💰 CX Revenue vs. CS Revenue vs. Sales Revenue

Hello! This is a sample of Customer Experience Leadership Value.

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Does Value = Revenue? Yes, plus much more!
Value includes differentiation, timeliness, consistency, convenience, enjoyment, revenue, and cost savings from stopping what bothers customers.

Does everyone contribute to revenue? Yes!
— Marketing communicates value
— Sales collects value
— Customer Success ensures value
— Customer Support rescues value
— Non-customer-facing groups create or limit value by their decisions and actions. (Senior Leaders, Finance, Engineering, Manufacturing, Operations, Partners, Human Resources, Procurement, Legal, Facilities, Safety, Quality, and Information Technology groups, etc.)

Customer Experience Management aligns end-to-end value across all of these customer-facing and non-customer-facing groups. Do you have CXM?

CXM is a distinctive need apart from Marketing/Sales/Success/Support in EVERY for-profit, non-profit, and government organization.

• Who else is discovering high-potential customers’ aims and aligning your entire enterprise accordingly? Nobody, and that’s costing you greatly! It’s robbing revenue.

• External influence is the strength of Marketing, Sales, and CS.

• Internal influence is the necessary strength of CXM.

Expansions in Success and Support are NOT signs of customer-centric business management. Instead, CS expansions indicate:

• Poor alignment by Marketing and Sales.

• Sloppy management by non-customer-facing groups.

• They’re out-of-sync with customers’ aims!

• When they’re in-sync, Success and Support shift from fire-fighting to more proactive and creative efforts for new strategic advantages.

Misalignment with high-potential customers’ aims in any area of your company is a revenue roadblock.

• Removing revenue roadblocks in all processes, policies, and handoffs is the primary value of CXM.

• In-sync = alignment = CX insights were the basis and guardrail for performance, for strategy, or for a new product or service or market entry, or for a partnership, business model, or cost saving.

• CXM value can be tracked in dollars (or euros, etc.) by a wide variety of contributions to revenue, savings, and organizational advantages.

Sales revenue 

= purchases = price of products and services x volume sold.

Success revenue 

= purchases from customers who would have churned without the Customer Success team’s efforts.

(usually reported as recurring revenue, earned growth rate, etc. as a sign of future growth for a larger company acquiring your brand)

Support revenue 

= [purchases from customers who would have churned without Support’s efforts]

PLUS [purchases from other customers who would have chosen a different supplier due to negative word-of-mouth from your existing customers if Support had not helped them].

(usually reported as up-sell and cross-sell during Support conversations, but this may in fact reduce trust, relationship strength, and lifetime value — use the blue equation instead, and data-mine Support comments for extreme extra CS value toward companywide alignment to customers)

CXM revenue 

= purchases from customers due to customer-aligned processes, policies, and handoffs.

(usually reported as NPS = percent of customers who might recommend your brand minus the percent of customers who might urge customers not to buy your brand — use the blue equation primarily, and use NPS to identify root causes of misalignment via key driver analysis)

This newsletter is dedicated to showing you how to maximize Customer Experience Leadership Value. (in money, not just scores)

Revenue from CX vs. CS vs. Sales

Step #1 CXM Revenue

Due to any change in process or policy in-sync with customers’ aims:
— Purchases from customers switching from your competitors.
— Expanded purchases from existing customers.

In-sync = CX insights were the basis and guardrail for a new product or service or market entry, or for a partnership, business model, strategy, performance standard, or cost saving.

Compare revenue from in-sync situation versus out-of-sync situation.

Step #2 CSM Revenue

Due to any intervention by Success or Support where the customer would have otherwise switched to your competitor:
— Expanded purchases (rebuy, upsell, cross-sell) from existing customers.
— Purchases from other customers (new and existing) who were influenced by these customers’ testimonials or who would have bought from your competitors due to these customers’ gripes.

Ask customers upon purchase what influenced their decision, or conduct a study to identify what percentage of purchases benefited from CS interventions. Apply that percentage to all revenue minus CXM revenue.

Step #3 Sales Revenue

All customer purchases and fees:
— Minus CXM revenue and CSM revenue.

Let’s try it!

Start with what you have. Use estimates. Much of your revenue is in thanks to combined effects of CXM, CSM, and Marketing and Sales.

You can download this template.
Apply it to your own situations.

Let’s re-direct managers’ attention to value increased by EVERY group. Thanks for using this approach to radically shift Customer Experience Leadership Value.

All the best,
Lynn

This is an example of the Metrics & ROI paid subscription, where you get the explainer graphic, step-by-step guide, filled-in example, and downloadable xls/doc file to apply this with your team.