January 28, 202114 min read
One of the best ways to align on digital transformation, is to show real, strategic ROI for the organization. That’s what the aptly-named ROI model is all about. We’ll look at how to grow revenue, reduce cost, and decrease risk as you navigate toward digital transformation.
Here we are. The CXM Experience. And I am your host, Grad Conn, CXO, chief experience officer at Sprinklr. And we are continuing our series on the Digital Customer-First Transformation System. We just covered the maturity model, one of my favorite parts of it. And I think it’s my favorite part of this because the whole point of digital transformation is to try to take an organization into the future.
Now, it’s kind of funny because I started at Microsoft in 2006. And I was in Microsoft Research. So, in MSR it was pretty advanced, right? Like we were on tablet computers, if you remember those. We we’re fully digital. And it was great. And I loved it. I had been in that kind of modality for a long time, because I’d been in some pretty interesting startups. I was in the peer-to-peer space. And so, it’s very natural for me flowing into the MSR culture. The only thing that was unnatural, and I don’t say this very often. But when Microsoft hired me, they hired me, partly because I was an open source person. So, I’d come from the open source world. And truth be told, the first day that I used a PC, or a Windows machine, was my first day at Microsoft. I was like Mac and mostly Linux only. And I had been with some folks like Cory Doctorow and John Hanson, who are fanatical Linux users. I once showed Cory a PC, this was just a few years ago, Cory and I were hanging out, I think we’re at the Disney campus. He was working a little bit with the Disney folks. And I showed him my new surface PC. And he literally wouldn’t touch it. He was like, that poison won’t touch my fingertips. So, it’s pretty funny.
Anyway, so my first day they gave me a Windows machine. And I had obviously heard about Windows, but I’d never used it. It’s pretty similar, incredibly similar, actually, in many ways to Mac and Linux. But there’s differences, right? And because we were in MSR we were on the latest OS. And the OS that was just launched in 2006 was Vista, if you remember Vista. And Vista was an interesting OS, because they had been on XP for quite a long time. And they were working on a new OS that was internet based. And it ended up kind of not working. At the time, broadband wasn’t fast enough, wasn’t scaled enough. And that particular OS ended up as a smoking ruin on the ground.
And so they very quickly had to build a new OS. Because, at the time, new OSs were an engine of revenue growth for the company. It had been five years since there had been a new OS. So, Vista came out, but very hurried. It was much maligned. People still make jokes about Vista. What was kind of funny is that Windows 8 and Windows 10… there’s no 9. Do you know what happened to 9? How does it work? 9 ate 10. I think that’s how it works. No… 10 ate 9. So, all the new OSs that exist at Microsoft are all based on Vista. This is still, essentially, the operating system we’re using in PCs right now. It’s just they’ve had several modalities of maturity since then.
So anyway, I’m sitting down with this new Vista machine. And I don’t know how to do a bunch of stuff. There’s a bunch of stuff I don’t know how to do. And I foolishly said to someone, hey, if you want to blankety-blank, how do you do that in Vista? And they gave me a weird look, right? And they’re like, same way you do it in XP. Ahh, cool. Excellent, excellent. Alright. And so I went on the web and found out how to do it in XP as well. And then off I went. And, you know, I’m a pretty good PC user. Actually, I love PCs Now. Now I’m a PC fanatic. So, it’s funny how things change.
Anyway. So, let’s get back to the topic. So today we’re going to talk a little bit about… we talked about the maturity model. Today we’re going to talk a little bit about where we’re going from an ROI standpoint. The whole point of DCFTS is, how do you get alignment? And how do you get everyone in the organization on the same page. So that’s where we’re gonna go with this today.
One of the great ways to get people on the same page with any kind of initiative, is to talk to them about ROI. And ROI is a great way for people to understand what they’re doing, why they’re investing time and energy, and why they want to do it, etc. There are three ROI categories that we focus on: revenue, cost, and risk. And classically, every company wants to grow revenue, wants to reduce costs, and wants to decrease risk. It’s not that super surprising, but we call these primary business objectives. So increase revenue, reduce cost, decrease risk.
