How to drive ROI on Customer Experience Strategy and Design

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The Business Value of Customer Experience 

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<div>What are you doing to deliver exceptional customer experience?</div>
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<div>What does quality Customer Experience look like to your business?</div>
<div>What steps are you taking to deliver exceptional Customer Experience?</div>
<div>How will you unify your teams to pursue better experiences that lead to increased customer loyalty and sustainable business value?</div>
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<div><strong>What&#8217;s in the report: </strong></div>
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<li>Ways to uncover CX opportunities in your business.</li>
<li>Strategies to communicate and measure the impact of CX initiatives.</li>
<li>The 4 Effects of Better Customer Experience.</li>
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Octavio Egea

Nieves Padilla

<p>Octavio Egea is Executive Strategy Director at frog Madrid. For 20+ years, Octavio has been helping organizations decipher, navigate and thrive in complex industry contexts, deploy new growth platforms and embrace innovation to drive superior alpha. As Executive Director of frog’s EMEA Strategy practice, Octavio leads a team of passionate strategists assisting start-ups and global corporations in identifying emerging opportunities, developing growth strategies, building new businesses, and creating innovative and meaningful experiences that resonate with customers and employees.</p>


<p>Nieves Padilla is a Senior Strategist at frog Madrid. Combining an innovative mindset and a practical approach to make data-driven decisions, she is able to conceptualize complex business challenges in order to drive change in organizations. She brings more than 8 years of experience in strategy consulting engagements involving customer experience transformation, organizational transformation and corporate and portfolio strategy for worldwide companies within industries such as financial services, transport, services or tourism &amp; entertainment.</p>


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Not all customer experience strategies are made the same. Here are some ways to think about defining quality CX and unlocking its full potential in your business.

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Your Business, Your CX: Defining Quality and Unlocking Potential

<p><strong>Fierce competition</strong> and consumer power grow at parallel paths. Traditional means of differentiation—the kind based on product or service features alone—are no longer enough. In other words, purely functional attributes will fail to impress customers into sticking around for long. To win the battle for customers at a time when there is a seemingly unlimited range of options available, the charge is to seek new sources of competitive differentiation. Customer experience (CX) is now the best lever that companies can use to compete.</p>
<p>But what does quality CX look like in your business? From meeting consumer expectations to assessing organizational capabilities, this will be determined by many factors. Read on for ways to think about how to define quality CX in your business to start unlocking its full potential.</p>
<p><strong>First, what does ‘customer experience’ mean?<br />
</strong>CX is not the same as customer satisfaction, nor is it the same as customer service. CX is also not the result of any one initiative. For instance, while quality CX inspires customer loyalty, exceptional experiences are rarely the result of customer loyalty programs alone. To further complicate matters, not all quality experiences are the same in every business or across all industries. The marketplace influences what types of interactions customers already demand and which experiences will lead to competitive differentiation.</p>
<p>Put simply, <a href="https://www.frog.co/designmind/building-loyalty-customer-experience/" target="_blank" rel="noopener">CX is the sum of all interactions a customer has with a brand over time</a>. On an individual touchpoint level, products and services lead to exceptional experiences when they include features and interactions that customers deem acceptable to use, offer some level of preference and inspire joy. Finding the right balance in these attributes—and knowing which of these will offer the most value for your organization—requires deep understanding of customer needs specific to your business.</p>
<p><img decoding="async" loading="lazy" class="alignnone size-full wp-image-14045" src="https://wp.frog.co/wp-content/uploads/2020/02/BusinessValueOfCX_INFOGRAPHIC_resized_Page_1.png" alt="" width="100%" height="100%" /></p>
<p>All this is to say that there simply is no one-size-fits-all solution. At frog, we use what we call a ‘Relationship Framework’ to define and evaluate a company’s CX. It prizes three factors above all as a guide for businesses looking to create meaningful, sustainable relationships across the customer lifecycle. These include:</p>
<p>&nbsp;</p>
<ul>
<li dir="ltr"><strong>Breadth</strong>: The frequency of interactions across a customer’s experience.</li>
<li dir="ltr"><strong>Depth</strong>: The extent to which emotional, higher order needs and desires are being met.</li>
<li dir="ltr"><strong>Consistency</strong>:The connectedness and cohesiveness of a brand’s ethos through the interactions it creates with customers.</li>
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<p>To learn more about these three factors and how they contribute to exceptional CX, see the course <a href="https://www.linkedin.com/learning/design-thinking-customer-experience/welcome" target="_blank" rel="noopener">Design Thinking: Customer Experience</a> on LinkedIn Learning taught by frog Executive Strategy Director Geoffrey Schwartz.</p>


