James Spillane
Most company executives don’t think that their accounting department is in the Customer Experience business. True, very few members of financial management teams normally have a reason or opportunity to communicate directly with their company’s customers unless they have to chase accounts receivable problems.
The new CFO of a start-up I was working for took pride in maximizing operational cash flow velocity. One of the minor tactical tools used was a few days’ increase in the window for reimbursing employees’ expense reports. This change handsomely improved the short term cash flow statement. However, over the next few quarters, a noticeable trend in the growth of outstanding accounts receivable started to raise red flags and call for analysis.
You may ask what this has to do with Customer Experience Management. Interestingly enough, all measurements of customer satisfaction and loyalty, both objective and subjective, started to move in the opposite direction from the operational cash flow velocity metric within the first two months of the change in reimbursement policy. The Customer Experience Manager was reporting this troubling trend for months, but nobody thought of a connection. In fact, nobody ever looked at financial and loyalty metrics together at all, and that is why it took so long to link the cause and effect.
It turns out that the technically complex product the company sells routinely requires professional services personnel to visit customer’s premises to help them ensure successful implementation and operation. The company’s engineers spent a lot of time making customers happy, and the company was paid well and on-time for their efforts. However, improving the velocity of the company cash flow negatively impacted personal cash flow of the front line employees, as they had to wait for sizable expenses to be reimbursed and had less cash for their personal expenses. They started to avoid and delay the projects that required travel, and customers fell victim to financial efficiency efforts.
Lessons Learned:
- Customer Experience is a holistic matter – every single function of the company affects how customers perceive the entire enterprise. Of course some functions affect more than others, but they all do.
- The Customer Experience measurements are predictive of the growth or demise of a company (product or brand). The trends are critical indicators of trouble, particularly if they are gauged against market averages.
- Monitoring the correlations of trends between Customer Experience, Operational and Financial metrics allows for the fast diagnosis of potential treats to the health of your business.
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This article was written for Business 2 Community by James Spillane.
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Great article, Gregory (as well as your title). This is a key point that gets so often overlooked. Providing a real world use case is a powerful way of making the point. Most companies only focus on sales, service and marketing. Yet every touchpoint impacts the customers’ experience.
In addition to finance, I would add legal. In high value sales, legal’s involvement can have unintended consequences. Rigorous contractual terms, endless red-lining cycles, slow responsiveness, and talking in legalese introduces doubt into the customer relationship.
Doubt breeds mistrust which damages credibility and puts into question repeat, future sales.
COmpanies need to map their entire customer journey, especially post purchase to understand all touchpoints, actual vs. expected experience, and the emotional impact of those experiences on the overall relationship, today and into the future.
You might find this article interesting. http://www.forbes.com/sites/christinecrandell/2013/03/23/is-your-org-chart-driving-customers-away/