Episode 3: When Customer Experience Delivers ROI

In this episode of CX Matters, host Bram De Vos brings together two leading voices in customer experience: Michel Stevens and Horst Remes. Michel brings the lens of leadership and culture, while Horst approaches CX through design, experimentation, and evidence. Together they explore the question that often sits unanswered in boardrooms: how do you turn customer experience into measurable financial impact?

They discuss why CX has historically been framed around emotions rather than business value, why linking experience to revenue and cost reduction has proven difficult, and how organizations can finally bridge that gap. From the role of strategy alignment to the cost of distrust, the conversation covers both the revenue upside of loyalty and the efficiency gains of happier customers. Michel and Horst share practical examples of redesigning processes, challenging internal assumptions, and reframing CX as a business investment just like any other.

They also explore the messy nature of ROI calculations, how to communicate value to CFOs and C-level leaders, and why CX should always start from real customer needs rather than internal logic. The result is a grounded, candid discussion on turning sentiment into evidence and experience into cash.

A sharp finale to the three-part series on customer centricity, culture, and measurable impact.

Learn how Hello Customer turns feedback into business improvements: https://www.hellocustomer.com

Transcript

SPEAKER_01 0:00

Welcome to CX Matters, a podcast where we dive into all matters CX to find out what really makes the difference, what moves the needle, and what makes customers tick. CX Matters is a podcast powered by Hello Customer, the platform that helps organizations turn feedback into real business improvements. My name is Brom De Voss, and I'm your host today. And today I am joined by Michelle Stevens and Horst Rimes. Michelle approaches CX through leadership and culture, Horst through design and evidence. Together, we'll look at how to turn customer experience from stories and sentiment into numbers and proof. From experience to evidence, from metrics to cash. We'll be talking return on investment for CX. Welcome Michelle, welcome Horst. Hi, hi Bram. Hi Bram. Nice to see you guys again. Now, let's dive right in. Um I'm going to throw the spanner in the works, so to speak. Because ROI is a topic that is discussed very, very often among thought leaders in in CX. The discussions or the debates have been going on for years. And you both have the same argument. You both argue that CX isn't just cut some kind of fluffy feel-good initiative, but a business lever. So why is it so, do you think, that linking CX to financial outcomes is still so hard?

SPEAKER_00 1:27

Well, I think that we've been told for many years that uh CX is about emotions. Um it's about uh understanding the customer emotions and then playing to that. And um, yeah, just as a result of that, uh we've been trained that way. It it has always been about emotion, emotion, emotion. And nobody actually taught that okay, so that those are the rainbows and the fairy tales. Um let's go beyond that. So there was never a driver to really understand that really well. And I think it's only yeah, in the recent years that people will go like, hmm, okay, so we're not paid in smileys, we're paid in euros. So how does that work actually?

SPEAKER_02 2:04

I'm often fascinated why it's so hard. Well, it shouldn't be hard. I mean, CX is an investment, like you would have an IT investment. So wh why is it not hard if you invest in IT and why is it hard in you if you invest in customer experience?

SPEAKER_01 2:19

I've I've heard the argument very recently is that for a lot of investments that companies make, nobody cares about the ROI. You just assume it's there. And and that's very, very often the case as well. Some some things are not questioned. Yeah. And some um some argue that customer experience people are being forced into talking about ROI and it's not their normal terrain. What do you think about that? Well, uh, I will let you go uh on this one, Horse.

SPEAKER_02 2:48

They should. They should. I mean, why why are we doing this? That's the fundamental question. Why are we doing customer experience? Well, there's only a few levers that we have to run a business well, right? And and it's very simple actually. It's either we have more revenue or either we reduce costs, right? That's how we maximize our profits. And so customer experience can increase revenue, and that's that's what everybody knows. And so, yeah, okay, if we have a very good service or very good products and and with related service, yes, we can sell more to the same customers, they'll buy more from us. Yes, they'll be loyal longer, and they'll they won't go away that quickly. That's also interesting, or they'll talk about us in a favorable way, and so they'll bring other customers. So that's the income side. Uh obviously, there's also a cost reduction side, which is often forgotten. Uh it is and and it's it's just sometimes a lot easier and a lot cheaper to work with satisfied customers than with frustrated customers, especially when something goes wrong. And that's what's often forgotten. The cost to serve of a satisfied customer is lower.