Because CX is a holistic assessment that involves many individual moments, knowing where to start improving experiences can be daunting. It involves first identifying what qualifies as exceptional CX specifically for you and your business. This will help to clarify what’s possible and will help avoid misconceptions about intended results. Here are some ways to think about uncovering opportunities for improving the quality of CX in your business.

<p>New tech alone cannot save major flaws in a business’s overall offering, but it can lead to new ventures, offer forward-looking alternatives and influence new processes that improve overall CX in a measurable, scalable way. One example of using tech to improve CX is frog’s collaboration with DBS, a multinational financial services group. For DBS, frog designed and launched a paperless and signature-less mobile banking service. Not only did it engage new technologies and platforms, it helped DBS outperform competitors in customer acquisition and retention.</p>
<p>Of course, the integration of tech-enabled experiences goes far beyond initial launch. Even with emerging technology, it is important to think long-term about their implementation. For instance, a hotel chain may decide to digitize their room service offering to seem more modern to guests, but if the service is reliant on devices that quickly become obsolete or on software that is not maintained, the cost of such a wasted effort is big in terms of both budget and impact on perceived CX quality.</p>


Consider how technology can inspire CX innovation.

<p>Creating a deep understanding of your customer’s pain-points along their journey is a strong place to start looking for potential ways to improve CX in your business. Applying design thinking methodologies, informed by user research and deep business expertise, leads to winning product and service innovation and enhancements that ultimately contribute to greater CX.</p>
<p>This also means knowing what matters most to your customers. Otherwise, so-called CX ‘improvements’ fail to translate into impact. As the standards for a given experience are raised, customer expectations evolve, and experiences can even become commoditized. In this way, timing is everything. Being willing to drive change in your business, market or entire industry—rather than simply respond to it—can help keep your business at the forefront of CX innovation. At frog, we partner with clients to identify the right risks and experiment in the most lucrative domains to create lasting impact through innovative experiences.</p>


Look for unmet customer needs and points of friction.

<p>At the heart of making memories that lead to positive associations are understanding emotional drivers along the way. At frog, we believe ‘form follows emotion.’ This means rather than servicing just functional or technical requirements, we believe in designing experiences around customers and what they love. This will not be the same for every business. Instead, it is necessary to center on your own customer’s journey in a strategic, precise way.</p>
<p>So, when looking across your customer’s journey to uncover key business opportunities, also consider the emotional weight of these interactions. Each will leave an imprint on customers’ memories that they will associate with your brand long-term. This is all core to deepening the relationship between your customer and your brand. Only by considering how an experience can make your customers feel, will it be possible to understand what they value.</p>


Let emotions be your guide.

Identifying CX opportunities in your business 

<h6><strong>On measuring the impact of CX</strong></h6>
<p>Now that we’ve outlined what comprises a quality customer experience for your business and ways to go about thinking of CX opportunities, it’s time to start looking forward at how to measure the impact of your initiatives.</p>
<p>For even more information on measuring results, sign up to get <a href="https://go.frog.co/en/business-return-customer-experience-report" target="_blank" rel="noopener"><strong>The Bus</strong>i<strong>ness Value of CX</strong></a><strong>,</strong> a new, free report that includes the four key effects of exceptional customer experience, as well as more detail on frog’s approach to customer-centered innovation.</p>


How ready is your company to compete on customer experience?


