First, how do you determine your investment cost in a customer experience metrics program?
ROI= (Returns from Investment) – (Cost of Investment) / (Cost of Investment) x 100.
Sounds simple enough. But, if you are trying to convince other team members or stakeholders that investing in a Customer Experience Metrics Program is worth it, how can you have the investment in the program pay for itself and increase your ROI?
We have five use cases that we want to review with you to show you how a having Customer Experience Metrics Program can increase your Return on Investment in an insights and feedback program. We may get a little math-nerdy, but hang it there, and it will make sense!
1) Unwritten Rules:
We recently had a client who started an auto service mystery shop for their chain of car dealerships. Within the first month, we uncovered that 40% of their locations turned away business because there was an 'unwritten rule' somewhere that they would not do oil changes on vehicles if they were not purchased from them. This was noticed not just once but several times when they were contacted to book appointments. The Owner and Managers had no idea where this 'policy' came from or for how long it had been going on. That had never been communicated to the customer-facing team.
To simplify the situation, let's assume a few things:
- Each service was $100.
- 40% of the locations were 4 out of 10 locations.
- There were two rejections of service per month per affected location (likely more, but we'll assume it to be simple)
- This had been occurring for one year (they suspect likely much longer, but we will keep it simple)
- The cost of the service mystery shop was $100 (to keep it simple)
$100 x 2 = $200 per location per month in lost sales
$200 x 4 locations = $800 per month in lost sales across the brand
$800 x 12 months = $9600 per year in lost sales
$100 per mystery shop x 4 locations x 4 quarters = $1600 in yearly mystery shopping costs
$9600 Return on Investment (regaining lost sales) - $1600 (program costs) = $8000
$8000/$1600= 5 x 100 = 500% ROI
TLDR: Having a customer experience program measure what actual customers are experiencing can highlight issues that are affecting your sales.
2) The Missing Contacts:
We have many very different but similar use cases where our clients had no idea there was a problem until we found it.
Many large companies have different systems and platforms to handle inbound inquiries. We will focus on a client that, because of their Customer Experience Metrics Program, discovered that they had been missing 100% of online meetings booked through their website.
During the Pandemic, our client changed CRM providers and ultimately updated how their appointment bookings integrated with their calendars. There was a glitch in the programming that when it was manually created, it would appear in the calendars, but the link in the website to book a meeting was broken. Clients would only book virtual meetings to attend and see that no one showed up. We did not evaluate all of their locations, but after our third issue, they internally looked into it. They had discovered that this had affected all of their locations, extending over 16 months. They estimate that they missed 1000+ meetings that were booked, and they had no idea.
The calculation for their ROI looks a bit different and is a bit more complex. I will provide you with the highlights of areas that were impacted:
- Their overall NPS score dipped at this time, and it was originally attributed to the Pandemic but was directly related to the reliability factor.
- Their CSAT (Customer Satisfaction Score) dipped for the same reason.
- Their CES (Customer Effort Score) showed the most impact as customers noted it was difficult to contact the location to make appointments.
- Their call centre experienced a higher-than-anticipated volume because the people who called in were frustrated by their online booking experience, which required additional staffing.
- Their Voice of the Customer Surveys noted that clients were switching brands because of the lack of 'effort' shown on the clients' part.
- The overall cost and impact are still undetermined, as this caused a ripple effect that will take years to repair and manage.
3) Do you want to make it a combo:
There are several metrics that every business that has customers uses, including AVT (The average value per transaction). Did you know that upselling and cross-selling can increase your AVT by 10-30% on average? It is easier and more cost-effective to sell more to an existing customer than it is to acquire a new one.
Take, for example, a brand that we work with that has over 200 locations in Canada and the US. We worked with them on their mystery shopping program, where we specifically designed the survey to have the shopper not ask for anything extra besides a main dish. We calculated how many times each shopper was asked simply, 'Do you want anything else?' and in comparison, we later asked, 'Did they ask you if you wanted to make it a combo with a side and drink?' When our client had their front-line staff narrow down the upsell to something specific, it removed the thinking from the customer and allowed them to just decide 'yes' or 'no' to a combo versus rethinking the whole menu for something else. The average receipt increased by $1.25 over three months. Let's take a look at what that ROI would look like over a year with some generalized numbers.
