By Nancy Sansom
In an environment of economic and geopolitical uncertainty, companies recognize now more than ever that the customer is the lifeblood of the business. Innovation and efficiencies on business processes matter very little when the customer experience (CX) is left out of the equation. CMOs like me know this all too well. In fact, we — a long with the entire executive suite — recognize that CX is a key metric the C-suite should be judged against.
In a recent study by Wakefield Research and Versapay, 1,000 C-suite executives at businesses with $100M+ in revenue were polled on the state of digitization in their accounts receivable (AR) departments, and the resulting insights may surprise you. Nearly 9 in 10 survey respondents (89 percent) agreed that “the C-suite is only as good as its customer experience.”
CX is a high bar for the C-Suite to be measured by, especially when you consider that not all C-level executives consider themselves to be customer-facing. CTOs, CIOs and CFOs come to mind.
CMOs, however, spend a great deal of energy making sense of the customers’ journey, so we can set them up for the greatest success. Arguably, that makes the CMOs insight on the customer experience, regardless of where in the journey the focus is, a uniquely important one to the business overall.
The customer journey doesn’t end after a sale is made
CMOs, while primarily focused on the beginning stages of the customer journey, deeply understand the importance of a positive CX throughout the journey, including the invoice-to-cash cycle.
In Versapay’s joint research with Wakefield, when CMOs were asked, “Which of the following can negatively impact the customer experience?” Nearly 3-in-4 (73 percent) answered invoice to cash, above customer support (67 percent) and the sales process (65 percent). Only customer implementation (77 percent) was seen as slightly more impactful in having a negative effect on CX.
Interestingly, of the C-suite, CMOs were the ones who most recognized the potential for invoice-to-cash to have a major impact on negative CX, second only to the CEO (80 percent). This implies that marketing (73 percent) is in closer alignment with the CEO on the importance of CX in accounts receivable than the CIO (65 percent) and CFO (69 percent).
CX implications of accounts receivable directly impact revenue
So, what evidence is there that CX and AR are so closely aligned?
According to Versapay’s study, 85 percent of executives say miscommunication between their AR department and their customers resulted in a customer not paying in full. Thirty-five percent attest that it has happened multiple times.
Moreover, 82 percent of executives say their company lost business due to miscommunication in the payment phase. In fact, 42 percent say that miscommunication in the payment phase resulted in lost work multiple times. So, it’s not a one-off: there’s a direct line between CX in AR and revenue retention.
Today, the customer journey is increasingly (and in many cases, exclusively) digital, which means that digitization is a crucial component of improving CX. When it comes to accounts receivable digitization, many organizations are starting with tools that focus on improving their internal processes. While this is a reasonable starting place, most companies are not implementing digital tools that create better customer experiences across the enterprise, trickling down to their AR departments.
While nearly all executives agree (96 percent) that their AR department has work to do to be more customer-focused, most (65 percent) have not prioritized implementing tools that focus on the customer experience within the billing and payment process (such as a collaborative online portal) in their digital transformation efforts.
When it comes to digitization of the AR department, CMOs (96 percent) are in lockstep with the CEO (94 percent), CFO (95 percent), and the C-suite generally (96 percent) that there is still work to do in digitizing accounts receivable.
Businesses are embracing AR digitization — but are they forgetting about CX?
Through 2023, our research shows those companies that have not yet fully digitized their AR departments do plan to continue their digitization efforts, but fewer than a third (30 percent) said they plan to place a greater focus on introducing self-service customer portals for payments, collaboration, and dispute management.
In today’s digital economy, businesses that fail to digitize are at a distinct disadvantage: cash is king, as they say, but only if you have customers willing to work with you. Make it hard for them to pay, and your bottom line suffers through delayed payments, or worse, nonpayment.
Your customers are looking to collaborate with you in real time to resolve invoicing issues — and with the right digital tools, you can provide that to them. On the other hand, consider the implications of not offering digital options for AR collaboration:
- Nearly two-thirds (64 percent) of CEOs concur that better communication with customers is a benefit of digitizing AR.
- On top of that, 78 percent of executives say that they see payment conflicts that could have been avoided with better communication.
- Broadly across the C-suite, 95 percent agree that better transparency and collaboration between AR and customers would reduce the invoice disputes their company faces.
CMOs understand this dynamic best, it seems: they nearly unanimously agree (99 percent) that transparency and collaboration would decrease invoice disputes. Compare that with their peers in the rest of the C-Suite: 84 percent of CEOs agree, 97 percent of CFOs, CXOs, CCOs, and COOs, 91 percent of CTOs and 95 percent of CIOs agree.
I think this says something interesting about CMOs: we get it. We get that transparency and collaboration matter to our customers, at every phase of the journey.
As advocates for the customer, CMOs have a role to play in AR digitization
Because CMOs are early adopters and have our fingers on the pulse of CX, it’s up to us to lead the charge on prioritizing CX in all digitization efforts, including back-office processes.
Digitization can significantly increase your organization’s ability to collaborate and communicate in real time, yet if your focus on implementing digital tools is only on solving internal inefficiencies, you may be missing the greatest value of digitization.
In that case, digitization may actually make your CX issues worse. Think about it: you’ve automated invoice presentment, but if there’s a dispute, you offer only an email address for resolution. Here’s what your customer sees:
“Questions about your invoice? Email us at we_will_never_reply@yourcompany.com.”
Do you really think they’ll be incentivized to work with you to resolve the issue?
If you add efficiencies in AR without the customer in mind, you unwittingly make the customer experience even worse, which could undercut your gains in efficiency.
As a CMO, I know that any attempt at added efficiency that is not first aware of the customer (or potential customer) — i.e. the human — experience will fall flat. You’re dealing with humans. Efficiency only works when you humanize the experience.
When AR departments ignore the customer in their digital transformation strategy, there is a huge risk to the bottom line, as our research shows.
Honestly, if I had been given this poll, I too would have answered, yes, the C-suite is only as good as its customer experience. That’s because I understand what’s at stake: when you forget the customer in your digitization strategy, you leave money on the table.
Nancy Sansom is Chief Marketing Officer at Versapay. She joined Versapay in 2022. She has twenty years of prior executive experience at PlanSource, PeopleMatter and Benefitfocus (BNFT).
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