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Without the right metrics, initiatives for improving customer experience can be met with internal skepticism. To change minds, communicate the business value of CX. 

United Around CX: Measuring and Communicating Impact 

<p><strong>Great customer experience (CX)</strong> has become the main—and in some cases, the only—driver of differentiation. According to <a href="https://www.forbes.com/sites/shephyken/2018/07/15/customer-experience-is-the-new-brand/#ef06afd7f528" target="_blank" rel="noopener">Forbes</a>, 89 percent of companies say CX is the basis for competition within their industry.</p>
<p>Yet it’s one thing to say great experiences matter and another thing entirely to demonstrate precisely where and how this focus manifests as customer experience programs. Because superior CX leads to more satisfied, engaged and loyal customers, all organizations should be united around the need to design and implement successful CX-focused initiatives. Too often, however, the difficulties found in demonstrating evidence of tangible business impact from these efforts can make for skepticism that becomes a significant roadblock to progress.</p>
<p>Only by translating the potential benefits of <a href="https://www.frog.co/services/customer-experience-design" target="_blank" rel="noopener">customer experience design</a> into explicit outcomes does it become clear how superior experiences can be a key business value driver, and only then is it possible to get the buy-in (and budget) needed within organizations to ultimately unleash its full financial impact.</p>
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<p>Through demonstrating results, such as pointing to metrics that show how customer experience drives growth and improves customer loyalty, it’s possible to change perspectives from seeing CX initiatives as “leaps of faith” to directly connecting these efforts to evidence of competitive advantage.</p>
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<h4><strong>Customer experience in action: BT</strong></h4>
<p>In any business, the definition of what is considered quality CX will only evolve over time. For example, over-the top media services (OTT) have transformed how we consume video content. Years ago, most customers would have been delighted with the prospect of a multi-screen viewing experience, one that made it possible to begin watching something on one device and pick up precisely where they left off on another. Now, this is considered the baseline. Consumers have evolved to expect this feature, and any service that cannot offer it is seen as outdated. Once a standard for experience is raised, any business that wants to stay competitive will soon see there’s no turning back—it’s time to adapt and up the ante on quality.</p>
<p>Thankfully, there are clear connections between CX initiatives and business impact both short- and long-term. For example, when <a href="https://www.frog.co/work/bt-tv-next-generation-experience" target="_blank" rel="noopener">frog partnered with BT to redesign their complete ecosystem of BT TV products</a>, the team was committed to offering a digital-first experience that was just as intuitive as traditional TV offerings. Following the launch of the redesigned service, measures of customer satisfaction improved dramatically. Net Promoter Score (NPS), a key customer loyalty metric, improved by seven points. BT also experienced an 11 percent drop in dissatisfied customers and a seven percent drop in customers likely to leave BT TV. Not only did BT win awards for the experience-driven design strategy, they made measurable progress toward building sustainable customer loyalty in the process.</p>


So, how can business leaders make the case for aligning around the objective of improving CX? The answer lies in understanding how to communicate its value. To drive alignment organization-wide, here are some ways to establish a metrics model that connects business impact, customer data and operational indicators.

<p>Success will not be measured the same way for a transaction-based company as a subscription-based one. The strategies for improving experience as a telecom operator (e.g., long-term customer retention) will be different than that of a retailer (e.g., more frequent purchases). Still, each improvement will have an impact. As the expert of your own business, you already have a sense of metrics matter most to you. By tying this knowledge to how customer experience manifests in your business, it is possible to more directly measure the impact of improving CX.</p>
<p>How do you measure success already? Is it by creating more customers? Encouraging more frequent or varied purchases? Reducing costs? Revenue growth? The ability to expand into new markets? To launch new services? This will vary from business to business. However, across all industries, customer experience can be correlated with these tangible effects.</p>


Identify metrics linked to business impact and economic value.

