You’re in a big company in a competitive industry. You have some great ideas to improve your customer care systems and boost your team to new heights. That’s great, but of course there’s always competition for development dollars. Here are some concrete ideas to get the attention of management to fund your project.
Align your pitch with the classic “Big Three” business goals
Over my years as a Business Consultant, hundreds of execs in the private sector have told me their priorities. Like them, your company probably has three fundamental business goals:
- Increase Revenue
- Reduce Operational Expense
- Improve Customer Experience
These are the classic “Big Three” business goals. And let’s be honest, in the private sector, Improve Customer Experience is really only valued when it drives the first two goals! To make your project resonate with management, clearly align it with the “Big Three”.
Monetize the benefits
Now, your project to improve customer care in your company will “move the needle” in the right direction for each of the “Big Three” benefits, but how much? In an early funding conversation, which of the “Big Three” benefits should you try to monetize to test the funding waters with your management? My experience says go first for the Revenue, then for the Operational, last for Customer Experience. The first two benefits can be monetized fairly easily. However, monetizing the third benefit, Customer Experience, is more challenging.
Benefit 1 – Increase Revenue
Every company wants to increase top line revenue! And the good news is that in my experience building financial models for customer care projects, potential revenue gains often far exceed operational savings. Here are three steps to build your pitch for your project to increase top line revenue:
- Step 1: Identify your types of sales. For each type, what is the average sale amount, how many per month closed today? Are there One Time sales as well as Subscription sales? If you do Subscription sales, how much is a typical subscription up-sell per month, and how many months does a typical customer stay?
- Step 2: Choose a conservative increase in sales to drive your benefit. This is the magic. There is no absolute way to forecast how much more customers will buy because of your new project. So, estimate in relative terms. For example, assume your project will drive a modest sales increase of just 20% on your existing close rate, so a 10% close rate today goes to a 12% close rate with your project. It’s small, it’s conservative, you can sell it to management. Alternately, it’s sometimes useful to frame the same 20% increase as “Today, our sales team closes 10 in 100 calls. Let’s assume the sales benefit with the new project as a close rate of just 12 in 100 calls, for a new rate of 12%.”
- Step 3: Do the math. Per the table below, estimate one your One Time and Subscription revenue. One Time sales are good, but Subscription sales can be amazing. Make sure to include all types of sales and their respective values for your company. In the example below, only a 20% increase is to the existing close rate is assumed, yet delivers a total of $7 million annual benefit. Of course, your figures will vary according to your company.
|Close Rate Today
Close Rate Improved
12% (20% increase)
|(2%) * $50/sale * 1000k = $1M|
$600 = $25 over 24 months
6% (20% increase)
|(1%) * $600/sale * 1000k = $6M|
In private, many clients consider a 20% sales increase too conservative. Their projects are designed to enable a low customer effort as well as deliver customers in a good frame of mind to sales agents. They often use 20% for the calculation, but privately predict more. Close rates jump when customers can easily reach the right agent, in the right channel (voice, chat, mobile, web), at the right time (now, snooze, or schedule call back).
What is your annual “Increase Revenue” benefit?
Many projects can be justified from this benefit alone. Can yours?
Next blog I’ll continue this “Big Three” discussion with ideas for what I see as the next most valuable – yet often overlooked benefit – reducing operational expense by reducing customer churn. In the mean time, find out more about Genesys Care.
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