The business case for a feedback analytics platform

Download: Business Case for Kapiche [Template] - 1.8MB (.pptx)
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CX drives over two-thirds of customer loyalty, outperforming brand and price combined (Gartner). Adding to this, Forbes found 87% of business leaders they surveyed said CX was their primary growth engine.

If CX is a primary growth driver, then it makes sense to continuously refine your strategy. The best way to achieve this is by tapping into underutilized VoC data, extracting meaningful stories from that data and using it to support a more strategic approach to CX.

Organizations that take care of their customers perform better than the S&P 500 average (ACSI)

To fully realize the value of and future-proof your Research & Insights, though, you’ll need a dedicated customer insights platform. This guide will help you present a clear business case for exactly why your organization should enhance the CX strategy by adopting Kapiche as your dedicated insights platform.

Table of Contents

1. Why do you need a customer insights platform?

Deeply understanding VoC data

Bridge the CX technology divide

2. What is the ROI of an insights platform?

Non-financial vs. Financial benefits

Non-financial benefits of an insights platform

Financial benefits of an insights platform

3. What is the ROI of investing in Kapiche?

Non-financial ROI of Kapiche

Financial ROI of Kapiche

Formula for calculating the ROI of Kapiche

4. How to present your business case

Business Case for Kapiche [Template] - 1.8MB (.pptx)

Why do you need a customer insights platform?

There are a bunch of tools out there for understanding feedback, so what’s changed? The answer is simple.

The traditional approach to uncovering customer insights is no longer enough. It’s outdated, expensive and inefficient.

Getting CX and customer strategy right starts with bringing together all of your VoC data for a deep, contextual understanding of what customers want.

Deeply understanding VoC data

As organizations collect more and more customer data it’s important they also deeply understand it. In our experience, companies already on this journey are collecting huge volumes of customer data for their VoC program but are struggling to understand it. Analysis is ad hoc and usually only becomes a focus when an existential crisis emerges.

These are a few common scenarios:

• NPS/CSAT is down but you have no idea why

• You’re losing market share to competitors but don’t really know why

• Customer churn rates are up but you don’t understand why this is happening and what can be done to prevent it

• CX initiatives don’t resonate with customers and you’re not sure why

The only way to truly understand the ‘why’ (beyond the basics) is with the enhancement of technology.

Bridge the CX technology divide

Your organization already understands the value of listening to its VoC feedback and leveraging it to make decisions. Many organizations have a growing thirst for customer data, but don't have the capability to turn what their customers are saying into meaningful action; technology can bridge this gap.

For your business case, evaluate how strong you are across each category:

• People - Do we have all the right skills in the team? Is there a dedicated person responsible for VoC analysis?

• Process - How frequently are we reviewing customer data and using it to make decisions? How much manual work is done and how frequently are agencies/consultants engaged?

• Technology - Do we have the right analysis capabilities to speak confidently and in depth about the customer experience? Can we dig behind the score to understand behavior?

VoC programs driving positive financial ROI are strong across People, Process and Technology (source: Kapiche)

Once you’ve established there’s a strong case to close the technology gap, it’s time to address the benefits that come with the adoption of an insights platform.

What is the ROI of an insights platform?

An insights platform can deliver two different types of benefits - financial and non-financial. Use our ROI calculator tool to get the direct cost saving and financial return of Kapiche.

Non-financial  vs. Financial benefits

Some benefits are easier to measure than others. A strong business case should include a mix of both financial and non-financial benefits. The financial benefits like revenue growth, margin growth and churn rate have a quantifiable ROI, which makes it easy to report them to executives. They are also easier to compare current vs. future states when presenting your business case. In other words, what is the expected impact of adopting an Insights platform based on the results we are currently getting?

As you would have seen in the ACSI graph at the start of this playbook, companies with higher customer satisfaction outperform the S&P 500 average in stock returns. Non-financial benefits, such as increased customer satisfaction, are harder to measure, but if you can link tangible non-financial benefits to a key metric (such as NPS/CSAT) that ultimately translates into a financial benefit, you can ensure they have a place in your business case.

Improving customer satisfaction leads to higher customer retention, revenue growth and profitability, which can be measured through the rise in key metrics.

Non-financial benefits of an insights platform

Benefit #1 - Prioritize high impact CX initiatives

Ask: How are we prioritizing CX initiatives based on revenue impact?

With data volumes increasing year-on-year, it’s imperative that your insights platform reduces the amount of time it takes to discover insights in VoC data. The key way you’ll benefit here is by identifying customer issues before they become a major problem and the agility to move quickly to address them.

Expected outcome: The insights team can focus on the highest leverage projects.

Benefit #2 - Reduced dependency on manual processes

Ask: What’s the opportunity cost of manual work?

