Customer Experience Schematic

The Customer Schematic

CxC Matrix DIY* (Do It Yourself)

You should be able to complete your own customer, department, and systems Matrix with the complete set of customer stages and channel categories in a short time, measured in hours rather than days and weeks. With a top level Matrix filled in, selected areas can be completed with greater detail based on your company’s objectives.

*Caution: Use only enough detail to achieve an objective.

The Matrix diagram depicts your business’s current customer infra- structure, along with the people, systems, and departments responsible for customer-facing operations, as well as all non-customer-facing operations responsible for designing, building, delivering, pricing, promoting, and sup- porting your company’s products and services.

Five quick steps to building your company’s CxC Matrix

Visualize: Inventory all customer contact points and respective systems.

Analyze: Count customers and observe customer flow.

Monetize: Assign dollar value to each customer.

Prioritize: Target focus areas based on strategic value, monetized opportuni- ties, and risks.

Optimize: Set and monitor goals per contact point; allocate investments to best performing tactics and treatments; continuously improve process-based performance,

CxC Matrix development tips

You need to establish your own channel categories and stages in the con- sumer cycle. Modify the templates provided in this book to use terms familiar to your industry and, specifically, to your company (template downloads are available at www.CustomerWorthy.com).

Channel categories are most important for strategy, market assess- ment, and planning, while individual contact channel assignment is critical for financial analysis and contact design. As you insert more detail beneath the channel category level, the Matrix becomes more valuable as a tool for specific functions, activities, and tactics. Details relating to systems and functionality help business units and infor- mation technology departments engage in a dialog about needs, requirements, and technical specifications. Details regarding media, containers, slots, and messages provide a platform for describing and managing the dialog in each customer contact. Activity costs and projected revenue details are important for finance planning and department managers. Later chapters will provide more information for each department or function.

What is most important is that each channel and contact be listed only once in the Matrix to maintain the mutual exclusivity of the channel and stage cells.

Step 1. Visualize—

Inventory All Customer Contact Points and Respective Systems

When introducing the preliminary Matrix concepts, it is best to start with broad categories of customer contact channels using familiar terms that your employees recognize such as inbound phone, outbound phone, cus- tomer support, infield sales, office locations, partner resellers, direct mail, geographies (i.e., markets, territories, regions).


It is also best to start with the most familiar and obvious channels grouped by categories and then insert major missing channel categories.

For example, your company may not use resellers or partners to distribute your product, but you should list third parties as a channel category because your customers are likely to try to fulfill their needs in all channels. A large number of customers may search for your products and services in chan- nels that your company is not using or where you are under-represented and under-invested.

It is important to address Matrix stages discreetly by interaction channel, as customers have different expectations based on channel.

However, it isn’t necessary to complete the entire grid. You may not take orders online, or you may provide a service that you do not believe can be categorized as “accepted” or “delivered.” These types of adjustments are not required at this level of analysis.

Quick Picture: For a strategic review and to quickly kick off the “Think Like a Customer” discussion:

Figure 8.1 CxC Matrix

Step 2. Analyze—

Count Customers and Observe Customer Flow

Put your customers in the Matrix, and examine customer flow and bottlenecks. Identify how many unique customers exist at each contact point or cell for a specific unit of time. These numbers do not have to be precise. Best guesses work fine in order to expedite the next level of findings.

Establish a timeframe for collecting customer count data, as different systems and business types have varying data capture and access capabili- ties. It is best to start with annual customer counts per contact and stage since annual counts should be the easiest and fastest to collect. Where available, monthly counts should be a near-term goal as month-to-month data reflects customer flow performance.

Get the Easiest Data Using the Quickest Means

Managers should not get bogged down at this stage with an exact number of customers, nor should they be concerned with anonymous versus identified customers just yet. Anonymous customers are those with contacts that do not require identification or recognition, such as a website visit, a call into a call center, or a visit to a store. Estimates for total number of customers per contact channel and stage should be completed as quickly as possible.

Each channel is supported by a corresponding system. For example, boxes filled in the warehouse should be classified as “8. Delivery” stage under the “one-on-one” channel. Fill in the number of customers who were sent shipments on a monthly basis. Here are some examples of quick counts by channel, by stage: How many website visits, incoming service calls, partner sales calls, web mentions, newspaper mentions, returned items, in-field sales calls?

This simple analysis exposes strategic questions regarding the use of entire channels such as Internet, third parties, or direct sales, while typically uncovering bottlenecks in customer demand processes and customer service capabilities or resources.

Analyze Deliverables

• Metrics, performance benchmarks

• Return on investment (ROI) scenario framework and components

• “What if” system and process design scenario framework

• CxC Matrix goal setting and coaching framework

• Strategic SWAT (Strength, Weakness, Actions, Tactics) analysis framework

• Preliminary integration or overlay with other management perfor- mance frameworks, metrics, and methods

Other Matrix Contact Point Analysis Areas

    1. Define nature of the intra-process links.
    2. Audit each contact’s function and capabilities. Develop an under- standing of the capacities and time lags associated with each busi- ness process.
    3. Sample Questions and Observations:
  • Look at the total numbers at the bottom of each column. Columns 1-8 depict the conversion rate from life stage to life stage which, when combined with monetization, can be used to quantify the value of any resource investment.
  • For each high potential channel, look further at the channel details, and discuss opportunities and risks associated with making changes by channel, by consumer cycle.
    • This Matrix should provide a quick quantifiable view of multi- channel customer behavior. While this is a macro view of performance across stages, management should discuss the interrelationship of web to location customers, third party to web to location customers, etc., and the existing contact net- work’s fitness and ability to meet customer needs. Do the cur- rent structures and resources meet evolving customer needs?

