A New Take on ROI: Reduce Failure Demand to Save on Business Cost

My name is Ton Luijten, Customer Success Director + Data Science Lead in APAC—and in this post I’ll help you unlock a new take on ROI—through failure demand.

When we manage client programs at Pearl-Plaza, return on investment (ROI) is always top of mind. We strongly believe this should be a top priority for any team trying to improve customer or employee experiences to show that they are positively contributing to the financial outcomes of their business. 

Most people will instinctively believe that by improving experiences we will improve retention, reduce customer churn, and lower business costs, but proving this is the hardest and most important part of proving your experience program is actually moving the needle at your organization. 

Let’s take a look at how considering failure demand can help you prove ROI.

First Up, What Is Failure Demand?

Failure demand is when an organization falls short of servicing customers on the channels they are seeking, which then causes demand for services in other channels. 

A classic example is a customer that wants to find information on a brand’s website, but they fail to find the information they need—this usually ends up with a call to the call center. 

Why Is Failure Demand Such a Fail? 

Failure demand is problematic for brands as it means the customer experience is not optimized and the customer cannot get the service where and when they want it—not to mention, there’s a cost to the organization to service this additional demand. 

By reducing failure demand, brands have an opportunity to both improve the customer experience, but also create positive financial outcomes for the organization. 

Where Do We Start When Reducing Failure Demand? 

To reduce failure demand, we first need to measure it. Ideally you would be able to use operational data for this, but there are a few problems with this method. If we revisit the earlier example—how does the organization measure that the customer visited the website before they called into the call center? If the customer mentioned this on the call, the agent could take a note of this for their file, but we know these notes are typically inconsistent and hard to analyze at scale. 

When I work with clients at Pearl-Plaza, we’ve built custom text analytics sets to analyze call center notes—all with the hopes of understanding what customers are calling about. Then, brands can identify topics that attract large call volumes and work out which ones have the potential to be moved to cheaper channels (most likely online). While this is really exciting work, it does take an investment of time and money.

Another option for monitoring failure demand is to use web intercept technology with session recording to understand which journeys across the website cause the most dissatisfaction. 

However, with this option we’re already going into the space of asking customers for their feedback and not just relying on operational data. It also doesn’t allow us to find out what customers did after the failed journey, so limits our visibility on the impact on other channels.

So, What Can We Do To Reduce Failure Demand? 

I’m proposing an alternative option that’s simpler and leverages a solution that most organizations already have in place—post interaction surveys. These four questions will give you the information you need to measure failure demand and prioritize areas for improvement. 

Here are the questions to ask in your post-interaction survey: 

Question #1: Was Your Issue Resolved?

Most CX professionals won’t be surprised by this question as post interaction surveys typically include something of this nature. It’s particularly important for measuring failure demand because you don’t want to cause repeat calls. Of course, it’s also a poor experience for the customer.

Question #2: How Many Times Have You Contacted Us to Resolve That Issue?

It’s important to ask this when measuring failure demand because we want to avoid repeat calls and try to close out issues as quickly as we can.

Question #3:  What Channels Did You Use to Resolve This Issue?

This is a multiple choice question, so customers can select all the channels they have used. This is really important as it allows us to understand which channels they used and how many they used. The latter is critical for failure demand.

Question #4: What Is Your Preferred Channel to Resolve This Issue?

The list of answer options is dependent on the selection made at the previous question. By combining this question with the previous one, you can figure out which channels the customer has actually used and which one they would have preferred to use. This insight allows you to prioritise which improvements you need to implement for the different channels and reduce failure demand, as you will be able to resolve customers’ issues via their preferred channel, which means they no longer need to use multiple channels.

Wrapping Up

Of course, these four questions are contingent on the organization understanding what the original issue is. If we don’t have that information, we should also work that question into the post-interaction survey.

By combining all this information, your brand will have the magic formula—you’ll be able to understand the current state of failure demand, identify key areas for improvement to take action, and measure progress over time.