Over the past four years, Qualtrics’ Value Advisory team has conducted over 1,000 value assessments with XM professionals. These assessments have focused on securing budget for new XM investments, tracking the impact of XM programs, and quantifying the value delivered by experience-led actions. Here are some key lessons we’ve learned from this wide variety of projects:

  1. There is no absolute definition of value. Identify what is most important to your organization’s senior leaders and align your program’s priorities and efforts accordingly.
  2. Metrics must align with organizational value. Prioritize success metrics that represent value to your organization, in addition to those that represent value to your customers and employees.
  3. Actions transform insights into value. Don’t just generate insights, make sure they drive meaningful actions.
  4. Value needs to be a continuous focus. Track value on an ongoing basis to identify more opportunities to drive action, assess impact, and course correct as needed.
  5. 1st-party data is better than 3rd-party data. While industry benchmarks can help you get started, you need to define and track value using your own internally generated data.
  6. The best models are built on individual-level data. Develop your analysis based on the connection between your actions and their effect on individuals, rather than the average of a group.
  7. Finance teams are critical partners. Work with finance professionals in your organization to tap into their skills and organizational influence.
  8. Short-term and long-term results need to be balanced. Use insights from your experience data to make smarter trade-offs between short-term profits and long-term sustainability.
  9. Quantifying value is an exercise in causality. When you need to quantify your impact, go beyond correlations and seek to establish a causal relationship.
  10. The ways you create value will evolve over time. Mature your program by evolving your focus from cost takeouts to continuous improvement to strategic change in the organization.

Lesson #1: There is no absolute definition of value

Every organization has its own unique perspective on what constitutes “value.” While a majority care about “business value” – which does have a universal definition tied to cash flow – many are also motivated by other outcomes. Local governments often care about building trust and improving the lives of residents. Healthcare providers care about patients’ health outcomes. Brands like Patagonia, Toms, and Dove value social or environmental issues. And even financial outcomes can come in a variety of different forms, such as revenue growth, margin improvement, or predictable cash flow. So before assuming a universal definition of value, identify and align with the value outcomes your organization specifically cares about. To do this, pay attention to what your executives allocate time and resources towards and work with your leadership team to ensure your efforts are supporting the right outcomes. For example, if your executives regularly talk about entering a new market, assess how your program supports this objective. If your program doesn’t currently support this objective, determine how it might in the future.

While many organizations value cash flow, the Texas Women, Infants, and Children Program (Texas WIC) has a fundamentally different definition of success. Texas WIC is part of the Texas Department of Health and Human Services, whose mission is to help Texans live better lives. Because of this, Texas WIC’s definition of value includes the number of people benefitting from its services. With this important context, the team at Texas WIC leverages experience data to launch campaigns designed to attract and retain qualifying participants. For example, it deployed a digital marketing campaign called Start Now that asks potential clients (specifically, low-income pregnant women and new mothers) to fill out a short form about their needs. The form triggers follow-up from an appropriate agency staff member, making it much easier for individuals to get started with the program. Since launching this campaign, the agency has received over 180,000 online application submissions and the first sustained month-to-month growth in years.


Lesson #2: Metrics must align with organizational value

XM professionals often focus exclusively on the value they create for their customers or employees, such as score improvements, time savings, and better service. This is important but not adequate to meet all of the needs of executives, who are accountable for delivering business and organizational outcomes. Once you have established a clear definition of what your organization values, use it to prioritize, track, and quantify the impact of your investments and interventions. For example, use your organization’s definition of value to weigh the tradeoffs in a situation where a certain decision would improve cash flow but hurt the customer experience, or vice versa. This will also enable you to better communicate in the language of your leadership team. 

Chipotle identified factors that represent value to its employees (e.g. respectful workplace), its customers (e.g. fully staffed restaurants), and its business (e.g. revenue per location). It leveraged experience data to identify changes that would positively impact each of these. For example, Chipotle knew the importance of an employee’s first 14 days, and through its employee listening efforts, learned that manager behavior was critical for ensuring that new employees felt like they belonged. Based on this insight, Chipotle enabled managers to better onboard new employees, which resulted in improved employee retention, restaurant staffing, and revenue per location.


Lesson #3: Actions transform insights into value

This is one of the Six Laws of Experience Management. Actions are an essential ingredient for creating value. Although many XM teams generate a multitude of insights, they are often not the ones who can take action on the recommendations. In order to turn insights into actions – and ultimately value – they need to change mindsets and behaviors throughout their organizations. To drive action across the organization, an XM team can develop champions, improve its internal messaging, secure support from senior leadership, set up a closed-loop system, establish a Change Management function within the XM team, and more. To start, consider maintaining a list of the actions you influence. In addition to helping you assess how effectively you are currently driving change, it will help you prioritize which actions to analyze in order to quantify the impact of your work. 

