a real thing. It just doesn't behave like any of the other numbers she works with. Every number that she works with has to behave the same way, or she can't add them up. I thought about this after reading this great article by Michael Kaminsky in the Harvard Business Review. And it was about marketing measurement and aligning the CFOs and CMO's dashboards. His diagnosis is that chief marketing officers have among the shortest tenures of the C-suite because their metrics don't connect to the outcomes finance cares about. Now he talked mostly about marketing and pre-sales type, like hits and other pre-sales type metrics, but it's true about customer experience, right? He's right about the diagnosis, and I want to go a little a little bit further than his cure. His answer is to forecast spending better. Your tighter attribution, ranges instead of single estimates, shared planning meetings to build the credibility. But notice what that concedes. You're still defending a spend line. Done well. It does help. It makes you a better argued cost center. But in B2B, hey, we've got something better. There is a stronger shared scorecard available. And it's not on what you spend. It's what your customers, the ones you already have, it's what they do next. And that's the opportunity here. Now when I was doing research behind Do B2B Better, my latest book, I found that roughly one in four customer programs can prove they have any business impact whatsoever. And I call them change makers. The other three and four are hopefuls because they do good work and they hope it matters, but they can't prove it. Now that same, not the hopeful change maker language, but the same finding was found by CustomerThink, the Exxon Institute. Seems that whenever anybody looks at programs, Customer experience programs, marketing programs, running surveys, VOC, they get the exact same number. It's always really close to one in four show any impact. And that number hasn't changed in years. The difference between a change maker and a hopeful, it's not effort, it's not talent, it's what they report. A hopeful reports a survey score. It may be bringing in some text analytics as well, but they talk about customer satisfaction, net promoter score. Change maker reports a chain. Something changed in your operations. Now, here I don't mean literally just operations. Supply chain. It could be if you're a software company that there was a code release, could be customer support efforts, something in your operations, your policies, your sales reps changed. As a result of that change, it moved your customers' emotions. They felt more or less confidence. They felt more or less frustrated. As a result, that emotion changed what your customers did. Whether they renewed their account with you, whether they expanded it, or they moved volume somewhere else without telling you. And what they did showed up then in revenue. Four links, every one of them is measurable. But most are not measuring it. Now, I don't mean they're not measuring operations. Every company measures operations at least a certain level. And behavioral data is usually measured too. In fact, from my interviews with C Suite, they focus obsessively over customer behavioral data. And obviously, every company measures financials. The two missing parts. First of all, is the emotions link. Net promoter score is fine metric. But it doesn't give executives what to do. Emotions are closer, they're more actionable, yet they're rarely measured. And yes, I am talking B2B. confidence and trust, for example. The other they miss is linking them together into a chain. So here's the truth behind that. It's that the CFO doesn't need your story. Your CFO has heard enough stor stories that your CFO needs your math. As a report in the book, I've talked about it a few times in this podcast, UKG, Roxy found that the emotion that predictable customers did next was confidence. Now she actually measured eight emotions, frustration, anger, eight of them, but confidence was the biggest, what we call an emotional North Star. A hegerty was happiness, which predicted their net promoter score, which predicted retention and expansion. Neither company found what that by asking whether customers were satisfied. And that middle link is the leading indicator your executives are looking for. Confidence, trust, so they move before the orders due, which means you can bring your chief financial officer a number about next year instead of a report about last quarter. So here's a sentence that wins the conversation. When we fixed onboarding, customers told us they felt confident. Customers feel confident, expand at a rate we can show you. And here's what that's worth. Your CFO can forecast with that, compare it against anything else on our list, and defend it to abort. So I hold my own firm to this. Here at heart of the customer. I love it when a customer gives us a good score. Obviously, I do. Why wouldn't I? But if they don't come back a second time, well then I don't really care what the survey said. We didn't earn that business. We didn't do a good enough job. Your CFO is running that same test on your program. Whether anyone says it out loud or not. So here's your assignment. Take the last time you asked for money, the one you either won or lost, and rewrite the case as one sentence with four links at it. When we fix this, customers told us they felt this. Customers who feel this then did this, and here's what it's worth. Write it out. If you can't fill out the third link, you've just found the management you're missing. And that's worth knowing before your next commercial review rather than during it. And so that's Tinder Truth number 63. The CFO doesn't need your story. The CFO needs your math. You can find the full research at hearttocustomer.com. I specifically recommend the growth chain. There's two versions of the white paper, one for customer experience leader, one for executives. So follow the show wherever you get your podcast. It's also on YouTube and LinkedIn. If you find it's useful, hey, give it a share or a like. And it puts it in front of another leader who also owns a growth number. And lastly, I want your feedback. You know what's landing? What didn't? What should I take on next? And where in the chain did you get stuck? Email me at Jim@heartofthecustomer.com.