SPEAKER_00 3:55

Yeah. Isn't that because uh in the past we didn't make the connection between uh a customer experience strategy and a business strategy? That would they were separate things? Like, I mean, if you look at from a stra from a strategic point of view, um uh people ask me, so how do you formulate a customer experience strategy? Uh first question is but do you need a separate one? Because it's very much intertwined with your business strategy. If you have an offensive strategy, like uh you're going to focus on sales, on acquisition, obviously that is going to reflect in your customer experience strategy. And vice versa as well, if you have a defensive strategy, then you're going to do other levers, you're gonna work on a churn, you're gonna work on things that will cost less money and stuff like that. So is it because of that that we never made that connection before on a strategic level? Right.

SPEAKER_02 4:40

Yeah, I I I just think that that um everybody who's working in customer experience should always make the reflection uh what am I contribute contributing to now? And uh Roger, if it's off as offensive or defensive, what is the strategy of my company and what what am I now supposed to do in order to help that uh strategy move forward?

SPEAKER_00 5:03

Yeah, yeah.

SPEAKER_01 5:04

So yeah, we're in full agreement there. I'm not I'm not surprised.

SPEAKER_02 5:08

One thing that is also often forgotten, apart from the cost to serve, is that um uh a customer experience, a process that satisfied customers that satisfies customers, often is also uh more efficient, and that is that is what's often forgotten. A well-designed process does both, it satisfies the customers and it's also more efficient. And for instance, if you if you give people peace of mind, they won't be calling you all the time, right? And I you don't want to know how how many questions we answer two, three, five times because the question came in, we haven't answered in time, then the question came in by email, for instance, that same person is calling us in the afternoon, is sending an SMS or a WhatsApp the next day. And so actually three people are are working on a question that could have been answered by one person.

SPEAKER_01 6:02

That could have been answered or that that should never have been answered or asked in the first place. It could have been avoided altogether. And uh when I was driving here um to the studio today, we were talking about all those those bad customer experiences where you're forced to send a message, call, to find something, you know, to to get some more information. And if only the company would know that there is a gap in their the information they give, if they would fix that, nobody would have to call them. So the experience would be better and there would be less costs because nobody would have to be on the call center.

SPEAKER_00 6:35

Yeah, but sometimes you have to fight the internals of an organization. Like uh for instance, uh uh 15 years ago, I was uh at the head of a uh a large customer service operation with uh with a reverse logistics uh part. So that meant that uh people could call call in and uh say, well, my my device is broken, uh so uh you need to fix it, right? So this is 15 years ago. This is way before um ball.com or any other said uh, hey, just keep your device, right? So it's a long time ago. Um and at some point um we were looking at the the numbers and I said, Well, we're paying a lot of things for that reverse logistics part because uh what a customer did was actually he send it to us, then we had to examine it. Is it really broken? And then only then we would send a refurbished product. And so I said to the guys, I said, why do we do that? What is our goal? Our goal is that that customer continues to use our product. It is not the device itself, it's the consumables that are in it. So why don't we send them straight away a new device? And I was a heretic. People looked at me and were like, What are you going to do? Are you maybe they'll send us bricks? And I was like, Yeah, maybe some people will do. But 98% of the people will not, and they will actually use our product within two days. I mean, it's that simple. We save 300,000 euro a year just by uh doing it differently there.

SPEAKER_01 7:52

But isn't isn't it the case also that in businesses there is sometimes, you know, what is called in the literature the Homo economicus is is very strong. And there therefore there is little trust in the consumer, in the client, in the customer. There's there's little trust. And so the worst is assumed. Therefore the processes are built and engineered to deal with the worst of the cases, whereas the worst of the cases maybe.

