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CX and the CFO

By Tom Stewart posted 04-19-2021 12:00 PM

  

Data from the AchieveNEXT 2021 Sentiment Study reveal an important opportunity for CFOs and CHROs: the chance to help their companies achieve growth goals through customer experience. That thought may be counterintuitive — of all the functions in the C-Suite, Finance might seem to have one of the least direct paths to affecting customer experience. But the connection is straight, real, and important. The graphic below shows some of the highlights from the data, and of course the full study is on the AchieveNEXT website.

CX Graphic

Start with the goal: growth. When we conducted our survey in December, nearly three out of four CFOs told us they expected revenue to grow in 2021 compared to 2020. My guess is that number is even higher now, as economists forecast boom conditions: 6.4% for the United States according to the April numbers from the International Monetary Fund. And where will that growth come from? Well, M&A is back, but CFO Alliance members chiefly see revenue gains from the one-two punch of selling more to existing customers and expanding into new markets, rather than from new products and services. I.e., the growth is coming by winning new business. 

Which means giving customers a better experience than you gave them before — and better than the other guy offers. The importance of customer experience (CX) is self-evident in consumer-facing industries like retail, travel, hospitality, and health care, but a study by Walker Information, a B2B consulting group, shows that CX is as important to B2B enterprise strategy as product and price combined. And it’s not just companies that provide distribution and logistics, professional, or construction services. In manufacturing, product differentiation is an increasingly weak source of competitive advantage — among manufacturing industry executives with service oversight, 86% say CX is a key differentiator, according to Salesforce.com.  


CFOs know this, some intuitively, some explicitly. Eighty-four percent say they personally expect to be more involved in customer experience in 2021 than in the past. But while they know CX is important, CFOs know much less about how to analyze or improve it. Sixty percent say customer relationships are very important to growth, but an almost equal number, 55%, do not have ways to measure relationship strength. And just 10% say they have a formal plan to manage and grow those relationships.


Here are three projects to help finance teams advance customer experience:


  • Identify your most valuable customers. Customers can be valuable in many ways: Revenue and profitability, obviously, but also because they lead you to other customers or into new markets, or because you share an ecosystem or because they partner with you in new product development. Many companies produce only the most rudimentary analysis of customer value. (Our partner Cadilus can help with this work) I’ve spoken to several CFO Alliance members about how they have identified (and helped business partners identify) the most profitable customers and arrange offerings and priorities to give them the superior experience they deserve. 

  • Get a baseline analysis of your CX capabilities. Customer experience isn’t just giving customers whatever they want. It connects to strategy, needs to be scalable and profitable, and requires building processes, capabilities, and systems to deliver on your promises every time. It is a combination of visible experience and backstage activities. In our book Woo, Wow, and Win, Patricia O’Connell and I devised a simple 10-question quiz that produces a “customer experience report card” that can give sense of your strengths and weaknesses, and can also be used with your customers or to compare your grade with your rivals’. 

  • Fix finance’s processes to be easier for customers and customer-facing employees. Invoicing, payments, pricing — finance has lots of direct interactions with customers, many of which can be simplified or automated. Digital payments is an obvious win-win, but there are many more. Talk to sales, distribution, and customer service people — and customers themselves — to learn their pain points. Then make a list and work it. The best thing about this: By becoming easier to do business with, your team will spend less time doing scutwork, correcting mistakes, and apologizing, which will improve employees’ experience as well as customers’.

In addition to these projects, there are at least two other initiatives you can take that will improve CX — and make you a better leader, too. First, learn how to be a good cop. It often falls to the CFO to play the police officer’s role when a customer tries to negotiate a price or is late paying an invoice, or to be "Dr. No" when a customer wants to negotiate a deal. Those aren’t often happy conversations for either side, but they don’t need to be destructive of relationships that are otherwise valuable. The key is to develop empathy, the active listening skill that allows you to understand what the other party is feeling. Empathy allows you to deliver a tough message in a constructive way. 


Second, buddy up to your sales leader. My colleague Ed Wallace wrote a terrific HBR article that describes how the tension between sales (“trust me”) and the CFO (“show me”) can hurt a company and outlining ways to use their different perspectives can make each one better. 


We’d love to hear from you:


  • What steps are you taking to elevate customer experience in your company?
  • What advice would you offer your peers — and what advice would you seek from your peers?
  • How can we help you?

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