There’s always a cost associated with not taking action, even if they seem cheaper at the time. Manual processes for feedback analysis are painfully slow. Every hour an analyst spends manually coding feedback is an hour that could be put to better use actually understanding that data.

A good insights platform should eliminate the need for any manual work, liberating your analysts to focus their attention on higher leverage work that will get your organization closer to achieving financial outcomes.

The main advantage of time saving efficiencies is that extra time can be reinvested into producing higher quality reports, digging further into historical data for longitudinal analyses and servicing more requests for insights from across the organization.

Expected outcome: Analysis teams can do far more for less in a reduced amount of time.

Benefit #3 - Contextual insights from every channel

Ask: How confidently can we make the correct CX investment decisions?

Everywhere you look these days, CX leaders are dialling up their VoC collection from diverse channels. Data centralization is a key reason to invest in an insights platform. Without it, you’re only analyzing a portion of the available customer data and getting half the picture.

The key to ensuring the right CX decisions are made is getting customer data out of silos for deeper, more contextual analysis. Bringing together VoC data from multiple sources increases the likelihood of finding contextual insights you never thought to look for.

Understanding customers are unhappy is useful. It’s not as useful however, but not as useful as combining sales and survey data to understand customers spending the most are actually the largest detractors of NPS. If you fixed their main concern (sourced from support channels), you'd boost NPS 5 points and this improvement is expected to grow revenue $50 million.

As more data is collected from diverse sources, you also need a platform to reliably feed that data into, analyze it and use it to answer strategic questions from across the business. This also saves time manually switching between these different sources of VoC data and reconciling differences.

Expected outcome: Insights are answering strategic questions from across the organization and being used to drive stronger financial performance.

Financial benefits of an insights platform

Benefit #4 - Improved time & cost efficiencies

Ask: Are we maximizing efficiency with our VoC analysis?

There are numerous financial benefits gained from using a dedicated insights platform. For starters, any work that’s offshored for manual coding can now be brought back in-house.

These benefits also extend to reducing overreliance on external agencies and consultants while enhancing your in-house capabilities. Budget allocated to external agencies can be redirected to expanding your internal team who have the domain knowledge to really make a difference to insights produced. This improves the quality of outputs because your own analysts will always understand the nuance of CX issues impacting your organization more than any third-party.

Lastly, time savings directly translate into cost savings and higher quality work. Reducing time-to-insights doesn't reduce the hourly rate of your full time analyst but it does allow them to do higher leverage work with their time.

Expected outcome: Your in-house insights capability is improved and specialist insights teams can produce and democratize higher quality insights across the business.

Benefit #5 - Better CX

Ask: How do we know our current customer experience is the optimal experience for maximizing financial returns?

The depth of customer understanding provided by a good insights platform instantly delivers the recipe you need to improve your CX. It’ll dig 3 or 4 layers deeper to tell you exactly what customers like and don’t like. Your insights platform should be able to measure the impact every CX issue has on financial performance. It should do this by quantifying the impact of what customers are saying and translating that impact into a measurable KPI. This way, a non-financial benefit such as improved customer experience can be understood in a language that resonates best with executives.

Expect the following when you improve CX:

• Stronger revenue growth - Brands with superior customer experience bring in 5.7X more revenue than competitors that lag in customer experience (Retail Customer Experience)

• Higher lifetime value - Loyal customers are 5X more likely to purchase again and four times more likely to refer a friend to the company (Forbes)

• Reduced service costs - Offering a high-quality customer experience can lower the cost of serving customers by up to 33% (Deloitte)

If you increased your current revenue by 5.7X, what would that number look like? What's the financial ROI of increasing repeat purchases from your highest spending customers by a factor of five?

Expected outcome: It’s easier to identify where the customer journey needs to be improved (and prioritized). It’s then much easier to accurately forecast revenue growth and positive financial outcomes as a result of improving customer experience.

Benefit #6 - Revenue growth

Ask: Do we have a good grasp on which CX initiatives drive financial outcomes and what those exact financial outcomes are?

Your insights platform must connect what customers are saying about their experience (to revenue growth). As previously mentioned CX initiatives and financial outcomes are linked by KPIs that align with your organization’s highest level objectives.

When done properly, a reliable insights platform should be able to forecast future revenue growth by directly correlating NPS score with revenue. First you’ll have to quantify the impact each NPS point actually has on revenue (your finance team can help with this!). For example, 1 NPS point might be worth $16M to the business. In this scenario you’d expect to find an extra $97M in revenue from a +6.11 improvement in overall NPS. We wrote this guide to help you understand more about how to assign a dollar value to your NPS results.

What is the ROI of investing in Kapiche?

