CX optimisation is great, but just one side of the story.
How Decision Intelligence (DI) has arrived to support, augment and automate business decisions.
“Is it worth it to improve Customer Experience?”, or
“Is it worth it to improve “simply everything” in business?”
It sounds like a provocative question, right? “Of course, we should improve our CX, it’s a key differentiator for every business” as some may say.
However, it’s not so simple and let me give you a practical example – an example that comes very often in discussions with our clients:
Let’s say that we analyze one of the most typical CX metrics, the Average Handling Time (also known as AHT), which is the average duration of the entire customer service transaction, from the time the customer initiates the request until her issue is resolved; and that this now stands at 5h. Is it good to bring it down to, let’s say, 4h? If we think about it as consumers, it is a definite yes, as we all want our issues to be resolved ASAP.
But, if it comes to the actual business value to be brought if we reduce it to 4h, the answer can be more complex, right? You may have to bring in the equation notions as “what will the cost be like”, or “what will be the benefit in terms of revenue”, so that you can evaluate the Return on Investment (ROI) and finally decide to proceed or not!
This is the growing field of Decision Intelligence, a process designed to help organizations make critical decisions faster and more accurately. Integrating data, analytics, and AI that allow the creation of decision intelligence platforms to support, augment and automate decisions.
Decision Intelligence technology will help us in Pobuca to answer the “is it worth it” questions of our clients. Our focus is on Customer Experience and Loyalty, therefore the examples will be from this field – however, DI applies to any critical business decision!
We are currently working, being on a Research phase, on 2 new Decision Intelligence modules for Pobuca Experience Cloud, Pobuca Elasticity, and Pobuca Simulation.
Pobuca Elasticity intends to pinpoint which CX metrics relate to the Customer Satisfaction Index (CSI) KPI, and what significance they have. The CSI KPI is directly related to overall Customer Experience, in other words, raising CSI means that you offer better experiences to your customers. Let’s take the example of the Average Handling Time that we discussed before. With Pobuca Elasticity and its Decision Intelligence technology, we will be in a position to tell our clients by analyzing their data, that if they reduce AHT by 1h, this will increase the Customer Satisfaction Index, for example by 2%, and from 75% will go to 77%.
Moreover, Pobuca Simulation addresses a major issue that businesses have regarding the Customer Experience: “is it worth it to invest X Euros to improve a specific CX metric – how much revenue will it eventually bring to our business?”. With Decision Intelligence, CX metrics will be the inputs for the forecasting technology of Pobuca Simulation! It will allow our clients to predict the impact caused on their revenues by every improvement to be made on their CX metrics. Let’s take once more the example of Average Handling Time and the analysis whether it’s worth it to reduce it from 5h to 4h:
- To reduce it by 1h, we will need to launch a Virtual Agent as a frontliner to our Customer Service and the cost is €100k.
- If we reduce the AHT by 1h, the impact on CX and CSI will be 2% (this will be an input from Pobuca Elasticity).
- If we improve Customer Satisfaction Index by 2%, this means also an improvement of 1.4% to the Customer Loyalty Index (CLI).
- Customer Loyalty Index is directly related to the average basket and purchase frequency and let’s say that they will have an improvement of 3% each.
- If the average basket and the purchase frequency improve by 3%, this has a direct impact on revenues, and we will see an increase of, let’s say, €500k.
- The gross profit is 40%, so we will earn 40% * €500k = €200k and spend €100k for the Virtual Agent, so yes, it’s worth it to build it!
So, below you may see how Decision Intelligence will change the product journey for Pobuca Experience Cloud and our clients. It will turn some parts of the journey that are based on consulting services, into a Decision Intelligence software:
Every day, your organization is confronted with a multitude of decisions from all directions. In growing or already large organizations, the complexity of decisions increases, and being able to respond effectively to changing markets is paramount to successful leadership and the direction of your organization.
This is why implementing Decision Intelligence in your operations can help your organization make quick, accurate and intelligent decisions that help you ultimately deliver on the promised return on investment.
With CX and Loyalty in particular, the first step is always to measure them and then decide whether or not it’s worth it to improve them.
To assess where you stand with your CX, signup here: cx.pobuca.com