Convincing Investors To Pay For An Improved Customer Experience
by Matt, on 23 Mar 2021
We’ve all experienced sticker shock. It happens when the price we’re quoted – or literally see on the sticker – is much higher (or, interestingly, much lower) than we were expecting.
I see it when potential clients have ill-conceived notions about how much designing and implementing an effective, information-driven customer experience costs.
Some people think consultants are miraculously productive, turning out super-human amounts of project work in half the time it would take a mere mortal.
They also think that freemium software should offer enterprise-level features.
Finally – and perhaps most naïvely – they ‘forget’ that implementing processes and technology doesn’t by itself generate new business. You must still pay real money to run campaigns, nurture leads, and close deals.
Rather than analyze their surprise, though, startled prospects regularly fall back on a trusted defense – their investors.
“I’m sure larger corporations will pay that much, but how on earth do you think I’m going to convince my investors to foot that bill?”
It’s a fair question, and one that has sensible answers.
In this week’s edition of SPT, I’m going to cover a few of my favorite ways to get your investors onboard with the value of the information-driven customer experience. I’d love to hear what’s worked best for you.
Use different language
My first recommendation may seem counterintuitive. Steer the discussion away from CRM systems and marketing.
Two things immediately set off alarm bells in investors’ heads: investing in software and throwing money at marketing.
Implementing a new software platform can be a nightmare – one that can grow expensive arms and legs.
CRM implementations are synonymous with disastrous rollouts, pitiful adoption rates, and gross under-delivery against promised benefits.
Investments in marketing are notoriously difficult to evaluate.
By the time a sale closes, the prospect has had a dozen or so touch points with at least a handful of different people at the business.
Credit usually goes to the victorious salesperson, leaving marketing with nothing to show for the myriad activities that successfully identified, attracted, nurtured, and converted the lead that became the sale.
Rather than the approach of talking CRM and marketing, tell your investors two stories about customer experience.
The first is about a prospect who struggles to find the information they need to make a good decision.
They deal with ill-prepared salespeople who treat them like an entry in a nameless spreadsheet. They are asked the same question more than once and become frustrated by inefficient processes and one-size-fits-all correspondence and product options.
Against all odds, they become a customer only to find themselves dealing with a support person who apparently has no idea what they’ve just been through. They answer the same questions another time, vowing to switch to a competing solution just as soon as they can.
The second story features a prospect who enjoys a straightforward product search and evaluation experience.
They easily find answers to their questions as well as a raft of additional information that helps them explore options that they hadn’t even realized were available.
When the prospect indicates they are ready to move forward, a helpful salesperson recaps the challenge the prospect faces and patiently answers the prospect’s questions. The sale is completed efficiently, and the prospect becomes a satisfied customer.
The representatives that field her onboarding questions and offer proactive, relevant suggestions for add-on purchases evidently understand why she became a customer and what she’s trying to accomplish. She hopes her boss will allow her to increase the size of the contract when it’s time to renew.
After telling the two stories, you ask your investors which version they want to hear told about their company.
The difference, you explain, is between traditional, siloed sales, marketing, and service functions and an integrated, information-driven customer experience.
You don’t need to mention that it’s built on a properly designed and implemented CRM system. That’s the how. Keep your investors focused on the vision.
There’s marketing involved, but it’s not the centerpiece. It’s an integral part of the process.
Connect CUSTOMER EXPERIENCE with corporate strategy and objectives
To put the investment in context, explain how it connects with things about which your audience cares.
Investors are primarily focused on corporate strategy and hitting company-level targets. So, meet them there.
When you describe the objective in terms of followers, visitors, leads, and conversions, you sound like you’re describing a piece of the machinery.
Just as the investors in a widget-making company don’t necessarily care about the minutia of the manufacturing process, nor should your investors care about the inner workings of your customer experience.
Show them how those CX achievements are aligned with the business’ strategy and will help move your company toward its goals.
For example, you can use a revenue architecture model to illustrate how improving customer retention will grow repeat business from 10% to 20% of annual revenue, or how doubling the conversion rate of website visitors into sales qualified leads will give your sales team more revenue-generating opportunities than they can handle.
If the company aspires to enter a new market, launch a new product, or grow market share, explain how inbound marketing and efforts to reduce friction along the buyer’s journey will fuel those initiatives.
