The Business and CX Case of the Prioritization Model

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It is increasingly important to choose what to do and to have reasonable certainty that it is the right thing to do. How can a prioritization model help?

Mark Twain said, “Buy land, they don’t do it anymore.” The same could be said of time, and although it is not for sale, time should be treated as a precious commodity, both in our personal lives and in business.

When translated into a business context, time ranks among information or data as one of the most valuable non-tangible assets. Therefore, choose What do, and being reasonably certain that it is the right thing to do, is increasingly important.

It’s not for lack of things to do, though. I would dare 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 reason (depending on who you ask) to be moved to the top of the queue. An incredibly useful tool to help take a long list of potential initiatives or projects that all seem to be of primary importance and sort them in order of importance is a prioritization model. It’s basically a ranked list of items from most important to least important.

The case of the prioritization model

I’ve developed a few prioritization patterns over the years, and some can get quite complex, although in most cases a simple approach is often sufficient. Here is a simple formula that we can use as an example, with each item ranked on a scale:

Priority = a (Business Benefit) + b (Customer Benefit) + c (Customer Reach) – d (Implementation and Measurement Cost)

or, Priority = a + b + c – d

For reference, values ​​between 1 and 5 work well for a relatively short list of items, and 1 through 10 work best for longer lists.

Again, this is a simple formula, but some of it is intentional. You can certainly make this more complex by weighting different components, separating implementation cost and measurement cost, or many other things, and I’ve done the same with some of my consulting clients as needed. . Remember, though, that a consistent approach to ranking and prioritization is as valuable (or more valuable in many cases) than spending excessive time trying to get the formula right.

Now that we’ve looked at the formula you can use to 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 and Customer Initiatives

Elements of the prioritization model

Benefit for the company

There are many ways to calculate business benefits, and I’ve seen a wide range of thought processes on how to calculate this, but the most effective ones have been relatively simple and revolve around three axes:

  • Revenues or profits generated.
  • Strategic alignment.
  • Cost savings or efficiencies.

Depending on your ability to predict these elements, it can range from a rather scientific exercise to one based on intuition. I recommend trying to do more of the former than the latter, but some of the benefits of this prioritization exercise lie in the relative metrics, so as long as you stay consistent in your assumptions, there’s still a lot of value to be gained.

Benefit for the customer

Similar to the previous item, the customer benefit may be able to use some of your existing metrics as a baseline. Here are some ways to think about it:

  • Increase customer satisfaction.
  • Reduced customer effort.
  • Increase customer loyalty.

For example, if you already use Net Promoter Score (NPS) to calculate customer satisfaction, you can think of this as an estimate of how much you might increase NPS at a certain stage or throughout the customer’s lifetime.

Customer reach

Another way to look at prioritization and assess the importance of an initiative is to determine the universe of your customer audience that it will impact. If, for example, an initiative is extremely important and will have a big impact on a segment of your audience, but that segment only represents 10% of your audience, you should take this into account when prioritizing.

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

Related Article: The Long Tail Effect and What It Means for Customer Experience

Implementation and measurement cost

Last but not least (certainly not to your CFO), we need to calculate what it will cost to implement the project or initiative. It can be a combination of budget and internal resources. It is the only element of our prioritization formula that is subtracted versus added. Thus, higher values ​​for cost mean more dollars and resources allocated.

For organizations where budget is a primary consideration over others, you may need to weigh this a little heavier, although you can easily do this in your formula by replacing it with something like:

Priority = a + b + c – (d * 2)

This would give d, or our cost variable twice the weight of the other elements.

Also, I’ve often split this category into two separate metrics: implementation cost and measurement cost, because often the two can vary in complexity. You can make this determination based on your own organization, as well as the complexity of your prioritization model.

Using the Prioritization Model

The most effective way to use the prioritization model I described earlier is to add your potential list of projects or initiatives to complete in a spreadsheet and, within each row, complete the scoring exercise of each element. Soon you will start to see patterns, as well as where you should be focusing some of your effort. As I mentioned earlier, one of the biggest benefits of using a prioritization model is seeing your potential projects and initiatives in relation to each other. This perspective when everything is aligned as such is valuable both for you, your team, as well as other stakeholders.

Speaking of them, I must also point out that stakeholders and leaders routinely ask for justification of the budget and the allocation of resources and expenditures. Using a prioritization model such as this can “back up” the rationale for some of your decisions. It can also allow you to compare and contrast the different choices that can be made, with clear reasons why you are making the choices you are proceeding with.

I recommend that you apply human judgment to this too, of course. There may be data or information that a simple algorithm is not able to capture that may need to be taken into account, once a “short list” of priorities is established at the using this method. It’s perfectly OK. Consider this prioritization model as a good starting point for making a good decision.

Answering the question “What do we do next?” can be difficult and what you prioritize can have long-term positive (or negative) impacts on your organization.

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