<p><a href="https://www.invespcro.com/blog/customer-acquisition-retention/" target="_blank" rel="noopener">It costs five times more to attract a new customer than to retain one</a>, so keeping customers happy is a vital strategy for lasting business success. Retention rate is a critical driver of profitability, making a huge impact on the customer lifecycle value.</p>
<p>At a time when social media has shifted the power from companies to consumers, building a base of loyal customers is a key path to creating advocates on your behalf. Establishing this advocacy has all sorts of benefits, from expanding your customer base to saving costs through word-of-mouth marketing. In the upcoming report The Business Value of CX, we go deep into the value created through advocacy over time.</p>


Associate business goals to customer and marketing-related metrics.

<p>To leverage the long-term value creation opportunities that superior CX can provide, its impact should not only be assessed once. It should be carefully tracked as it evolves over time. This would make it possible to then check if such efforts are maintaining the intended result, or if it is necessary to focus on a new aspect of experience differentiation.</p>


Establish a continuous monitoring system to track impact on an ongoing basis. 

Communicating the success of your CX efforts

<h4><strong>Measuring the business value of CX</strong></h4>
<p>What steps are you taking to deliver exceptional CX? What business impact can you expect? How will you unify your teams to pursue better experiences that lead to increased customer loyalty and sustainable business value? These are all questions to consider in order to drive growth, build loyalty and stand out ahead of the competition.</p>
<p>To manage expectations of CX results, read about how to understand what quality CX looks like specifically for your business in <a href="https://www.frog.co/designmind/business-cx-defining-quality-unlocking-potential" target="_blank" rel="noopener">Your Business, Your CX: Defining Quality</a>.</p>
<p>For more information on measuring results, sign up to get <strong><a href="https://go.frog.co/en/business-return-customer-experience-report" target="_blank" rel="noopener">Business Value of CX</a></strong> , a new, free report that includes the four key effects of exceptional customer experience, as well as more detail on frog’s approach to customer-centered innovation.</p>


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frog and BCP, Peru's largest bank, worked together to create a path for designers within a financial services enterprise.

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Dialing up Design in a Large Enterprise

<h6><strong>So you’ve stood up a design function in your organization. Good! Now what?</strong></h6>
<p>This is the exact question that Banco de Crédito del Perú (BCP) was asking itself when it reached out to frog. BCP is Peru’s largest bank in a country with tremendous opportunity to reach some of the most significant un- and under-banked populations. As a part of a massive transformation, BCP had ambitious aspirations to claim the best customer experience in all of Peru—not just among banks, but all Peruvian brands.</p>
<p>When frog first visited BCP, we were impressed by all the progress that had already been made. After embarking on a world tour of customer-centric organizations, the executive committee had adopted an agile tribe model, standing up agile as a new way of working, and transformed the corporate campus into a vibrant and inviting creative environment covered in bright Post-it Notes and whiteboard sketches. We even found people playing musical instruments in corners of team spaces. As designers, we felt right at home.</p>


