The customer experience (CX) is increasingly becoming a make-or-break factor for businesses. A whopping two-thirds of companies across sector verticals are competing on CX, representing a nearly two-fold rise since 2010.
CX does not simply get the attention it deserves because it is not as tangible as say, RoI and other such vanilla metrics. Seemingly, not being straightforward to capture and measure does not diminish its importance. And this message is not lost on businesses with their ear to the ground, seeing this post Covid19 aftermath as a perfect time to adopt this metric and capture the RoI it triggers.
What is Return on Experience (ROX)?
To get a grip on what ROX is all about would be worthwhile to revisit good ol’ ROI: Investopedia defines it as a measure of the efficiency of an investment- a ratio of the benefit received from an investment to the cost of that investment.
ROI continues to rule the roost as the first among equals for metrics that measure the success of initiatives and even brands in their entirety, but as CX continues to gain traction, there is a new kid on the block- Return on Experience (ROX), which is upending the crown status of ROI.
So what is this ROX all about? Well, it holds the capacity to gauge the real value of personalized customer experiences through outcome analysis and self-improvement loops.
How does ROX work?
ROX enables businesses (both B2B and B2C) to focus on the networked business ecosystem as a whole. PwC has identified the following five specific elements that are present in any business environment and that constantly push and pull on one another: (1) pride, (2) influencers, (3) behaviors, (4) value drivers, and (5) outcome (see “Building ROX metrics reinforces a virtuous circle and amplifies value,” below).
These elements subsume employee experience (EX) in equal measure as CX. After all, employees are internal customers and their experience (EX) together with CX constitute the binary building blocks of the ROX framework. Done right, ROX will trigger a virtuous cycle of benefits mapping into these binary components leading to the dynamic optimization of overall performance.
How is ROX different?
It helps emerge the interdependencies among disparate business systems and their respective success metrics feeding into the bigger ROX picture. ROX also makes it possible to tie CX and EX investments to the outcomes enabling an overall strong business performance, efficient operational execution, and a healthy work culture that attracts top talent and enhances corporate reputation.
To conclude, we feel the traction gained on ROX as a preferred success metric, have more businesses rethinking their approach to CX, reviewing the interrelationship between CX and EX, and reevaluating the effectiveness of their performance management systems. The day is not far away when investors start asking tough questions about ROX. Unfortunately, an assemblage of businesses, particularly Small to Medium Enterprises (SME’s) are way off the mark from measuring any of the ROX components.