Highlight the experience stages by channel that are most critical to your business success over the next 6-12 months.

95%: The percentage of retail companies that think it’s valuable to use data to project customer lifetime value.

35%: The percentage that actually do it.

—Retail Systems Research, Benchmark Study, July 2007

Step 3. Monetize—

Assign Dollar Value to Each Customer

Insert estimated annual revenue per customer. Multiply the value per cus- tomer times the number of customers in each cell. Summarize the stage numbers in each column.

Note on Double-Counting: At this point, the raw numbers summed in each column represent double and triple-counted customers, as most companies cannot discreetly track individual customers from channel to channel, contact to contact, and stage to stage in the consumer cycle. While getting to the point that individuals are distinguishable in each cell is an excellent long-term goal, precision down to the customer level is not necessary now.

Lifetime Value or Annual Revenue per Customer

How much is each customer worth over his entire relationship? If you do not have a lifetime value figure, or lifetime value is considered unreliable, use annual revenue per customer to assess the potential value of each cell. For most companies, it is worthwhile to use annual revenue per customer or per product line to illustrate and visualize value pockets. Another monetization alternative is to create a separate Matrix using each department’s customer value number and for your entire company to come to an agreement on which number fits best.


Managers can now quickly rank the areas that represent the greatest opportunity for revenue enhancement and cost reduction by placing monetary values at each channel, customer stage, and contact. Simply put: “How many customers will be affected with what revenue gain or cost reduction?”

If your company is a multi-line business that markets to a diverse cus- tomer population across countries and markets, you may want to complete CxC Matrices for each logical division of your business.

Figure 8.2 CxC Matrix

Step 4. Prioritize—

Target Areas Based on Their Strategic Value, Monetized Opportunities, and Risks

Target the Matrix contact points that have the greatest strategic and monetary importance. Use the Matrix to connect contact points and activities to specific corporate objectives. Then, complete the Matrix to include goals, actions, owners, and systems to ensure execution excellence.

Prioritize areas with the greatest benefit:

• Most vulnerable—cost leakage, competitive threats, market mis- alignment

• Opportunistic—high growth, quick, simple changes required

• Competitive threat assessment—channel coverage, service configurations, service quality, sophistication, perceived preferential value margin assessment

• Enormous opportunity—land grab, strategic opportunity design, test market simulations, new market entry, merger, acquisition, expansion, and consolidation scenarios

• The Hot Spot Method—CxC Matrix hot spots: biggest gains and biggest costs cells direct focus to areas for immediate perfor- mance lifts

Focus on one area at a time, and complete the Matrix details for each target contact point. Realize that contacts are related via customer path and internally shared systems and processes, which may require bridging resources and joint department planning.


Step 5. Optimize—

Set and Monitor Goals per Contact Point

At this point, the Matrix provides a static view of a company’s business, depicting how many customers contact the company, its brand, its products, partners, and messages across each channel and at each stage on a periodic basismonthly or annually.

You should be able to get to this step and have a CxC Matrix view of your business in 1 to 12 weeks.

You derive tremendous value and uncover “quick wins” (high return on investment with a short payback window and little to no capital expenditures or out-of-pocket costs) just from the discussions, departmental exchanges and discoveries that take place while building this static, point-in-time customer view.

However, you should not lose sight of the ultimate goal of building a customer worthy mindset among managers. The CxC Matrix provides a system of sensors across your entire customer contact network to help you immediately and knowledgeably execute every customer contact optimally.

Flow: The Challenge

Customer flow to revenue stages (Stages 1–6) and through cost stages (7–15) is the single metric that every manager should monitor. Answer these simple questions:

• At what rate are new customers appearing?

• At what rate are customers buying?

• At what rate are customers repeat buying?

• At what rate do customers require service and care?

These simple questions require managers to track the length of time customers spend at each stage and specific customer movement from stage to stage and channel to channel. Again, not all channels and stages need to be completely transparent and accessible on day one, but those channels and contact areas deemed critical in the earlier stages should be closely monitored as soon as possible.

In summary, set performance goals by department and contact owner that are visible across the company. Use existing measurement and reporting systems to report on customer performance by channel and stage, making every effort to integrate with current performance measures.

CxC Matrix Reporting—Alerts and Alarms

Your reporting should be set up to alert management to anomalies. For example:

• A spike in customers requesting information.

• A drop-off in website customers buying (moving from Stage 5 to Stage 6).

• An increase in time for all customers moving from Stage 2 to Stage 6.

Each of these, detected by alarms set off by changes in benchmark perfor- mance, are indications of business risk or opportunity. These changes may be due to obvious activities, such as a new advertising program or a mention of a product on a national news broadcast. Or they may be due to less obvious activities or market events like a competitor’s new product launch or price change, bad weather during a peak sale weekend, or inventory outages at a primary distribution point. Transparency to changes in customer flow pro- vides early warnings to downstream managers, finance, executive manage- ment, and shareholders. This is important because changes in customer flow directly affect revenue, costs, and income.

Continuously encourage employees to innovate and contribute customer growth and cost containment suggestions. Establish recognition and reward systems based on customer performance for every department tied to and directly traceable to customer performance observable in the CxC Matrix.