SPEAKER_02 8:21

That is so interesting what you're saying, because that's very expensive. A lack of trust is is hugely expensive. Hugely. I was I was working with um with um an energy company, and so if if for instance a tenant leaves a house and another tenant comes in, and that could be a small business, could be a house, uh you have they can't take the meter, right? The the meter stays there, it's fixed. So they they have to carry over uh what the meter says at that moment in time because uh each has to pay their own part. Yes, and so one of the things was that you have you need two signatures to send the meter readings to to that company because then you're sure that they agree on the meter readings. But customers found that so cumbersome, and you had to check all those signatures, right? So we thought, well, in people just said, well, this is it's sometimes undoable to get together at the same time. And in so um we said, well, how often does it happen that the meter readings from somebody going out and somebody else coming in at a later stage are different? How many times does that actually happen? And they're argued over 50%, and that was true. Okay, so we are oh damn, okay, that's that's a bummer. But when we started investigating, the difference was a few cents. Yes. What happened was the meter started uh continued to read something because like a fridge was still on, wasn't switched off, like a minor consumption. And so the the really big differences were only a few percent. There you are. And so we we turned that whole thing around where we said, okay, we will not require two signatures anymore. But then obviously the consequences sometimes you'll have a discussion. That will happen.

SPEAKER_01 10:07

Yeah, and uh you both know that I'm I'm a great book lover, right? And one of one of the books that I think about right now is a book by the Dutch guy, Rutger Brechmann. In English it's called Humankind. And it's actually it's it's overhauling all the assumptions that we as as modern people make of how distrustful we should be of other people. And he says, No, most people are very kind and very honest people. And yes, there will therefore be sometimes somebody who is not. But most people are. And yet in movies and literature, we we are we are trained to believe, do not trust the other one. And our civilization is only a very thin layer of veneer, and underneath there is the beast, right? The L'Enferse et les autres, and all those things. And he argues, he says, well, the opposite is actually true. And what you say, the example you give is is is yeah, speaks volumes in that respect. And I think that's very true. But of course, yeah, it's very difficult sometimes to argue, especially with people who are a little bit distrustful by nature or should be. Um and very often people in positions of CFOs, they are, you know, they are they are wary of being tricked and fooled, and they are they are sometimes very inclined not to believe in human nature too much. Don't you think? Yeah. Yeah.

SPEAKER_00 11:29

Yeah. Well, uh I also think that uh CFOs are are humans just like you and me. Um and they are Do you really think that? Yeah. That is astonishing. I really do. I I've met quite a few who actually are uh living and breathing as well. Um so so for me, it is always a a matter of uh finding the right language to speak uh to each other. Um I've seen, and and this is uh honest to God, I've seen um CX programs run with a back of the napkin kind of uh calculation. And really, and that is that has uh a lot to do with how it is positioned, how it is positioned against the business strategy, uh the internal culture, how that is positioned as well. Um and I've also seen uh CX programs that that run with very deep calculations on how are we going to measure customer lifetime value and how are we going to make sure that the ROI is secured. There is something to say for both of them. And I always fall back on my position. Speak the language of the people that you have in front of you. If it is C-level who are very rational, then try to make your point and make it come across. Sometimes I also compare it with um, and and I think you referenced it as well uh earlier on, is that do we uh argue over the ROI of a factory floor? We need to build a factory. Uh do we argue over the ROI? We don't. We just build the uh we we build the the factory, and yeah, the ROI will come. I'm I'm pretty sure. Never nobody ever calculates that, or maybe somebody will, but sometimes you also need to take things from a principle uh point of view. I'm not making a the case against a business case for the clear sake of clarity. But yeah, it it depends on who is in front of you.

