ROI is a simple and straightforward metric for determining the effectiveness of an investment. This widely used calculation enables organisations to compare investment options on an apples-to-apples basis. However, how do businesses calculate the return on investment in cybersecurity, given that the benefits are not monetary but the money saved by avoiding intrusions? Or, how does a business determine the value of exceeding customer expectations?
In a roundtable hosted by Future Processing, industry figures including Rowan Jackson, Co-Founder and Chairman at Promising Outcomes, Eric Moe, Chief Operating Officer of Whitefoord LLP, and Daria Poloczyk, Head of Analysis & Design at Future Processing discussed these questions and the impact that security and customer expectations have on measuring ROI.
Cybersecurity: the Investment, Data and Revenue
Many security officers still have to justify every extra thousand spent on cybersecurity to their bosses. Because cybersecurity is about risk management and loss prevention, not just profits, any investment in security must demonstrate to the business that it is focused on defending what is most important to the organisation. How threat actors target these key assets can strongly indicate where a company should invest the most and where a company’s reputation is also at stake.
Humans are responsible for the vast majority of data breaches through indifference, malicious behaviour, deception, or a lack of understanding. Insider threats, poor corporate policies, careless employees, and poor accountability are real-world factors that extend far beyond security infrastructure and technology. Organisations that understand the interplay of people, processes, and technology will achieve the highest return on investment, allowing them to allocate the necessary budgets, resources, and commitments to implement sound cybersecurity controls while avoiding strict government and industry penalties.
One of the most powerful features of data is its ability to help organisations better understand and adapt to changing customer behaviours. However, data breaches have become an everyday occurrence for many businesses, with customers feeling the effects of identity theft and other fraudulent activities. Customer information is required for business operations, but companies that take customer data security seriously can build trust between themselves and their customers. To protect customer data, organisations must maintain compliance and invest in security-enhancing technologies that benefit their operations and customer relationships.
Consumers benefit greatly from technological advancement. Customers can use online platforms to research products, ask sales questions, and purchase products regardless of where they are or what they are doing. As technology advances, costs reduce and products improve. As more vendors offer comparable solutions, supply grows, democratising access to these solutions, and driving down the price.
Quantifying CX
Many brands are investing heavily in customer experience (CX), and those investments can pay off handsomely. Although traditional ROI measurements can be used to quantify large investments in customer experience, measuring the true impact of CX resource allocation requires a new paradigm: return on experience.
Customer service excellence is in high demand, particularly among the millennial generation. With more competitors in each industry, businesses must focus on how to keep their customers happy. Everyone is more engaged in technology than ever before; every consumer has a smartphone or access to online services. The marketplace is online, and businesses are shifting to omni-channel sales channels to sell their goods and services.
The key to gaining executive support for customer experience investment is to demonstrate how it benefits the bottom line. Tying customer-focused initiatives to money and statistics tell a more compelling story than anecdotal evidence. The key is to use data to demonstrate the ROI of CX and tell a compelling narrative. CEOs’ primary concerns are revenue growth, profit growth, and stock price. Any programme that does not contribute to these three areas will be ignored, especially during this period of economic uncertainty.
CX leaders must be able to link customer-focused initiatives to financial growth to maintain funding and gain future support for new programmes. Focusing on the right metrics and properly analysing data to make effective decisions is the key to demonstrating ROI. Organisations must focus on data, target the right customers and put customers first in everything they do to drive metrics and showcase the strong ROI of customer experience.
If It Can Be Measured It Can Be Improved
While soft ROI may be harder to measure, it can deliver an unforgettable customer experience, while at the same time safeguarding an organisation and its clients. The power of advocacy is derived from the acts of individuals. Thus, at a micro level, brand ambassadors, customer loyalty and referrals are the return on investment. Investing in cybersecurity and the user experience reduces customer churn rate, lowers the cost of future branding, and increases revenue, all while protecting businesses from possible cyber threats.