Rather than asking for money to do great things in your world, ask for permission to spend your investors’ money doing things that are important to them.
(Side note: any time you can illustrate with stories, you’re increasing the power of your argument. Humans, even investors, love stories. Remember to make your audience the hero of the story! Get them emotionally bought into the concept, then back up with your rational arguments, facts, and figures.)
Emphasize the imperative
A dozen or more priorities are always competing for investors’ attention and a bigger slice of the budgetary pie. It never stops. And the champions for each of those issues don’t stop finding reasons to move their particular cause higher up the priority list.
Prioritization is usually a matter of perception.
Whichever issues seem the most important to external observers or at greatest risk of escalating into a five-alarm fire get moved up the list. The rest can wait.
Unsurprisingly, investing to optimize the customer experience isn’t always a hair-on-fire issue for harangued board members.
But it should be.
B2B marketing and sales is changing. In the information age, buyers are bringing habits and expectations to work that they’ve learned in the B2C comfort of their homes.
Digitization of everything means that an increasing number of B2B purchases are made almost entirely, if not completely, online.
A recent McKinsey article reported that over 70% of B2B decision makers prefer remote human interactions or digital self-service. Fully 27% were willing to spend over $500,000 via an end-to-end digital process – and over half of those would spend more than $1 million.
B2B investors and leadership teams can be forgiven for not noticing this trend. It has been slow to develop and hasn’t yet become pervasive.
The trouble with exponential trends is that they have a nasty habit of creeping up on those who aren’t fully paying attention. For a long time, nothing much happens. Then, by the time you realize there’s a freight train coming, it has run you over.
That’s my siren call on changing the B2B marketing and sales paradigm.
Tell your investors they’d better act or be left behind. Substitute “left for dead” if you want to be more impactful.
B2B companies that fail to accept and deliver an end-to-end digital customer experience will be eaten alive by newer, more agile competitors that do.
In case you need some examples, ask your investors whether they’ve heard of Kodak or Nokia.
Use this tactic judiciously, however. Creating a sense of urgency is different from sounding the panic alarm.
Raise your investors’ awareness of the macro trend affecting B2B businesses and show that your company is not immune. Express your concern for the company’s future viability if hitherto unrecognized competitors come racing past, riding the digital-first wave.
Highlight cross-organizational benefits
One of the most impactful – and tangible – consequences of investing in an information-driven customer experience is that it brings together otherwise siloed groups.
In the traditional B2B organization, marketing is responsible for creating brand awareness, attracting prospects, and enabling the sales team with qualified leads, impressive collateral, and all manner of ‘swag’ to give away.
The sales team is the alpha dog, taking the lead on targeting and impressing prospects, and turning opportunities into deals. Their value derives in equal parts from who they know and what they know. They seal the deal, ring the bell, bank the commission check, and move on to the next sucker.
Service and support teams are often more closely associated with the operations group than business development. However, they play an integral role in delivering the customer experience by delighting customers, recognizing up-sell and cross-sell opportunities, feeding product improvement ideas back to the research and development team, and ensuring loyal customers renew recurring purchases without hesitation.
All three groups deal with the same customers, even if the specific individuals with whom they interact at a given account are different.
They all benefit from sharing information about those accounts and keeping each other informed about recent developments and the latest intel.
Working from a single system of record (the CRM that lies at the heart of every IDCX), helps them to seamlessly transition accounts and individuals as they move through the awareness and evaluation phases (marketing), to selection (sales), and application (support/service).
When each group and team member understands how their responsibilities contribute to the company hitting specific revenue targets, they can measure their own progress, ask for help when needed, support each other, and balance their efforts to achieve optimal team performance.
Service level agreements act as both glue and lubricant, binding the groups together in pursuit of common goals and ensuring each team member knows what is expected of them and what they can expect of others.
Beyond the immediate customer-facing team, analytical data derived from the centralized system of record can be delivered via dashboards configured to the interests of a specific user.
From the front lines to the board room, relevant information can be presented at different levels of granularity and across timespans ranging from real-time to annualized totals.
Charts often speak a thousand words.
Investors regularly extol the virtues of multi-disciplinary teams and uniting the company behind a shared vision. Investing to create an information-driven customer experience is a concrete step they can take to make it happen.