SPEAKER_01 13:11

Aaron Powell I would I would agree with that. And I also think that you know, in terms of speaking with CFOs, very, very much I do relate with you have to speak the language of the person in front of you. And in fact, CFOs are human too. That is they are they are accountable for a number of things. So it is only logical that they are looking for to be sure, right? Peace of mind is very important for them as well. But then the thing is that um we do still, I believe, need to teach, and this is this is you know an appeal to the both of you, and I'll also include myself, because you know, guilty as charged. We also have to teach the people within the CX community more about how to do it. Because what we do, and today is an example, I mean we're talking meta about this today in this in this in this podcast, and it's it's very comfortable to do that. But I think that what we should add at some point is an actual lesson of how could you give a couple of examples of how do you calculate it, be it on the back of a napkin or be it very extensively. But you, Michelle, you you you run an academy, you run the CX Academy. So how do you approach that in in your courses?

SPEAKER_00 14:18

Well, as I said, you can make it as easy as as you want and as complex as you want it as well. Uh the reality is that um return on investment on customer experience is very messy. It is not always very straightforward. Uh people in marketing have been kept fighting that for decades now, and they still haven't figured out how to prove the ROI of marketing because there are a lot of influencers that you can take into effect. Like, for instance, an investment today will not immediately yield results tomorrow, or even not next week, next month, next quarter, right? Aaron Powell Which is not different with advertising, for instance, right? Exactly. There you go. Same problem. So again, you you make it as complex and as easy as as as you want, actually. But the the question I always ask is what are you trying to prove? What are you trying to achieve with the business case? Is it a uh is it to to to get more budget? Is it to justify your investments? What are you trying to do? What is the rationale within that within that organization? That's where I always start. And then again, you can have many uh uh ways of calculating uh and there is there are even as many uh ways to disprove whatever you said. Like for instance, I like uh customer lifetime value, for instance, as a metric to to to beg against. Uh but you could also say, but yeah, but CLV is something that looks in the past and makes a prediction for the future. So CLV is a forecast. Yeah. Okay, yeah, that's true. So there are always upsides and downsides, and that's why I say it is messy. It is not as black and white as people would like.

SPEAKER_02 15:48

But then again, every business case is a forecast. Yeah, it most certainly is. Yeah. If we do an investment in IT, we also rely on a forecast. What is that IT going to save us and what is it going to bring us? It's the same thing. It's only for some magical reason it sometimes seems more difficult with customer experience. I I still fail to understand why that is.

SPEAKER_01 16:09

And and tell me then, Horst, because I I understand what you're saying, I hear what you're saying, I relate to it because I recognize that. But why is it then that it's still such a struggle? Because you make the point, it shouldn't be. It's it's evident, and yet this is such a a contentious topic. This is really uh you know a subject of discussion. How do you explain that then?

SPEAKER_02 16:33

I think like it's it's sometimes the uphill battle. If if I talk about an IT system, let's say I'm convinced we want a certain IT tool, we want this tool. And now my mission is to prove to everybody that this is the tool we need. That is going to be an uphill battle. That's going to be difficult. If we took take it the other way around, if we see what is the business need of our business, what what do we want to aim for? What is our strategy? Where do we want to go? And then we say, okay, if we want to go there and everybody agrees, what do we need as tools? And okay, we need a tool that does such and such and such. So what is the best tool going to be? If you take it that direction, it's going to be much easier. But that's often not what we do. Often we see a pill battle. Yeah, we want we want to we want to install a customer experience idea, and then we want to prove that it's going to help us, which is a strange approach to me.

SPEAKER_01 17:31

If you because you you uh you lead one stone, it's a consultancy company in customer experience. What you told me about that is what you are looking for first and foremost, you and your people, is the buy-in from C-level. Um, if you have those conversations, what do they look like? Is it is that always a conversation about ROI, or is that what how do I envisage that?

SPEAKER_02 17:53

Well, it's not always about ROI, but it's always about business goals. It's and never about a gimmick in customer experience. It's like, okay, where do we want to go? What do we want to be? And so the the question I try to answer as soon as possible is we've got two people that are talking about us, what are they saying? What do we want them to say? Right? And and so that is that will that will actually determine how we need to create an experience, how we need to develop our processes, how we need to uh adapt our offering.