So far, we've been talking about the business case for insights platforms in general. What about our platform, specifically? Let's take a look:

To calculate the ROI of Kapiche at your organization, you’ll need to focus on overhead costs (what's your current monthly analysis cost?). Our recommendation would be to also consider the opportunity cost of investing in the wrong CX initiatives. In other words, if you use Kapiche to find deep, contextual insights you will improve customer experience. If you improve customer experience as much as possible, what are the benefits of that to your organization? If you're unsure what those benefits might be then review this Forbes article from Blake Morgan on the 50 stats that prove the value of customer experience.

Non-financial ROI of Kapiche

The non-financial benefits of Kapiche are:

• Prioritize high impact CX initiatives

• Reduce dependency on manual processes

• Contextual insights from every channel

These are harder to directly quantify but are tangible. As such, expect to see improvement across key performance indicators such as NPS/CSAT.

Time saving efficiencies reduce manual work

Kapiche eliminates the need for manual work by automatically tagging all the issues customers are talking about. This is done in minutes rather than weeks or months, freeing the analyst to allocate their time toward understanding the behavior drivers impacting NPS/CSAT.

By leveraging AI & NLP, you’ll no longer outsource the tagging and categorization part of insights analysis. See how we tackle this and why the way we do it is better here. The result is that insights teams will spend more time digging deeper to discover what’s actually behind customer behavior.

A Kapiche customer on G2 said this about the platform:

“Users can quickly and impartially understand key concepts and themes residing within large open-ended data sets with time saved better utilised performing analysis of key themes and sharing insights with stakeholders.”

Since onboarding Kapiche, retail brand Temple & Webster has also improved their time to insights and decisions. As CXO Adam McWinney explains,

“Kapiche is an important part of our VoC program - it's an essential tool for discovering insights at scale. It’s great for tracking themes and sentiment, and importantly, highlighting emergent themes we may not see in sampled data. With Kapiche we spend much less time on generating insights and much more time on taking action.”

Unlock new growth opportunities with improved CX

It goes without saying that missed sales and growth opportunities and unhappy customers hurt revenue and profitability. An insights platform like Kapiche allows executives to ensure their organization remains competitive by identifying new sales and growth opportunities along with ensuring their customers' expectations are being exceeded. Kapiche supports this with a deeper understanding of all your customer data.

Strategic use of customer data pays dividends. According to McKinsey, “organizations that leverage customer behavioral insights for CX improvement outperform peers by 85 percent in sales growth and more than 25 percent in gross margin.” They also acknowledged organizations only leverage a fraction of their available VoC data.

According to Deloitte, customer-centric businesses are 60% more profitable than their product-focused counterparts. When we think of some well known customer-centric companies, the brands that come to mind are Lego, Emirates, Zappos, Nordstrom and Southwest Airlines. What separates these brands from others is their commitment to innovation and growth and ensuring the customer is front of mind for all employees.

Kapiche empowers your analysts to spend their precious time doing meaningful, customer focused work. Analysts' time is worth the investment when the work they are doing is so impactful (Read: not manually coding and hand reading hundreds and thousands of customer comments!). At the end of the day their work leads to better CX decisions, real world experiences and tangible financial outcomes for your organization.

Stay ahead of competitors with data centralization

Data centralization brings together all corners of your VoC program to deliver deeper, contextual insights. This brings with it the ability to know exactly where to invest and prioritize CX dollars to deliver exceptional customer experiences.

Kapiche allows you to combine multiple data sources and analyze thousands of customer feedback responses in minutes. Data is being pulled automatically across collection channels.

Here's a small sample of how diverse VoC channels have become:

• Data warehouses -  Snowflake, S3, BigQuery.

• Surveys -  BazzarVoice, InMoment, Qualtrics, SurveyMonkey

• Support - Zendesk, Intercom, SFDC

• Social media - Twitter, Facebook, Instagram

• Public reviews - Google, Apple, G2

• eCommerce - Shopify, BigCommerce

• CRMs - Salesforce, Hubspot, Marketo

When you combine these channels you’ll be left with a complete picture of your customers’ experience with your brand. This enables your analysts to put their detective hats on and figure out the real underlying drivers of poor NPS/CSAT.

Financial ROI of Kapiche

The financial benefits of Kapiche are:

• Improved time & cost efficiencies

• Better CX

• Revenue growth

These benefits are easier to quantify by their nature but still must be tangible. For the purpose of your business case presentation, emphasize these benefits ahead of non-financial gains.

Cost savings

Organizations which have adopted Kapiche as their dedicated insights platform are experiencing numerous cost saving benefits:

1. They’re directly converting time savings into cost savings by minimizing manual work.

2. Analysts are producing deeper insights by looking at the impact each CX issue is having on key metrics. This leads to better CX-driven revenue outcomes off the back of the same salary overheads that were previously tasked with low-value survey categorization and hand reading comments.

