Customer Experience Matrix Mechanics and Geeky CRM Cx CEM

Copyright 2014 ClientXClient LLC. www.clientxclient.com. 908.542.1134 Share & Enhance & Share 1

The CxC Customer Experience Matrix Combines Customer & Business Perspectives, Cost, Processes


Customer Experience MatrixTM:

Repair DisposeSelection SupportUsePurchaseAwareness

Customer Process

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Bu

sin

ess

Pro

cess



Community

Outdoor

Affiliate

TV

Radio

Newspaper

Direct Mail

Email

Web

Call Center

Signage

Events

Retail

Billboard


Customer Process

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Ch

ann

el

30% 90%25% 70% 20% 15%$ $ $ $ $ $ $=LTV



Community

Outdoor

Affiliate

TV

Radio

Newspaper

Direct Mail

Email

Web

Call Center

Field Sales

Events

Retail

Branch


Customer Process

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Ch

ann

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30% 90%25% 70% 20% 15%$ $ $ $ $ $ $=LTV


Strategic Target Focus Areas

Web VisitsGross

EnrolledNet

Enrolled

Fall SystemClient Countswith Projections 7,308,276 24,170117,637428,293 36,568

12,398

0.5003%1.6096%5.8603% 0.3307%

0.1696%

1. Increase “Attended” 8,500 (.XX%) via XX follow-up contacts (calls, letters, email) to “Responded Select” growing net enrolled XXX (use funnel formula)

2. Grow “Gross Enrolled” via XX follow-up contacts (calls, letters, email) to “Responded Select” growing net enrolled XXX (use funnel formula)

3. Reduce Withdrawals XXX via XX follow-up contacts (calls, letters, email) to “Gross Enrolled and Withdrew win back” growing net enrolled XXX (use funnel formula)

4. Grow Net Enrolled via XX follow-up contacts to (calls, letters, email) to “Attended” growing net enrolled XXX (use funnel formula)

42

3

1

3 Pg Action Registered

Cancelations

Immediate Term: Phase I Initiatives


Simple Customer Value Growth ROI Calculator(Top Line Revenue)

No 1. Grow Response Rate 0.000%

Yes 2. Grow Registered Rate 1.000%

Yes 3. Grow Enrollment Rate 1.000%

Yes 4. Reduce Withdrawal Rate -1.000%

First Year Benefit $2,650,178.15

Based on annual projections this chart calculates ROI Benefits of increased conversion performance at each stage of lead conversion process

This is the first year return expected with $400,000 investment. $10.3M three year return includes list and mail efficiencies realized in year 2 & 3.


1. How do you get businesses to recognize the value of customer experience? How do you define customer experience?

2. How do you help businesses/your business create process and discipline around developing excellent customer experiences?

3. How do you make the right choices around customer experience design? How do you know you are doing the right thing?

1. Designing experiences that exceed expectations2. Distinguish where the function of customer experience

contributes to process-sales, communications, research3. Distinguish key touch points of the design4. Avoid common mistakes5. Designing with specific motives,6. And objectives that can easily be adapted and changed

Questions Answered By CxC Customer Experience Matrix


Scenario Example:Situation Description

• Business Context– direct marketing– 600 products with 50,000 promotions/year– control issues


Situation Description

• Promotion Spending Decisions– volume:

• high number of decisions• quick response required• many alternatives to consider

– complexity• many types of promotions• executed by separate groups• impact multiple departments




Customer Process

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LTV Calculation

• Data Available– transaction records

• date• customer ID• product ID• promotion ID• revenue• promotion cost• product cost

Transaction Type:

First Order= earliest date per Customer ID

Replacement Order = other order where (product ID = First Order product ID)

Cross Sell Order = all others


LTV CalculationT

rans

actio

n T

ype

Cross Sell

Order

Replacement

Order

First Order

Product Cost

Marketing Cost

RevenueOrder Count

Value Type

xxxxxxxxxxxx

xxxxxxxxxxxx

xxxxxxxxxxxx


Total LTV

First Order Promo Cost

Replacement + Cross LTV

Replacement Product Cost

Cross Sell LTV

Cross Sell Promo Cost

ROI Calculations

First Order ROI =

Replacement ROI =

Cross Sell ROI=


Calculation Comments

• double counting is OK

• treats each ROI as independent of others (is best guess unless know otherwise)

• particularly questionable for Replacement ROI

• apply discount rate to account for risk

• still need to estimate incremental impacts

This is really,

really, really

Important!


Estimating Incremental Impact

Square Root Rule:change in revenue =

square root of change in promotion cost

• captures diminishing returns

• replace with better info if available


Preparing the Analysis

• set program parameters:– an increase / decrease test (e.g., 20%)– minimum incremental ROI to consider– minimum aggregate LTV to consider– ranking metric: ROI or LTV? – Do both and more – We have big data

capabilities – create more derived values representing multiple strategies and scenarios



• calculate actual ROIs for each promotion

• calculate average ROIs across all promotions– promotions with below-average ROI are

candidates for reduced investment– promotions with above-average ROI are

candidates for increased investment



• calculate estimated incremental results for each candidate

• filter based on thresholds

• rank on selected metric and report


Analysis Results

• Ranked opportunities by 6 action types:– acquisition increase– acquisition decrease – replacement (product cost) increase– replacement (product cost) decrease– cross sell increase– cross sell decrease

• Estimated impact of each change



Community

Outdoor

Magazine

TV

Radio

Newspaper

Direct Mail

Email

Web

Call Center

Field Sales

Events

Retail

Dealer


Customer Process

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30% 90%25% 70% 20% 15%$ $ $ $ $ $ $=LTV