SPEAKER_01 18:29

It could also be you you told me that you really, you know, from from the get-go for a project, you really challenge sea level on that as well. You really want to understand is it is there interest in what we're gonna do genuine? Because you know that some of the things that you're gonna bring up aren't gonna be easy. You're going to challenge certain things in processes at some time and you're gonna do experiments the way that the way that you do it. Exactly. And you know that sometimes these things will be uncomfortable. So from the get-go, you challenge those sea levels a lot. Can you can you say something about that?

SPEAKER_02 18:58

So the the question is, is there a clear strategy? Do we know where we want to go? That's the first question. And then the second question, as soon as that's clear, the second question is um, can we explain that in a way that makes it clear to everybody in the organization what their role is in in that uh strategy? That's the second layer, and often you have uh you have a more high-level strategy that everybody in upper management understands, but everybody in the organization needs to understand what it means for them. So that translation to okay, what does that mean for everybody else is is important. And as as soon as that becomes clear, all the rest becomes a lot clearer. And then obviously we want we want to experiment with things because we never know how something is is going to turn out exactly, but we can always measure is it contribute contributing to what we wanted or not. Yeah, I understand.

SPEAKER_00 19:54

Yeah, and uh uh to add to that, I think it also it has to do with uh how well do we understand our customers. Like everybody knows their customers. Yeah, do you don't have to do research on it, uh don't do it because we we know we know our customers, right? Exactly. And and and I uh very often uh push back on that one, obviously, uh, because yeah, I I got a question. This is again a a decade ago, before we had apps everywhere. And somebody said, Yeah, we want to build an uh an app so that when there is a car accident, um somebody can take pictures and upload it directly to us so that we can start the insurance claim. And my first question was, why does that customer have the app on their phone? And I said, No, you don't have to ask that. That is something you assume that they have. I said, I'm not gonna assume that because very the the this will drive the solution because if you assume that they have an app, then you will think in terms of an app. If you assume that they are just a customer with you, they don't have an app, then a web application will be much more smart because that is something they will have when they have it when they have an accident. Obviously, they didn't go for uh for me. But but I always start with okay, so what is a functional need, what is the emotional need, and what is the social need of that customer?

SPEAKER_01 21:08

Those three, where do you get those from? What is that something that you you kind of you sketch those out at the beginning, those three kinds of needs? Where where does that stem from? Yeah.

SPEAKER_00 21:18

Um so um I listened excitingly uh to the previous podcast with with Horst, and I was like, ooh, Daniel Kahneman was mentioned. And I said, Yeah, well, Daniel did a lot of uh very interesting research on how do me people make make decisions, how does that work, and and what levers do we need to pull to make a decision? That's one. And secondly, uh what I really like to work with is jobs to be done. So, what is the job to be done of that customer, right? And we are very, very good at um doing the functional things in in organizations. We know uh how to process an insurance claim, for instance, right? Uh but uh then to your point of certainty, we do not understand why we need to be swift. With our answers when the customer asks, so when do we need to pay or when do we need when when do we get our money? A great example was within uh with a leasing company. And they had a very uh bad experience at the end always because when you turn in your car, uh obviously there could be exactly yeah, yeah, the dreaded check. And uh one of the costs that uh is always there is that the rims of the car, right, they are damaged very often and it can lead up to someone speak for yourself. Well, I cannot park a car, sorry, Harson. But the thing is that you get that notice really at the spot, on the spot, right? And and what people forget is that that comes as a financial surprise for too many people. So the question is not how are we going to mitigate that at that moment, how we're going to mitigate it six months ahead and give that customer a heads up. That's not a functional question, that's an emotional question, a social question.

SPEAKER_01 22:54

Fascinating thing, that whole social level, because we we talked about that a couple of months ago. And I suddenly came to the realization that I'd never explicitly talked about that in my life. Whereas the effects of it I feel every day. You know, that whole social thing. And you know, with what we do at Hello Customer, we we we measure customer satisfaction. And what so many customers, I mean clients, tend to forget is to be outspoken about what they do with the measurements. Of course, they have to look at what the return on investment is for sure. But one of the returns of on investment is communicate about the fact that about the fact that you're asking people's opinions and doing something with it. Because that's going to be the social lever in place. So that's really something that that struck me at that time. Um if I were to ask each one of you, and you could you could give us, you know, you give one big topic that you that you believe would help the listeners to bring the point of return on investment across. Um, what one message would you each give to a CEO who is skeptical about the financial value of CX? And and I'm gonna ask both of you separately, so it has to be a different answer. So the person the person who comes first is the lucky one. And the lucky winner today is Mr. H. Remes from Gems.