So, open your investors’ minds to the cross-organizational impact that this investment will have.
Promise and deliver some quick wins
It’s difficult for investors to allocate capital to something that will deliver nothing for a long time, betting on an outsized return in some far-away future.
The decision becomes much easier if the opportunity includes nearer-term gains – even if they are modest in comparison to the long-term prize.
This also gives investors a point at which to stem the bleeding if things aren’t going to plan.
“Quick wins” is an overused cliché, but it works well here. Promising and delivering some near-term benefits can go a long way toward winning your investors’ long-term support.
The tricky part is deciding what to promise and how much.
While some process efficiencies are easy to predict and deliver, anything that depends on changing customer behavior carries greater risk.
Customers are fickle. We understand their collective behavior through trends and averages because, at an individual level, they can be unpredictable.
Trying to predict what a small number of customers will do within a short period of time is like visiting the zoo to see a particular animal. They never come out and do their thing when you want them to.
Marketing specifically takes time to get right. It’s a game of experiments.
Even established businesses can’t escape this one because marketing constantly changes.
The best marketers are continuously analyzing and adapting to consumer trends that affect the messages to which they respond, the channels on which they consume content, and the type, timing, and frequency of communication that works most effectively.
Whatever near-term expectations you decide to promote, you won’t get them 100% right. Tell your investors up front that 80% is a great score in the game of quick wins and to expect the unexpected. With luck, you’ll achieve some measurable successes that you didn’t plan to compensate for the ones that you missed.
Don’t sell yourself short
This last point only applies to those of you who are tempted to downplay the importance of customer understanding, centralized data management, information-enabled marketing, selling to richly described leads, and making customers feel like the whole purchase, use, and service process is a seamless journey.
Writing that down, it’s hard to believe anyone could deem those things unimportant but it happens, especially when talking to investors.
I’ve stood in those shoes.
As a CEO, I remember regularly having to defend my marketing and sales budget as investors narrowed their eyes and gave me that marketing-isn’t-for-real-businessmen look.
Get comfortable with the facts and practice making the arguments we’ve just discussed.
Role play them with your most trusted jerk impersonator. That’s not to say any of your investors are jerks; it just makes them seem nicer if the role play was with someone being particularly unreasonable.
Finally, remember that many of the issues with which your investment is competing for investor attention are the product of fearmongering, longstanding yet unresolved issues, personal dislikes and vendettas, and even the occasional misrepresentation.
Why should an investment in superior customer experience, fueled by the imminent and exponential shift from in-person to digital buying patterns, be any less worthy than their ideas?
In fact, why shouldn’t it be worthier than most? An existential crisis is noteworthy.
Start with that premise in mind, use storytelling, and be convincing.
If investing to deliver an information-driven customer experience is being stymied by the prospect of selling the idea to your investors, take a deep breath and know that you’re not alone.
You’re also at risk of far worse consequences if, because of your procrastination, the company fails to adapt in a timely manner.
I’ve suggested the following six tactics for winning your investors’ attention and hopefully their votes:
- Use Different Language – describe the opportunity in terms of a choice between traditional, siloed sales, marketing, and service functions and an integrated, information-driven customer experience. No need to mention CRM systems or marketing.
- Connect it with Corporate Strategy and Objectives - rather than asking for money to do great things in your world, ask for permission to spend your investors’ money doing things that are important to them.
- Emphasize the Imperative - create a sense of urgency by raising your investors’ awareness of the macro trend affecting B2B businesses and expressing concern for the company’s future if competitors deliver a digital CX faster than you do.
- Highlight Cross-Organizational Benefits – explain how marketing, sales, and service/support teams are dealing with the same customers and will benefit from sharing information about those accounts and keeping each other informed about recent developments. Also mention the analytical data that will be delivered across the organization using dashboards configured to suit the interests of each user.
- Promise and Deliver Quick Wins – help your investors envision near-term gains that give them the confidence to invest as well as a waypoint at which to take stock on the journey to longer-term benefits.
- Don’t Sell Yourself Short - get comfortable with the facts and practice making your arguments. Dealing with an existential crisis is worthier than most other issues your investors have on their agenda.
What’s worked best for you when pitching CX-related investments to senior leaders, board members, or shareholders? I’d love to hear about your experience, what has or hasn’t worked, and your feedback on these tips.