- 200 locations x 200 (avg) transactions daily = 40,000 (avg) daily transactions
- 40,000 (avg) daily transactions x $1.25 = $50,000 in (avg) increased revenue daily
- $50,000 x 360 (minus avg. stat holidays) = $1.8 million from direct combo upsells
- 200 locations x $30 (avg.) mystery shops x 12 months = $72,000
- $1.8 million - $72,000 = $1,728,000 / $72,000 = 24
- 24 x 100 = 2400% ROI
TLDR: Measuring the typical customer experiences while at your location can demonstrate if sales policies are being followed and key into where follow-up is needed to ensure that you are making the most of your sales.
4) What are they doing better:
One of our favourite things to do for our clients is competitor intelligence. We have so many examples of how competitor intelligence has changed our client's businesses it is hard to choose just one example.
I am going to share with you what we did for ourselves. We wanted to know how we stacked up against our competitors, so I did the only thing I could think of; I mystery-shopped us and our competition! Now, to be clear, I did not let the rest of the team know I was doing this as I wanted authentic results. I created a company with a website, email addresses, and a LinkedIn profile. I let them sit and gain traffic for a while. I then posed the same use case scenario for my team and our competition. The results that I gained were invaluable. Here are the few key takeaways that we learned.
- The response time from quote request to information was really varied. Ranging from an hour to weeks. We noted how this likely affects the clients and their deadlines to stakeholders when needed quote information. Side note; we were the fastest!
- The information required for the quote varied substantially for the same ballpark results. We noted the baseline level of information to ask everyone to minimize the friction in receiving the estimated costs.
- Some brands required three or more meetings to create a ballpark quote. This created scheduling difficulties, which took a lot of time away from my current role. We noted that this was likely how a client would also feel.
- Some brands would not quote me because my standard ask was only $25K a year, and they only work with/talk to businesses that will have contracts greater than $50K-$1M, which showed us how underserved smaller business is.
- The pricing varied wildly for the same type of program. There were lots of options added that were not required for some locations, and it would have been better if these were offered a-la-carte for our team to choose what would be best for us and our budget. We took this information and are using it for our clients going forward.
- The style of our quotes was lacking compared to the others we received. We have updated our quoting system multiple times now to suit our client and eliminate friction points because of this realization.
- Follow-up is key! Many brands never followed up with me, and it seemed that several made following up with me their full-time job. There is a happy medium to find when sending follow-ups, and annoying people, even after politely declining, never goes well. Striking a balance is key to learning the effective timing between helpful and pushy.
5) Who took the cookies from the cookie jar:
Leakage in business can come from many different checkpoints. Incorrect POS usage, improper itemizations in the system, not entering in sales and plain taking cash. Once client suspected that a particular combination of kitchen and waitstaff were taking the money from cash orders and not entering information into the system. We designed a plan with them to fill the location with shoppers for five nights when this combination of staff was scheduled over a dinner/evening shift and have all of the shoppers pay in cash. For the five nights, we had 20 shoppers, and their guests go to the location and pay with cash between 5 pm and 9 pm. There were multiple items that we were able to uncover from this 'quick-hit' mission:
- Many submitted reports had the same receipt number, and the photos of the receipts provided showed 'reprint' on them.
- Our transaction records of the amount our shoppers spent each day surpassed what the location noted was reported in earning that shift, even though non-mystery shop customers were in the location.
- The food orders for those dates exceeded what the system noted should be ordered.
- The shifts where the 'suspect' combo of staff was not working did not experience these issues.
- Our mystery shop analysis estimated that approximately $500 per shift was being taken in cash; over five shifts, this was $2500 proven to be taken. As this was suspected for months, the location estimates that they lost well over $20,000 in cash sales before they could take action on the issue.
- $30 (avg) mystery shop x 100 shops = $3000
- $20,000 - $3000 = $17,000
- $17,000/$3000 = 5.7
- 5.7 x 100 = 570% ROI
We would love to discuss your needs and how we can help increase your ROI on creating a program with us. Our upcoming portal refresh will have EVEN MORE options for you to compare location over location, costing of your program and the relationship to the investment.