3. They’re no longer offshoring surveys for manual coding but instead bringing this work in-house.

4. By increasing their in-house analytical capabilities they’ve reduced their expenditure and dependency on third-party agencies/consultants. In doing so they’ve been able to positively expand headcount. These analysts better understand the nuance of CX issues uniquely impacting their business - enabling further refinement of CX strategy as new insights are discovered.

Case Study: How Village Roadshow refines CX strategy to get financial outcomes

Village Roadshow (VRTP) is a leading company in the Entertainment industry. Facing a proliferation of guest feedback, VRTP realized they required a new approach to customer insights to stay ahead of their guest experience and to continue exceeding guest expectations. Village Roadshow is an organization with a high VoC insights maturity that has assigned a dollar value to each NPS point. In order to develop a well informed, insights-driven CX strategy, they had to leverage their extensive VoC data and use everything at their disposal.

Guest feedback was everywhere with 40,000+ NPS responses requiring attention each year. That’s over 3,300+ responses per month that needed to be manually read, categorized and shared by a single analyst. Manual analysis wasn’t scalable and given their guest feedback was growing exponentially alongside visitor numbers and growth, it was slowing down their ability to refine CX strategy.

Their analyst Robert Young told us, “Kapiche strengthens the company’s ability to prioritize the highest impact actions based on the ability to identify and quantify the relative benefits.”

The main benefit has come from the speed and agility they are able to pivot and adapt CX strategy. This has happened in days rather than months. Read the full case study here.

How does Kapiche grow revenue?

Kapiche is delivering real world outcomes for customers that want to improve their financial performance. Revenue (and the opportunity for revenue growth) can be measured by assigning a dollar value to each NPS point. By understanding with Kapiche the impact your CX issues are having on key metrics, it becomes very clear the impact each CX issue has on revenue. This allows you to prioritize CX issues and initiatives by their impact on revenue growth.

Here are some results Kapiche customers have experienced after adopting Kapiche as their dedicated insights platform:

• Village Roadshow uses Kapiche to understand guest feedback to test, validate and quantify the $ value and benefit of their strategic business decisions.

• One of Australia’s largest private health insurance providers understands what 1 point of NPS is worth to the organization as a dollar value, and is looking to improve NPS by 10 points with Kapiche. The resulting impact will be to realize significant additional profits.

• A large provider of insurance, finance and travel services is in year 1 of a 5 year CX transformation to become a customer-centric organization. Using Qualtrics, the team gathers feedback from touchpoint NPS, ad-hoc surveys, brand tracking and employee engagement. Prior to implementing Kapiche, most of this qualitative data was going unutilized due to the level of effort to read and manually code it. In their first month of using Kapiche, they were able to pinpoint a significant drop in NPS for a particular business unit, make the required changes to turn these issues around and drive revenue growth.

• Proving you can actually improve upon perfection, a world-leading retail organization fanatical about CX (can you guess who?) wants to “improve” their NPS beyond 93 by understanding why people are calling support. Prior to implementing Kapiche as their dedicated insights platform, they had no way of quantifying this and the impact on financial outcomes.

Kapiche helps connect the dots between what customers say they want, the actions organizations take to address these demands and eventual “hard” ROI outcomes that resulted from these actions being taken.

Formula for calculating the ROI of Kapiche

The main reason you need to adopt Kapiche as your dedicated insights platform is to drastically reduce the time it takes to complete customer feedback analysis and translate those time savings into cost savings and positive financial outcomes. Your hurdles might be the CEO or CFO (or maybe it’s Karen in Procurement!) so speaking their language is key to a successful business case. To create your rock solid presentation you’ll need to emphasize the financial benefits.

ROI calculation template

These are the numbers you should source to complete this next stage:

1. Calculate your current monthly cost (without Kapiche)

• Number of Insights & Research analysts

• Their combined av. hourly rate

2. Calculate your expected monthly cost (with Kapiche)

• Number of Insights & Research analysts

• Their combined av. hourly rate

• You'll also need to factor in the ongoing monthly cost of your Kapiche license (for two users this is approx. $3,000 p/month)

The calculation is as follows:

This will give you the estimated ROI based on our experience of the time saving benefits customers get when adopting Kapiche. Please note: This calculation assumes 20 hrs per per analyst as standard. If this differs for your organization please adjust this number accordingly in both the current monthly cost and the new monthly cost calculations.

Example: Real world calculation

Estimates are never 100% accurate but they’re necessary to deliver a convincing business case. Let’s examine how it would look in practice.

Lenny is writing a business case to present to her CEO on why her department needs Kapiche as their dedicated insights platform. These are the numbers he’s finalized: