In Blog 02 I made the case for creating “cause and effect” causal models (aka key driver models) that provide a sound framework on which to prioritize customer experience (CX) and other business investments that will have the largest impact on your business like increasing customer loyalty and sales while decreasing operational costs. Then in Blog 03 I described in more detail what a key driver model is and why you should care about them.

In this blog I lay-out the “paint by numbers” steps to creating and leveraging key driver models in your organization. By following this roadmap, you and your stakeholders will be able to make strategically relevant and actionable decisions confidently that will improve your customers’ experiences with your brand and propel your organization to higher levels of performance.

The 9 Steps

So, you are convinced of the power and value of creating and using key driver models within your organization – now what? What steps are involved? How big a project is it? How do I even get started? Although the undertaking is not trivial, doing this is not as daunting as it may first appear. There are 9 main steps to creating, leveraging and understanding the impact that CX or other initiatives will have on your organization’s performance (see figure 1).

Figure 1: The 9 Steps to Creating and Leveraging Your Key Driver Model

The first 6 steps involve creating your initial model. That is usually the hardest part – getting started. After that, the next 3 steps are about making and implementing (CX) investment decisions and assessing the impact of acting. Finally, the process can start over again as you desire to make the next round of investment decisions, as your organization and your customers change over time and / or the focus of business performance metrics evolve. Updating the model becomes progressively easier and faster as your stakeholders see the value of the approach and increasingly rely on it to objectively inform decision-making for CX and other organizational initiatives.

Getting Started

Given that getting started can be the hardest part, there are several ways to ease the potential investment and timeline as you begin your journey and build momentum in identifying the key drivers of your organization’s success. One way is to focus on identifying key drivers of stand-ins or “proxies” for business outcomes. For example, if your organization already has a CX measurement program (ad hoc or ongoing) you likely have some history of customer ratings regarding their experiences including an overall “customer satisfaction” evaluation like overall satisfaction with the customer experience, willingness to recommend or likelihood to buy more from your company in the future.

An initial step can be using existing customer experience data to identify the key drivers of your current overall customer satisfaction metric whatever it may be. Early wins demonstrating key drivers of customer satisfaction can set-up the conversation with company executives around a more comprehensive approach that includes linking existing or enhanced customer experience measures with one or more objective measures of business performance such as customer loyalty, sales volume or customer service costs.

Creating the Key Driver Model

Here are brief descriptions of the first 6 steps in the overall process of creating your key driver model. Depending on a variety of factors these beginning steps typically take 1 to 3 months.

1. Goals and Objectives – First, you need to identify a main goal and related problem(s) your organization has on which to focus your model building efforts. Is there a sales or revenue problem? Is there a customer loyalty issue? What main problem is your organization trying to solve that a model may be focused on? This is a crucial first step that allows you and your stakeholders to define success by identifying the organizational metrics you are attempting to impact with your project. Linking your project to organizational goals and objectives is essential for success.
2. Blueprint – After establishing relevant goals and objectives, it is important to create a comprehensive and complete picture (i.e., blueprint) of what and how organizational stakeholders believe key drivers potentially influence their future success as defined in the previous step. One of the best ways to articulate this overall blueprint is to draw a picture of the potential key drivers identified during this process, including the hypothesized causal relationships suggested by other research and knowledgeable organizational stakeholders (see Blog 03 for a simplified example of what a blueprint might look like).
3. Data Design – After building out the blueprint it is time to create the data design. Essentially the data design starts by articulating the existing or ideal way that each of the blueprint components (i.e., potential key driver, business metric and external business condition like competitor intelligence) should be measured to be most accurate and helpful in creating the real data-driven key driver model of business performance.
4. Data Inventory – While the data design is aspirational, the data inventory is the reality check on what data within the design can be obtained (1) from within your organization, (2) through voice of the customer (VoC), mystery shopping, market and other types of applied research, and (3) through 3rd party sources. From this inventory you will decide which data you plan to acquire and how.
5. Data Acquisition – Using the data acquisition plan as a guide, you will then obtain the data that feeds the model development work. Adjustments to the original data design may be needed as you encounter the realities of data access and quality challenges. Forming a good relationship with and working closely with the data and technology professionals responsible for acquiring all the data usually helps speed along the process.
6. Analytics and Insights – And finally, you will develop the key driver model from data acquired using the project goals, objectives and blueprint noted above as your guide. In this way you will explore and understand what your own data are telling you regarding which CX and other key drivers most need your attention and investments for improvement.

Leveraging the Key Driver Model

Now that you have created an insightful and useful key driver model, you need to make key decisions, take action, assess the impact of those actions, and determine where to go next. Depending on the size and complexity of your organization and the nature of the initiatives launched, these steps can take a few months to a year or so. Here are brief descriptions of these critical “benefits realization” steps.

7. Action Planning – As mentioned in previous AIM blogs there are a variety of ways to use the model you developed to determine which key drivers have the highest total impact (i.e., all direct as well as indirect effects) on your chosen business metrics. In this step you will likely run several “what if” scenarios using the model to help decide which actions and investments will optimize your desired outcomes.
8. Take Action – After organizational leaders have funded an evidence-based CX or other improvement program and a comprehensive and detailed operational and change management project plan has been created, the hard work of implementing the plan begins. During project implementation is a good time to keep tabs on the measures of how effectively the plan is being executed over time. These measures are a leading indicator of the degree to which full benefits realization will be achieved.
9. Assess Impact – Impact assessment focuses on understanding the degree to which the potential benefits of actions taken were realized. A full impact assessment allows you to understand how well this cycle worked and how a future cycle of model revisions may address any short-comings of the initial model, and to sharpen the focus on updated objectives for another round of model creation and use.

This was just an overview. In future blogs I will describe these steps in more detail so you will have a clearer understanding of what each step of the journey will look like within your own organization.

As usual, I would love to hear your thoughts on this and other topics of interest.  You can comment on this post, or you can reach me via email at randy@analyticsandinsightsmatter.com, on LinkedIn at https://www.linkedin.com/in/randylaw/, or at www.analyticsandinsightsmatter.com.

- Randy