The ROI model, what we have in the DCFTS are some examples of how you can do those things. And if you get very granular — and this is actually on the Sprinklr website — you can look at each individual product, there are five products in the Sprinklr family, and see a variety of use cases that help you achieve these different primary business objectives by product. So, it’s pretty compelling. I’d recommend you take a look at it.
Let me give you some examples from DCFTS, so you understand how that plays out. So, under “grow revenue.” Let’s assume that you want to activate online/offline and in-store marketing initiatives, right? So, you want to integrate social care with marketing to build, deepen, and strengthen your relationship with customers. So basically, what happens is that you’ve got better customer knowledge, more personalized responses, and you can turn detractors into promoters. What we’ve seen when companies have done this, and done it well, is they generate $2.33 for every dollar they invest in the effort. So, it’s paying out more than 200%.
Another use case would be to integrate social engagement into omni-channel strategies to get a unified view of the customer. And this is like the holy grail of everything we do in marketing. How do we get a unified view of my customer so I can talk to them in a way that they understand that I know who they are? And so, how do you look across a variety of different media? And how do you drive social engagement to multiple channels. How do you increase your content sharing, increase word of mouth, and get your overall campaign performance up by treating people like individuals? And what we’ve seen, the companies that have done that is they generate $2.21 for every dollar they invest. So more than 200% there as well.
Another great use case is to build and grow advocate communities. Had an example about Subaru last week, but advocate communities are an amazing way to take people who love your brand, and want to show how much they love it, and turn them into acolytes for your brand. There’s this kind of interesting issue around cognitive dissonance that you can lever in these advocacy communities. So, there’s this pretty interesting statistic, which is, the majority of buyers of car magazines — and can still find them on newsstands. It’s actually one of the last magazines standing. If you go look at a newsstand and look at a magazine rack, what you’ll see are these car magazines, and they’ll have multiple brands, like a lot of brands, on the cover. So, what’s going on there is they understand that the people who buy the magazines have mostly, 70 to 75% of the time, have mostly just recently purchased a car. Make sure you get that clearly. They just recently purchased a car. Not thinking about buying it — purchased it already. They go in the store, they see this magazine and it says you know, Acura Legend, or whatever. They grab the magazine, they flip to the Acura Legend article. And it’s great car. People who bought this car are smart buyers. I’m buying this magazine because this magazine shows me that I made a good decision buying the car that I bought. So, this issue of cognitive dissonance is a huge lever with individuals because it’s something they want to get rid of. So, it’s always good to keep selling after the sale to keep reinforcing to people that they made a good decision. And once that they really lock in, they will become incredible advocates for your brand, because they want to show everyone else how smart they were in making that decision. So, people that do that, and do that well, create community activation, get affinity multipliers going on. And they create an advocate network. And we’ve seen people generate more than $2 return for every dollar invested there as well.
Content, let’s talk about how content should be personalized. The great thing in these networks is you can actually personalize the content. At Microsoft, hundreds of thousands of pieces of content are personalized every year. At Sprinklr, we personalize all of our content as well. It has a massive impact. When you get an ad made just for you, you have a very different reaction to it. When you do that, and do that well, you get organic amplification because people retweet the ads you’ve sent them, and that grows across their own networks. You get organic amplification that’s very difficult to get normally. And we’ve seen returns of $4.68, nearly 500%, for every dollar invested in those kinds of initiatives.
And finally, how can you leverage social selling to nurture leads and convert them into customers. This non-targeted spray-and-pray approach doesn’t really work. With social selling you’re looking at specific targets, based on specific accounts, based on the buying committees that you’ve identified. And then you go after those people follow them and send them very specific, personalized messages. And companies that do this can generate $2.94 return, nearly 300%, for every dollar invested, which is pretty amazing.