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<p>In just three years, BCP had grown a design team from 4 people to nearly 60 UX, UI, and design researchers. They had adopted new cultural principles including “Customer Centric: Our clients are at the center of all our decisions.” The battle to get a seat for design in the organization had been won, but how does the enterprise sustain and scale the design function? The question they posed to frog was, “how are we doing, and where do we go from here?”</p>
<p>BCP’s head of design, Mariela Sotomayor, and frog embarked on an intensive six-week program to answer these questions, starting from the shared premise that driving business impact requires much more than excellent design craft. The correct approach, environment, talent and passion is needed, along with a strong mind-shift from technology and business partners to truly embrace and appreciate design within the company.</p>
<p><strong>Methodological approach<br />
</strong>The main inputs gathered to support the assessment included surveys on existing design capabilities, at both individual and organizational levels, and project debrief sessions with teams. We also conducted a high number of formal and informal interviews with BCP and design leaders, design team members and other key business roles.</p>
<p><strong>Surveys<br />
</strong>A cross-functional organizational survey was deployed across leadership, design and key functions to evaluate how the design vision was being supported in execution by the talent, processes, structure and enabling tools/technology.</p>
<p>In addition, an individual design skills survey was deployed within the design team in a 360º format, with the aim of gathering not only the self-assessment from designers on their own capabilities, but also the perspectives from their managers, peers, direct reports, business partners and frog team. These skills were built upon the “Design Skills Coin” (Moneda) that frog created specifically for BCP.</p>
<p><strong>Project debrief sessions<br />
</strong>Twelve in-depth project debriefs took place. In order to maximize the effectiveness of the sessions, teams prepared homework that included a project scorecard and emotional journey map. Through the two-hour sessions, we understood what was done, why and how, as well as the impact. We also had the opportunity to better understand the designers’ skills and identify some of their main opportunity areas.</p>
<p><strong>On-site visit and stakeholders interviews<br />
</strong>Both during the executive visit by key leaders to the frog NY studio, and during the frog stays in Lima, we had the opportunity to really get to know the BCP and design leaders, the design team members, and other key business partners. Through individual and group interviews, as well as more informal conversations, we achieved a deep understanding of their perspectives as well as the strategic and cultural transformation context of BCP.</p>


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<p><strong>Outcomes<br />
</strong>In total, frog synthesized over 50 hours of intake, resulting in a set of impactful outcomes. At the individual level, frog provided each of the 52 designers with an individual scorecard including the results of their 360º assessment and their main strengths and opportunity areas according to the comments of their evaluators. Additionally, designers received a development guide devoted to helping them create a specific action plan to develop and grow their design capabilities according to the results obtained.</p>
<p>At the organizational level, frog delivered the design organization assessment and the resulting high-level observations or opportunity areas for the design area, as well as a set of 6 actionable recommendations and 60 tactics framed in a prioritized two-year roadmap for implementation</p>


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<p>The resulting roadmap is informing key areas of investment and growth for BCP as they continue to grow on their journey to excellence. BCP is creating a path for designers within their enterprise, adding strategic value to the business through close partnerships, and influencing the overall strategy of leadership as it learns more about customers’ needs through design.</p>


<p>Understanding the value of design for your organization is the first important step in what should be an ongoing conversation and assessment relying on cross-functional learning across design, business and technology. Design can push organizations to grow, to adapt and to innovate, but the organization itself must be part of that journey. Only if the whole organization truly understands and involves design in the early stages of the decision-making process is it possible to elevate design to the strategic level and, consequently, drive customer-centricity across the organization.</p>


Linda Quarles

Mariela Sotomayor

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<p class="b2-alt">Linda Quarles is Director, Strategy + Org Activation at frog. In her role, Linda provides a broad range of consultative services to build capability and improve organizational performance with clients globally. After more than two decades leading organization transformations from within, Linda brings empathy for leaders driving culture change, innovation and growth in organizations from startups to Fortune 50.</p>
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<p class="b2-alt">Mariela Sotomayor is Head of Strategic Design at BCP. At the bank she focuses on leading the design team and guiding projects through the perspective of human centered design. With an Industrial design background, Mariela brings more than 12 years of experience in product and service design and has worked with social organizations and in different industries tackling challenges related to education, public services, financial services and healthcare.</p>
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<p class="b2-alt">Nieves Padilla is a Senior Strategist at frog Madrid. Combining an innovative mindset and a practical approach to make data-driven decisions, she is able to conceptualize complex business challenges in order to drive change in organizations. She brings more than 8 years of experience in strategy consulting engagements involving customer experience transformation, organizational transformation and corporate and portfolio strategy for worldwide companies within industries such as financial services, transport, services or tourism &amp; entertainment.</p>
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