Estimated reading time: 2.5 minutes
Series edition 1/6
The stakes are high. It’s time to change the way we do business - if we fail to change we will fail to survive. The shift in business models - finding new ways to commercialise products and services, new ways to go to market and getting closer to your customer - has seen a tremendous amount of change at a pace faster than we have seen before and accelerating all the time.
But let’s understand the challenge, we aren’t merely changing one part of the business, we are changing everything. This is a complex challenge, with many inter-linking parts, that requires a combination of business skills to re-imagine new ways to buy, produce and sell goods and services. It also requires technology skills so that organisations can make best use of technology advancements, as well as the ability to wrap these new business services, supported by technology in an experience that employees and customers want.
Your shareholders, customers, and employees expect a quick response. The answer is to develop a coherent strategy and the ability to turn it into execution quickly and at scale. The challenge is how do you measure success as you implement these changes?
The complexity of a multi-faceted project touching customer and employee experience while trying to enhance the experience and build brand equity cannot be measured on a single, simple financial metric. That doesn’t mean we don’t focus on ROI or that Customer and Employee programmes don’t deliver great ROI. In fact, market research company, Forresster, states that there is 85% ROI from investments in design thinking applied to customer and employee experiences.
But the solution goes beyond a one-size-fits-all approach of simply throwing a number of lag metrics to show progress and returns. The truth is a good ROI may negatively affect Return on Experience (ROX) in the long term, giving great financial rewards at the expense of customer or employee experience. (Think of ‘great’ turn-around projects that damaged the organisation, morale and customer experience to provide short term gains and long-term problems).
At PwC we have been working on a ROX framework, which I will unpack over 6 articles. We believe ROX gives a far more holistic and accurate view of success than simply looking at ROI. It’s a combination of a holistic set of metrics across Pride, Influencers, Behaviours, Value Drives and Outcomes. ROI is simply one of those, an outcome, but an understanding of all the metrics leading up to the outcome is necessary to get an accurate view of progress and success.
ROI falls short because it only measures a lag indicator AND only focuses on a single stakeholder looking to create shareholder value. In contrast ROX allows us to determine which activities and touchpoints drive up customer experience and helps you focus on improving the parts of the organisation that will shift the dial. In addition, ROX also addresses whether the company is driving the behaviours that are key to designing and delivering better experiences, which links the vital elements of employee experience to customer experience.
If you think of the high-growth organisations that are winning in the market, names like Apple, Amazon, Disney and Netflix, they focus on creating amazing customer experiences, capturing and interpreting customer insight, investing in and creating employee experiences, creating environments where experimentation and innovation flourish and see revenue as important but a result rather than an areas to focus on. We use ROX to help our clients create these holistic views of an organisation and be able to compete and win over the hearts and minds of their staff and customers.