The Role of Finance in Customer Experience

Too often the role of finance in customer experience is undervalued or misunderstood, but the finance team has a critical role in customer success. It’s not just limited to the buying stage of customer transactions but starts long before a customer engages.

Consider this: It costs companies six to seven times less to retain a customer than to acquire a new one, and research finds that a third of customers will stop doing business with a brand after just one bad experience. With so much on the line, customer experience calls for all-hands-on-deck. More pointedly, low customers satisfaction will affect the balance sheet as revenue diminishes and cost of sales soar.

In this blog post, I’ll look at how Finance should influence customer experience by helping to build buyer personas, tracking inventory and resource planning as related to cash flow, and building billing models that benefit both the customer and the company.

Finance and Buyer Personas to Improve Customer Experience

Buyer personas guide companies as they build marketing, sales and service strategies. Buyer personas describe the ideal customer’s background, goals and challenges, their interests and needs and their motivations among several other criteria. As a Finance leader, you should be involved in driving customer experience before a product or service is released to help the company understand which kinds of customers are most likely to succeed with each, in terms of the industry sector, customer size, where customers are located and the like. While the product or development team should develop a customer persona, it’s the role of Finance to ensure that financial obstacles to purchasing are fully understood as well as the customer’s expectation from the buying experience. As well, you should have input on pricing, average revenue per customer, the number of transactions per customer, and the number of new customers and repeat customers to support the business case. These insights are critical to drive business strategy – for example, Marketing can target the most desired and profitable personas and Sales can use the information to close deals.

Finance should also help build negative personas to identify the types of people and companies that aren’t a good fit for the business. Despite best efforts, there’s always a customer subset that is unhappy with what they’ve purchased or discontinue service shortly after purchase. There are often types of customers who aren’t profitable to service or create more disruption than they’re worth to the business. Negative personas give you the opportunity to filter out those who aren’t a good fit for your business, so you can prioritize and better focus your marketing and sales efforts.

Along with buyer and negative personas, you should provide the details around total customer acquisition cost, onboarding costs (if any, depending on what’s being sold) and support and service costs by product, market and persona, along with projected churn rates. These will help guide strategies for Sales and Marketing as well as Product Development and Customer Care.

Finance should identify areas to optimize, including implementations if applicable. Did some with similar scope and requirements take longer than others? If so, why? Did it require an implementation manager to fly out to a customer location? By monitoring when and where costs go above the norm, your team can help the organization identify trouble spots, thereby enabling the company to provide better service to customers and promote customer success.

Customer Experience and Billing

When it comes time for a customer to pay for a product or service, a frictionless process is necessary regardless of billing model. Billing issues are a major source of customer dissatisfaction and billing models can be complicated. These models might include:

• Fixed price
• Usage pricing
• Tiered pricing
• Price per thousand
• Discount tiers
• Minimum flat fees
• Included units
• Overages
• Customer specific
• Consolidated, which aggregates fixed-price, usage-based and project-based into one invoice

One-time, in-advance, in-arrears and every-invoice billing all come with their own set of customer expectations.

As with order management, Finance should have the right tools in place to streamline billing and payment processing to ensure the customer’s account is reconciled. Real-time, bidirectional synchronization between CRM, ecommerce platforms and your financials allow you to maintain templates and schedules in your financial solution while maintaining customers, contracts, changes and renewals in your CRM. Billing and payments are easily visible to salespeople all in one place. Everyone stays up to date with your customers’ financial relationship to provide a more consistent customer experience.

Flexible pricing models work for both the customer and your company. Offering an option of pricing models can grow your business, and you can eliminate manual calculations with built-in fixed price, usage based, and tiered pricing and billing by using a modern financial-management platform. With automated pricing models and billing templates that match your business, you can “set it and forget it.” You get bills out faster, decrease days sales outstanding, and free up cash to grow your business, all while improving the customer experience.

Customer Experience: Bringing it All Together

Finance plays an important role in meeting customer expectations for goods and services as a hub for sales and operations. Using a cloud-native financial-management platform, Finance can connect customer-facing systems such as CRM and ecommerce with inventory-management systems, including people resources for professional services. These automated connections bring data directly into the financial system for end-to-end processing, manipulation and analysis. A cloud-native system also has the flexibility to run certain capabilities as built-in modules instead of requiring separate specialist systems. For example, the financial-management platform can track both capable-to-promise and order-to-promise; the former to anticipate demand and match product and capacities, the latter to respond to customer order inquiries based on available products, resources and delivery due dates. These measures improve on-time and accurate delivery, which is vital for customer satisfaction.

For companies selling goods, the finance system should be the single source of truth, accessible by multiple persons, functions, departments and groups. Seamless integrations between estimating and order fulfillment reduces time and enhances customer experience. For companies selling services, Finance should provide in-depth analysis of project costing to improve quoting accuracy. Upon engagement, the financial-management platform can track project initiation, project costing, billing, time, reporting and vendor management. This gives the organization needed visibility and efficiency to drive project performance.

Most retail organizations and business-to-business suppliers have adopted e-commerce transactions, requiring significant enhancements to their line-of-business systems to capture and process orders, manage inventory, track shipments, handle returns and protect against fraud and cybercrime.

To accomplish this, you’ll need a platform with real-time business analytics and dashboards. Let’s use inventory tracking as an example, since you’ll want to ensure your company has what it needs to meet customer demand. You should be able to track transactions for receiving, transfers, fulfillment, adjustments and disposal, as well as real-time stock level lookup, overall and by warehouse. This requires seamless integrations across systems, locations and entities, all presented in the financial-management platform. While Operations could see the data in a warehouse management system, it won’t see sales projections and you won’t see the impact on revenue should stock levels fall short of customer demand. Pulling all the data together in one platform ensures all business functions have the information they need to meet customer expectations while maintaining the business’ financial health.

Common sense dictates cash flow influences how much inventory a company buys, and when. Operation leaders need to know how much working capital is available, so they can maintain inventory levels and make data-driven decisions. Likewise, you need to know what’s going on in Operations as that will affect liquidity. As well, the working capital of the entire supply chain can be just as important as an individual company since that can affect both Operations and Finance.

The benefits are compelling. With a unified and single source of truth shared across all functions in the organization, you can increase:

• Sales revenue
• Sales per customer
• On-time and accurate delivery
• Customer retention
• Net promoter score
• Profitability

With a demand-based inventory and increased asset utilization to serve the customer, you can maintain and grow the customer base. Enhanced customer communication, with real-time access to customer and product information, helps make it easier for customers to do business with your company so you can differentiate on service.

This leads to:

• Best-in-class customer satisfaction
• Enhanced brand image and perception in the market
• Higher margins and optimized asset investment
• Improved customer retention, loyalty and wallet share

If your current solution lacks the capabilities that you need or the ability to support an improved customer experience, it’s time to explore cloud-native solutions. Cloud-native financial management platforms combine customizability with 24×7 access, greater visibility, higher security and lower maintenance. Cloud-native solutions deliver the full benefits of the cloud due to their use of cloud technology, de facto standards and open APIs. They are easier to integrate, scale, and adapt, delivering you the confidence and a flexible system to meet your future needs, and the needs of your customers.