Lumen uses the phrase “own the experience” to encapsulate the belief that everyone in the company is accountable for delivering great experiences. To build a culture of ownership, Lumen has not only democratized its experience data – with over 5,000 employees accessing this data every day – it has also helped employees respond to those insights with meaningful actions. This includes building robust closed-loop systems that hold individuals accountable for following up on customer feedback, removing roadblocks employees say hamper their ability to fix things on behalf of customers and other employees, and showcasing employees who are delivering great experiences to customers. For example, in response to finding that field technicians who feel recognized for delivering great customer service have nine times higher service resolution rates compared to their peers, Lumen developed a program to highlight and celebrate employees who create great experiences for customers. This program has resulted in a lower cost-to-serve, better CX scores, and greater awareness among the workforce about how they are empowered to take action for the customer.


Lesson #4: Value needs to be a continuous focus

XM professionals often default to point-in-time exercises when assessing the value created by their programs. These “look-back” exercises can come with downsides, including difficulties accessing historical data, an inability to design thoughtful experiments, and delivery gaps identified too late to act on. Alleviate these issues by continuously focusing on value as a part of your ongoing XM program. This is, in fact, such a critical activity, that one of XM Institute’s six XM Competencies, Realize, is entirely dedicated to continuous value management. Ongoing value tracking includes activities such as building a robust metrics program and conducting regular program value reviews. Consider establishing a monthly cadence to assess the performance of a small number of power metrics, the actions you drove over the past period, the actions you need to drive over the next period, and what support you need to implement these actions.

To cultivate an “Insights to Action” culture, ServiceNow’s CX team built a powerful closed-loop system, allowing teams across the organization to quickly absorb and respond to a constant stream of customer feedback. The team recognized that, in order to maintain this enterprise-wide focus on taking action based on CX insights, it needs to continuously and convincingly demonstrate the value of closing the loop with customers. One of the ways it does this is through regular reviews with key business partners, including Sales, Customer Success, Renewals, Go-to-Market Excellence, Sales Ops and Enablement, Product Marketing, IT, and Support. Its review process with field leadership is particularly instructive; the CX team provides updates on closed-loop adoption and performance against targets at the team level. This yields productive discussions around what is working and not working, what changes to make, and what additional support is needed. 


Lesson #5: 1st-party data is better than 3rd-party data

While XM professionals often have a significant amount of 1st-party experience data, they tend to rely on 3rd-party data — found in the form of benchmarks, statistics, and case studies — for program outcomes. This is because, ironically, 3rd-party data on customer and employee behaviors is often easier to access than 1st-party data. The nature of 3rd-party data makes it a great asset for early program activities (e.g. inspiring leaders to explore an investment in XM), but it falls short when you want to quantify the value realized by your program. For that, you need to use your own data. As you launch new XM programs, ensure you have the necessary pipeline of customer or employee behavioral and operational data to pair with your experience data. Common places to find this data include HRIS, CRM, CDP, and web analytics systems.

The XM team at Sunrise Senior Living identified an experience gap among employees who were voluntarily leaving the company – specifically that they were less likely to say that they felt like they belonged and were treated with respect. Based on this 1st-party data, Sunrise has driven a number of initiatives to foster diversity, equity, inclusion, and belonging (DEIB) among its workforce. For example, it developed enhanced DEIB training for leadership and DEIB toolkits for frontline employees. While many organizations struggle to quantify the impact of initiatives such as these, because the Sunrise team works with its own experience, behavioral, and operational data, it is able to quantify specific KPI improvements and financial impact from its efforts. It found these DEIB initiatives resulted in more than a 3% reduction in voluntary turnover, worth millions of dollars to the business, which empowers the organization to invest in similarly meaningful initiatives in the future.


Lesson #6: The best models are built on individual-level data

Establish the relationships between the experiences you provide and customer or employee behavior at the individual — not aggregate — level. Aggregate data, like customer churn rate, is easier to access than individual-level data as it can often be found via company reports and dashboards. However, aggregate data doesn’t allow you to account for the heterogeneity across your customer or employee base and can result in significant misunderstandings, such as a decision to invest heavily in white glove service for low-value customers. Work with the relevant finance, operations, or data teams within your organization to access the individual-level data you need. Ensure that unique IDs are in place so you can match individuals across data sources, like matching employee directory records with survey responses.

The CX team at a B2B manufacturer and distributor had been trying to understand the financial outcomes of their program efforts for a number of years. Like many XM teams, they had built strong executive support, broad visibility into key experience metrics, and a culture of driving action. However, they struggled to connect their program to financial outcomes. What finally allowed them to do so was access to customer-level behavioral data. This data allowed them to quantify and celebrate program wins, such as the results of a curbside pickup initiative, in partnership with the finance team. This elevated the credibility of the team as they went beyond reporting exclusively on experience metric improvements.