SPEAKER_02 24:13

All right. I I would say you can lead the horse to the water, but you cannot be the water. You can lead the horse to the water or the horse also. Yeah, to the wine, I I'd say. But excellent. Yeah, you can lead the horse to the water where you you can't make it drink. Right? So uh customer experience is just one strategy, it's not the only uh sacred strategy. You you can be better at other things if you want to be. And either you're the cheapest or you have the very, very best products, and all the rest of us has to be customer-centric. And so um if you if you see that, obviously you can uh you can do great things. If you fail to see it, that that is also fine. I mean, there's probably other levers that you can uh that you can use.

SPEAKER_01 24:59

Yeah, okay. Um before I I ha give you the floor, Michelle, you know, you can have the best product, you can have the cheapest product, but everybody, you know, the rest of us will have to deliver a good customer experience. Well, there's basically those three strategies that you can have.

SPEAKER_00 25:14

Um Yeah, but that's what you see in reality happening right now, right? Uh I often uh use uh Ryanair as a as an example and I peg uh Wizard against that. And um Wizard and Ryanair, they do basically the same thing. They're cheapest, right? That's the battle they fight. Um but in reality, what you see in their approach towards customers, uh Wizard is that that little bit more customer friendly. I'm not saying that they're customer-centric, they are, and they have pretty good customer experiences, both of them. I will make that argument later on in another podcast, maybe. But um But that is the battle that you need to fight. If you are not the cheapest, there is something else that you need to go up for. Um that is for sure.

SPEAKER_02 25:54

Aaron Powell And funny thing is you can only be the cheapest in one way. Yeah. There's only one way to be the cheapest. But there's more than one way to be to have the best product. And there's also more than one way to have be to have the most or the best customer experience.

SPEAKER_01 26:07

Yes. So that brings me to the question to you, Michelle. If there would be one argument you would present to a CEO that's skeptical, what would be your one definitive argument?

SPEAKER_00 26:17

Problem is that I would agree with Horst. Uh but that's a tragedy.

SPEAKER_01 26:21

I mean that's not that's not how we can make podcasts. I mean you don't you don't understand the principle uh here.

SPEAKER_02 26:27

No, it's on your shoulders to make it interesting now. Exactly, exactly.

SPEAKER_01 26:31

Putting you on the spot. Sorry about that.

SPEAKER_00 26:33

That's all right. No, no. I was thinking about because Horst was uh giving an explanation. I was like, yeah, I totally agree with that. There's one thing I would like to add, and is that that's linking it to the business strategy. That's the the link I always try to make. Is that because that will define the direction of your customer experience. And again, I fall back on on my binary solution. If if you are looking for acquisition in your business strategy, you need to be looking for acquisition uh in your in your customer uh customer experience strategy. They need to shake hands. And once you can show, like whatever we are going to do is going to help you achieve your goals. That is the only mission of our customer experience team. You will get them on board. You will get them on board for sure.

SPEAKER_01 27:18

Amen. Amen to that. Well, thank you both very much. That's all we have time for today, but thank you very much. And this also wraps up this special three-part series of CX Matters. CX Matters is a podcast produced by Hello Customer. If you want to discover how your company can act smarter on customer feedback, visit HelloCustomer.com. Now, if you haven't yet, you can check out episode one with Michelle Stevens from CXM from Customer Friendly. And that's about customer-centric culture as a compass. And that's the first episode of our podcast, CX Matters, and episode two with Horst Remess, and we talk about the myths of customer experience. We bust them as we go along. Together they complete the full picture, the full trilogy of a podcast. Thank you all for listening. Goodbye.