So that’s a good example of the revenue side of the equation in terms of how you drive it. I’ll spend a minute or two here on the cost. So, on cost, one of the great things about Sprinklr is that Sprinklr can do a lot of different things. And many of these things are individual point solutions in most companies. So that was one of my favorite things at Microsoft to do, was to take point solutions that we were spending money on, and eliminate them, and have Sprinklr do it instead. By the time I left, Microsoft Sprinklr was literally free. Because we were saving so much money by all the other points solutions we’d shut down. What we’ve found is that companies that do a really focused job on eliminating point solutions and creating a single platform will save $11.80 for every dollar they invest. So that’s a massive 10X return, 10X plus return. You can also get a lot of cross-functional collaboration. And that’ll drive customer delight and functionality, as people see what’s working and not working. So being able to see what content is effective and not effective. That also reduces costs by having people not replicate content they don’t need. And we’ve seen Siemens, for example, they talk about a 50% reduction in content production costs, and a 10 times increase in the effectiveness of their content. Partly they’re not replicating content they already have and partly they’re seeing what works, and being able to use that over and over again. So very powerful in that kind of collaboration element.
You can also leverage social case management to do customer care. You can redirect, or you can have Customer Care occur on these asynchronous channels, which are way less expensive. Doing Customer Care on WhatsApp is way less expensive than doing it on the phone, because you can have multiple WhatsApp conversations going at the same time with an agent. Whereas in a call, it’s a dedicated connection. And so that’s usually about a third of the cost of what it normally costs in a traditional call center. And that’s one of our fastest growing products and massive movement there as well.
And then, you can also drive peer-to-peer social care, right? So, build communities, build portals, and build peer-to-peer social care so that people don’t even need to call you. They can get it from other people, they can get it from other advocates, they can get it from other folks who can help them solve their problems. And in that case, it costs you nothing. Because essentially, all of the effort that would go into customer care is being handled by your own customers, to other customers. And that’s a super effective methodology, usually about $5 in savings for every dollar invested there. So almost 500%.
And then finally, how do you shift your marketing spend to social? And as you do that, improve your targeting, your amplification, and your reach? Typically, as we see companies shift more and more into social spend, they’ll save about $2.54 for every dollar that they invest, because every dollar is working a lot harder, because the target is a lot more specific. And so that’s the reduced cost section.
On the risk section… you know, risk is interesting because risk is different for every company. But I’d say that the key issue for most companies is that they don’t see the risks that are coming at them. And so by having a better risk management and identification system, you can identify risks before they occur. We have one customer who said that we had helped them eliminate 237 potential PR risks in the previous year, by just being able to spot stuff in advance. It was pretty amazing, actually. You see, both at the large, medium, and small size, different types of risks that can occur. Let’s say you’re a large financial company, you can have a data breach. How do you manage that? If you’re a large national retailer, a mid-sized company, what if there’s a social media crisis? Someone says something that’s inappropriate on your channel? In a fast-growing tech company, what happens if you have a cyberattack? What happens if you’re a distributed company, and you’ve got one of your distributors saying something that’s inappropriate? How do you manage that? Being able to track, manage, and see that all at the same time is an extremely effective way of managing risk in the company.
So that is the ROI model. And again, I’d encourage you to read it, there’s much more there to read than what I’ve gone through. But I think you get the idea. And the core of it is, Hey, I can actually use this technology to drive revenue, reduce costs, and decrease risk. And that goes a little bit to the values model that we talked about at the very beginning of this series a week and a half ago, which is making sure that the investments that you’re making in digital transformation are investments that drive the bottom line, and drive success of your organization. And that’s always going to be the way to get people aligned.
And that is all for today. Thank you for listening. This is the CXM Experience, and I’m Grad Conn. And I will see you next time.
Learn more about Sprinklr’s online community software.