• October 15, 2021
  • By Jared King, cofounder and CEO, Invoiced

How CFOs Can Enhance a B2B Brand’s Customer Experience

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Although it’s a relatively new discipline, customer experience (CX) has become an increasingly important part of a company’s success. So much so that Gartner found nearly 90 percent of organizations had a chief experience officer (CXO) or an equivalent in 2019, compared to only 61 percent of organizations having a CX leader in 2017. With more companies committing serious resources to this discipline, there is an unexpected opportunity for positions throughout an organization to positively impact a company’s CX and, ultimately, its bottom line. 

The B2B CFO playbook for CX impact

While practicing customer empathy is a core responsibility of a successful marketer, the typical CFO may feel more removed from the customer experience. However, B2B CFOs actually do oversee several customer touchpoints that are essential parts of the overall CX journey. Let’s look at how CFOs can help a B2B brand’s CX by examining their brand’s cash flow cycle and making strategic improvements and, from there, critically evaluating associated customer experience metrics such as churn, monthly recurring revenue (MRR) expansion rates, and customer lifetime value (CLV). 

The CFO’s Wheelhouse: the Cash Flow Cycle 

We’ll start with cash flow. The CFO should think about the design and implementation of their brand’s billing, collections, and payment processes with the end customer in mind. Let’s tackle the process as a customer might experience it, starting with billing. 

1. Billing is an underutilized customer touchpoint. 

An afterthought for most designers, the billing experience is a crucial one for a customer. Suppose for a moment that a brand has a slick design across its digital footprint but a lackluster billing design. Receiving bills is a regular human annoyance, and it’s already natural for customers to look at a bill with malaise and toss it into a folder to be forgotten, digitally or otherwise. If the bill design isn’t thoughtfully considered, your customers may promptly forget their payment deadlines. 

The B2B CFO needs to ensure the billing experience is tackled with the same intention and care that a call to action on a landing page might. The B2B CFO is responsible for ensuring their customers pay their bills on time, and ensuring the messaging and design of the billing is brand-aligned is a significant first step. Developing the billing system with client empathy in mind will lead to happy, satisfied customers. And happy customers pay their bills on time.  

For any hesitant-to-pay customers, first comes billing and then comes collections. 

2. Money trees: fostering a nurturing collections process.

Another important way to improve CX through cash flow improvements is to thoughtfully and meaningfully develop the payment collections process. The collections process is the B2B CFO’s most direct opportunity to showcase empathy for their customer base while simultaneously achieving their primary financial goals. 

As a business leader, B2B CFOs are positioned uniquely to relate to their customers who might be struggling to meet their financial obligations. The B2B CFO must consider the messaging, tone, timeliness, and leniency of their business’s collections process. Showing proper, timely empathy to the customer may convert a hesitant customer into a reliably paying brand-evangelical. 

3. Reaching the summit: securing payment.  

Customers tendering payment is the most critical moment in the cash flow cycle. The B2B CFO must be willing to invest in the ability for their brand to seamlessly, securely, and reliably accept payment. If the B2B CFO can make this as simple and secure as possible, they’ll observe the benefits of their customers consistently paying faster and more reliably. And again, as an operator, the B2B CFO understands the risks businesses face by sharing their financial information with other institutions. 

Measuring CX Success: Churn Rates, MRR Expansion Rates, and CLV

The B2B CFO can evaluate how the changes made to the cash flow cycle influence their brand’s customer experience by monitoring the following CX metrics: churn rate, monthly recurring revenue expansion rates, and customer lifetime value. 

1. Where did they go? Looking at customer churn. 

Customers churn when they’re displeased with the value of a business’s product or service. If customers churn, a business suffers financially. 

While a B2B CFO is probably already aware of their brand’s churn rate, it’s advantageous to monitor the churn rate over time and where they stack up against the industry benchmarks. Here are those benchmarks when looking at churn rates of B2B companies specifically: According to CFODive, “Those with the highest success have a typical churn rate of .6 percent a month, or 7 percent annually, while those with the lowest success have 5.7 percent monthly churn, a 50 percent annual loss rate.” It’s plain to see that prioritizing churn rate is vital to enable a company’s growth engine. 

Making the appropriately empathetic changes to the billing and collections phase of the cash flow cycle will logically lower churn as customers stay longer. 

2. The expansion MRR rate tells a story. 

As defined by the Corporate Finance Institute, “Expansion MRR rate is a metric that indicates the rate at which a company’s expansion monthly recurring revenue (MRR) grows from month to month.” Expansion MRR is indicative of the supplementary revenue generated by the brand’s existing customers. Additionally, the MRR expansion rate can illustrate the most individually valuable customers to a brand. 

Monitoring the expansion MRR informs the B2B CFO whether the CX changes made to the cash flow cycle, and any special attention paid to high-value clients, are paying dividends for the brand.  

3. Increasing customer lifetime value.

CLV is the cumulative worth of a customer to a company, on average, throughout their relationship. If the B2B CFO optimizes the CX of the billing and collections process, the CLV should naturally increase as better serviced customers may be inclined to stay longer—a dynamic similar to churn but in the opposite direction.

Monitoring CLV over regular intervals is advantageous to ensure that the cash flow cycle changes consistently contribute to the customer base’s retention. Brands tend to evolve over time and the B2B CFO can evolve the CX aspects of the cash flow cycle to match this evolution. 

Empathy Will Always Be the Way

Although CFOs traditionally pride themselves on being the steady hand at the wheel of the ship, they do have opportunities to empathize and connect with their customer base to further ensure that their business obtains its financial goals. 

B2B CFOs, in particular, understand the rigors and pressures of running a business and are uniquely positioned to enhance their brand’s customer experience with little thought and intention. Utilizing the cash flow cycle playbook detailed above and empathy, the B2B CFO can help their brand not only hit their goals but raise expectations throughout the firm and best serve the brand’s customer base. 

Jared King is cofounder and CEO of Invoiced, the category-defining company in the field of A/R automation. Invoiced serves the billing and collections needs of more than 20,000 businesses in 92 countries and processes more than $2 billion in client receivables every month, giving King a unique vantage point for how cash management, business process improvement, and technology come together to help companies get paid faster, waste less time on collections, and provide better payment experiences for their customers.

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