The Business, CX Case for the Prioritization Model

Choosing what to do, and having reasonable certainty that it is the right thing to do, is increasingly important. How can a prioritization model help?

Mark Twain famously said, “buy land, they’re not making it anymore.” The same could be said of time, and although it’s not for sale, time does need to be treated as a precious commodity both in our personal lives as well as in business.

When translated to a business context, time ranks up there with information or data as one of the most valuable non-tangible assets. Therefore, choosing what to do, and having reasonable certainty that it is the right thing to do, is increasingly important.

This is not for a lack of things to do, however. I would venture to say that no successful organization has the challenge of not having enough to do. Instead, there are likely many competing priorities that all have good reasons (depending on who you ask) for being moved to the top of the queue. One incredibly useful tool in order to help take a long list of potential initiatives or projects that all seem of prime importance and sort into an order of importance is a prioritization model. This is essentially a ranked list of items from most important to least.

The Case for the Prioritization Model

I have developed a few prioritization models over the years, and some can get quite complex, though in most cases a simple approach is often enough. Here is a simple formula we can use as an example, with each item being ranked on a scale:

Priority = a (Benefit to the Business) + b (Benefit to the Customer) + c (Customer Reach) – d (Cost to Implement & Measure)

or, Priority = a + b + c – d

For reference, values ranging from 1 to 5 works well for a relatively short list of items, and 1 to 10 works better for longer lists.

Again, this is a simple formula, but some of that is by design. You can certainly make this more complex by weighting different components, separating cost to implement and cost to measure, or many other things, and I’ve done as much with some of my consulting clients depending on the need. Remember, however, that a consistent approach to ranking and prioritizing is as valuable (or more valuable in many cases) to spending an inordinate amount of time trying to get the formula just right.

Now that we’ve looked at the formula you can use as you rank and prioritize your queue of potential projects and initiatives, let’s explore what we mean by each of these elements in the formula I provided above.

Related Article: How to Use Business Value to Prioritize Company, Customer Initiatives 

Elements of the Prioritization Model

Benefit to the Business

There are many ways to calculate benefit to the business, and I’ve seen a wide range of thought processes on how to calculate this, but the most effective ones have been relatively straightforward and along three lines:

  • Revenue or profits generated.
  • Strategic alignment.
  • Cost savings or efficiency gains.

Depending on your ability to predict these items, this can range from being a rather scientific exercise, to one more based on intuition. I recommend trying to make it more of the former than the latter, but some of the benefit of this prioritization exercise is in the relative measurements, so as long as you stay consistent in your assumptions there is still a lot of value to be gained.

Benefit to the Customer

Similar to the previous item, benefit to the customer may be able to utilize some of your existing measurements as a basis. Here are a few ways to think about this:

  • Increasing customer satisfaction.
  • Decreasing customer effort.
  • Increasing customer retention.

For instance, if you are already using Net Promoter Score (NPS) to calculate customer satisfaction, you could think of this in terms of an estimate of how much you might be able to increase NPS at a certain stage, or across the customer lifetime.

Customer Reach

Another way of looking at prioritization and assessing the importance of an initiative is to determine the universe of your customer audience that it will impact. If, for instance, an initiative is incredibly important and will have a big impact on a segment of your audience, but that segment only makes up 10% of your audience, you should take that into consideration when prioritizing it.

One nuance here that you may need to adjust for is the value of a particular portion of your audience. If you have different audience segments with vast differences in value (e.g. freemium uses of a SaaS platform versus enterprise users that spend millions of dollars per year), you can’t use quite as simple a number here.

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