Lesson #7: Finance teams are critical partners

Finance teams have valuable skills and influence in the organization. They tend to know what the company values, how it is measured, and how to access the data necessary to assess the impact of initiatives. These teams are also often skilled at analyses like ROI and Customer Lifetime Value (CLV). Further, they can play an important role in advocating for the credibility and impact of your XM-related initiatives. Establish a regular cadence of connecting and partnering with your finance counterparts to align on desired outcomes, determine how to deploy initiatives in cost-effective ways, interpret the impact of interventions, and more.

The XM team at a technology company partnered with the finance team as part of its efforts to drive action and culture change. The XM team had already seen positive results from working with various business stakeholders who started making experience data-driven decisions. With these initial, isolated successes under its belt, the team then collaborated with the finance team to standardize this work. Together, they made “experience impact” a required dimension of all budget requests that would affect customer experience. This partnership both gave the XM team credibility and allowed it to scale customer-oriented decision-making throughout the entire company.


Lesson #8: Short-term and long-term results need to be balanced

Organizations are constantly facing tradeoffs between short- and long-term outcomes. Because customer and employee experience data can be useful leading indicators of how individuals might respond to certain changes, you can help your organization balance this tension by elevating insights about how customers or employees feel about their experiences. For example, certain service providers make it exceedingly difficult for customers to cancel their contracts. While this may reduce customer churn in the short term, it is unlikely to foster long-term loyalty or advocacy. By making your colleagues aware of how customers may feel about and respond to certain policies over time, you help the organization make thoughtful tradeoffs between short- and long-term outcomes. 

A global financial services company found that delays during money transfers were a leading pain point for customers. However, certain transfers need to be flagged for compliance reasons. While loosening its approval criteria might have boosted short-term profits, it would have come with significant risks to future profitability. To help with this problem, the XM team dug deeper into its data and uncovered that many of the transfer delays came from customers not understanding the need for precision when filling out their names. Based on these insights, the company designed a solution with clearer instructions to encourage care in completing forms. This small change resulted in meaningful decreases in both transfer delays and customer frustration.


Lesson #9: Quantifying value is an exercise in causality

XM professionals often leverage correlation analyses to claim the financial impact of a score improvement (e.g. a 1-point increase in NPS is correlated with an x% reduction in customer churn). Correlation, however, is only able to answer questions about observation (“When I see ‘A,’ how likely am I to see ‘B?’”). Establishing the impact of a program requires you to answer questions about causation (“What happens to ‘B’ when I change ‘A?’” and “What would have happened to ‘B’ if I hadn’t changed ‘A?’”). Instead of relying on correlations between scores and customer or employee behavior, establish a direct connection between your interventions and behaviors. For example, if you led an intervention to improve the sales approach of your frontline employees, your analysis would focus on which employees adopted the new approach and how their customers responded to the new behavior. Consider how to incorporate experiments into the way you deploy initiatives. This will significantly improve your ability to establish causal relationships between your interventions and improvements in customer or employee behavior.

A Telecom Provider in North America found that “smoke” was a common complaint during customer setups. Concerned by this theme, the team analyzed their data further and found that it referenced technicians smelling like smoke. They tested a requirement that smoke breaks happen more than 15 minutes prior to arriving at a customer’s house. Among participants, complaints about smoke virtually disappeared and first bill completion rates increased relative to non-participants. Because of how it deployed this test, the company was able to establish that the new policy indeed caused the KPI improvements and then rolled out the rule to the entire organization.


Lesson #10: The ways you create value will evolve over time

At the beginning of an XM program, value tends to be realized through cost takeouts like vendor consolidation and process automation. Programs then graduate to tactical gains, such as reductions in employee turnover due to managers taking effective action on pulse feedback. As teams develop their XM Competencies and increase organizational buy-in, they can start delivering deeper, strategic changes to their culture and operating processes. This could show up as redesigning employee performance assessments, adopting a new customer support model, driving the expansion into a new category in the market, and many more initiatives and transformations. As your program matures, push your team to deliver more than just cost cuts, with the ultimate goal of driving strategic change across the organization.

An insurance company in North America started its XM journey by deploying automatic call dispositioning for its agents, which led to roughly $1M of agent time saved per year. As the program progressed, it drove ongoing improvements to agent performance, resulting in tactical gains, including improved average handle times. As the program established increasing credibility and influence, it was able to drive even greater value through strategic initiatives like optimizing self-service channels.


The bottom line: XM programs need to step up their value efforts. 

Topher Mitchell leads the Center of Value at Qualtrics

Isabelle Zdatny, XMP, CCXP, is an XM Catalyst with Qualtrics XM Institute