The ROI of Endineering. Part 3. Value on consumer experience at the end?

Some say that consumer experience needs to demonstrate its value, arguing that it can occasionally be considered as an indulgence, neither practical nor profitable. Certainly, ends are perceived as such for many people. And I understand their logic, but with fresh thinking there are clear benefits for businesses to engage in the way people leave a consumer relationship.

To consider the business case for ends, I want to look at a piece of work by KPMG that models the value of investing in customer experience. They say “Capital investments and operating costs to provide these experiences will continue to climb. To be effective and invest wisely, organizations need to gain a thorough understanding of Customer Experience (CX) Journey Economics”

KPMG’s CX Journey Economics aims to illustrate where the balance lies between what sort of experience is expected by the consumer and how much money a company could invest in that customer experience. This provides a useful basis for looking at the value of investing at the end of the consumer lifecycle.

KPMG focus

“We recommend linking investments designed to repair experience shortfalls to specific customer activity measures such as attrition, repurchase rates and/or customer lifetime value. Such measures can then be translated into a financial impact.”

Companies such as KPMG see the benefits of customer experience being focused on the acquisition and usage periods of the consumer lifecycle. Im short they value a moment in time - the present. The best of modern businesses, however, are considering external aspects far more as part of their wider responsibilities. These responsibilities can’t stay unseen in factory efficiencies, or product material improvement. The consumer experience needs to be part of a sustainable future. Not valued just by current customers, but future impact. Consumer representatives, legislation, and governments are all expecting more responsibility from companies. The most fruitful new areas will be expanding that focus to be experience-based. Improving off-boarding interfaces and methods of product disposal, deletion and returning items, are all good examples of off-boarding experiences.

Cost of the impact

The change in attitudes towards frequent flyer programs is a very good example of the consumer experience being expanded beyond the initial intention of the product. Once an accolade to be proud of, Air Miles are now considered to mark negatively against a person’s social responsibility. It is clear that the balance of customer experience with something like Air Miles has eroded over time.

Value in consumer experience investment can’t be a snap shot. An updated version of the KPMG model that represents the long-term risks might look like this. It shows an experience that fades over time. The consumer experience has a lingering shadow that exposes the negative aspects of the engagement. It also exposes the business to an unmitigated risk.

This reveals a tangible target for investment at the end of the consumer experience and a legitimate purpose – to halt the erosion of the desired consumer experience over time.