+Invest

+Divest

+Invest+Invest +Invest

+Invest+Invest

+Invest

+Invest

+Invest

+Invest+Invest

+Invest

+Divest

+Divest+Divest

+Divest

+Divest+Invest+Invest


Sample Analysis - Summary


Sample Analysis - Drilldown


Actual Findings

• Estimated 10% increase in company LTV vs. current base promotions

• Opportunities beyond current base would produce additional benefits

• Rules and process transparency spawns innovation


Next Steps

• move beyond promotion keys to specific decisions e.g. keyword analysis

• more detailed LTV models, more precise estimates of incremental results

• automated execution of recommendations

• more frequent data feeds

• analyze results of accepted recommendations


Business Rule Perspective

Rules embedded in system:1. increase or decrease investment in

programs with above or below average ROI

2. limit consideration to programs above specified ROI and LTV thresholds

3. rank opportunities based on LTV or ROI

4. could also have rule to terminate programs failing to meet specified goals

5. could consider calculations to be rules

OK, today

This is even

More

Important!


Rule Management Framework• capabilities

– rule complexity– scalability / response time– integration across rules– integration across systems– Novice user tools, visualization, testing

• administration– rule definition (processes, skills required, security)– rule verification– rule change management

• value measurement– utilization reporting– results reporting– cost / benefit analysis– Process:Rule Visualization

This is what

We should

Talk about

908.542.1134


Applications vs. Framework

• capabilities– rule complexity: low– scalability / response time: high– integration across rules: high– integration across systems: low

• administration– rule definition: via programming– rule verification: via programming– rule change management: via programming

• value measurement– utilization reporting: none– results reporting: possible– cost / benefit analysis: possible


Lessons Learned

• rule-based analysis can make business intelligence actionable

• even simple rules can identify major opportunities

• use pre-calculations to make complex decisions with simple rules

• LTV is long-term measure; must also consider immediate profits, cash flows

• framework enables continuous improvement • framework provides transparency for greater

business participation


Thank You!

Michael R Hoffman

Client X Client

[email protected]

www.clientxclient.com

908-542-1134

mailto:[email protected]

http://www.clientxclient.com/

Usual Response to “We are already doing this” – (white space is opportunity)

1. Awareness

2. Information

5. Negotiation

4. Selection

6. Contract

12. Care/Support

7. Logistics

9. Delivery

10. Acceptance

13. Repair

14. Community

8. $Collection

11. Use

3. Identification

Geography

Digital

Store

3rd Party

Direct

Community


*Yes, Big IOT Opportunity with CxCFramework

Geography

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Store

3rd Party

Direct

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12. Care/Support

7. Logistics

9. Delivery

10. Acceptance

13. Repair

14. Community

8. $Collection

11. Use

3. Identification

Customer Optimization Wizard – Dashboard for Performance Management

Numbers in each cell represent: customers, potential revenue, costs (per and aggregate), customers at risk, customers in process, forecast closed sales, forecast lost customers, forecast referrals, simulation under market conditions.


Geography

Digital

Store

3rd Party

Direct

Community

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1. Awareness

2. Information

5. Negotiation

4. Selection

6. Contract

12. Care/Support

7. Logistics

9. Delivery

10. Acceptance

13. Repair

14. Community

8. $Collection

11. Use

3. Identification

Every Interaction Cell Measures Cost and Revenue Opportunities

Interaction CostActual RevenuePotential Revenue

(I used zoom out from one cell to represent some information contained in each cell)


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13. Repair

14. Community

8. $Collection

11. Use

3. Identification


Alerts indicate opportunity, risks, activity that is outside of plan parameters. Alerts require attention to exploit opportunity, avert risk, or amplify downstream resources, reduce upstream flow, divert/adjust activities (inventory, staff, promotions, pricing). Alerts are delivered according to manager responsibility and controls. The Customer Optimization Wizard may invoke corporate standard policies and make recommendations based on probabilistic outcomes (upstream and downstream scenarios)

ALERTS


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7. Logistics

9. Delivery

10. Acceptance

13. Repair

14. Community

8. $Collection

11. Use

3. Identification


Move bar along bottom to see impact scenarios for current customer flow. Adjust parameters for multiple scenarios and set independent performance threshold ranges at multiple nodes to test complex market scenarios

Resource, Opportunity, Time Scenarios

week 1 week 8 week 9 week 10week 6 week 7week 5week 2 week 3 week 4


Community

Geography

Digital

Store

3rd Party

Direct

Community

Awareness

Information

Negotiation

Selection

Contract

Care/Support

Logistics

Delivery

AcceptanceRepair

$CollectionUse

Identification

The Customer Experience Matrix requires a customer-involved contact.(business to business)

C. Client contacts business acquaintances, clicks on “business services email”; calls 1-800 Biz Info”; schedules in-person meeting; negotiates 3 month contact; finances expense for 12 months through third party; contacts customer service for “emergency”.

C C

CC C

C

CC

C

CC CC

CC


Customer Experience Interface: hover over cell for information

ActivitiesYieldMetricsSystemOwnerDataAdministrationSystem

1. Awareness

2. Information

5. Negotiation

4. Selection

6. Contract

12. Care/Support

7. Logistics

9. Delivery

10. Acceptance

13. Repair

14. Community

8. $Collection

11. Use

3. Identification

Monitor Key Performance Indicators for Every Interaction



Thank You!

Michael R Hoffman

Client X Client

[email protected]

www.clientxclient.com

908-542-1134

mailto:[email protected]

http://www.clientxclient.com/

Customer Experience Matrix Mechanics and Geeky CRM Cx CEM

Data & Analytics

Transcript of Customer Experience Matrix Mechanics and Geeky CRM Cx CEM