Why proving the value of CX is more important than everby
18 months ago, forecasters warned that CX leaders unable to demonstrate the value of their customer experience programmes faced budget cuts or redundancies. And things have become more perilous in the interim.
Towards the end of 2019, a few short months before business and customer strategies would be thrown into chaos by the pandemic, the majority of customer experience leaders were confident that they would see budget increases in the coming year.
Gartner’s ‘2019 Customer Experience Management Survey’, which interviewed 401 respondents in the US, UK and Canada, found that 54% of those surveyed predicted a slight CX budget increase in the coming year, while a further 20% forecasted the rise would be a significant one.
But budget increases are also of course accompanied by increased expectations, and Gartner also warned that CX leaders would need to deliver and demonstrate gains to justify these growing CX budgets.
Only weeks after the publication of this research, analysts at Forrester also fired an ominous warning for those customer experience professionals that were unable to demonstrate ROI. In a prediction for the coming year, Harley Manning, VP, research director at Forrester, forecast that as many as one in four CX professionals could lose their jobs if they were unable to demonstrate the value of their programmes.
Flashforward some 18 months, and the situation certainly hasn’t been made any easier by the pandemic.
“I think most, if not all organisations would agree we have gone through some fundamental changes in the last year,” says Charlotte Dunsterville, chief consumer officer at Sure. “There’s been an opportunity to accelerate digital channels but also pressure to reduce operating costs, meaning a squeeze on resources and budgets in many areas of the business, especially if they don’t show a direct ROI.”
But there is also the sense amongst the CX community that after a period of growing interest and engagement, perhaps customer experience’s star is on the wane in the eyes of the c-suite.
“I feel that the whole CX movement has enjoyed something of a honeymoon period over the last decade, and this seems to me now to be over,” suggests Paul Harris, executive director of customer experience at Curo Group. “The c-suite are less seduced by simply the concept of CX and need to see evidence for investing in it.”
Keith Gait, leader at The Customer Experience Foundation, and former customer services director at Stagecoach Bus, believes that perhaps the customer experience profession itself should shoulder some of the blame for CX losing its lustre.
“CX is struggling for attention in the boardroom,” he notes. “We are arguing amongst ourselves what the profession should or shouldn’t be, meanwhile the customers demand, needs, wants, emotions, and expectations are developing rapidly, and companies are just getting on with adapting at rapid pace to keep up. The navel gazing over what CX is or isn’t has to stop and we have to just get on with delivering on the ground, operationalising everything in 2021 in real time for real customers in whatever new world we find ourselves in.”
There is also the fact that - when push comes to shove - boardrooms simply have a tendency to prioritise other areas in their plans: “Tactical and in most cases much needed business improvements (efficiencies and commercial activities) tend to prevail in the short-term, even if the c-suite believes in customer-centricity,” notes Patricia Sanchez Diaz, head of customer experience at Centrica.
The importance of customer experience management
So with all these factors taken into consideration it is little wonder that the powers that be are less inclined to dish out generous budgets without a clear demonstration that customer experience programmes will deliver ROI.
Despite these challenges, however, the feeling amongst the CX profession is that not only does customer experience management remain important to wider commercial success, it is arguably more crucial than ever.
“My belief is that customer experience management is even more important today, due to the environment we are all operating in,” says Nina Jones, head of advisor experience at Fidelity International. “I find a term coined by the US Military really useful to describe our business context, which is VUCA (Volatile, Uncertain, Complex, Ambiguous), which effectively means that disruption to our traditional business models is 'highly likely', as opposed to 'maybe one day'!
“Customer experience management is one way an organisation is able to navigate the VUCA context, as customers are arguably the one constant in the organisation regardless of the context it is operating within! By maintaining a laser focus on deeply understanding customer wants and needs and channelling investment and activity to deliver what they want, organisations are better able to attract and retain their customers.”
Iain O’Connor, senior manager for customer experience and insight at Aegon UK, agrees, adding: “In today’s world customers have more choice than ever. Put simply, if companies don’t deliver for their customer they’ll lose them to the competition. Change is constant and customer experience has been growing in importance for a number of years now. Last year's pandemic accelerated change in many ways and as we emerge into a post-COVID world I think people will be questioning more and more how they spend their time and how they want to interact with companies in future. If effortless CX isn’t part of core strategy and decision making then I think customers will vote with their feet and simply look elsewhere.”
With that in mind, it is incumbent on customer experience leaders to work harder than ever to demonstrate the value of their customer experience programmes and win the hearts and minds of their boardrooms.
“In terms of showing value at senior management level, I do think it comes back to the question of ROI and commercial success and being able to show the link between having an excellent customer experience and the impact to the business in terms of revenues and particularly customer retention,” says Charlotte Dunsterville. “It is commonplace now to claim to compete on customer experience, so senior managers need to do more than just pay lip service to this and really need to understand how the delivery of a good experience supports business success.”
But the reality is that some leadership teams will be harder to convince than others. As Nina Jones notes: “I am unable to comprehend how else a business can be sustainably profitable if the customer is not at the centre of its thinking, investment and activity - however, there are still plenty of organisations out there who are not fully committed to applying investment to where our customers need us to!”
With that in mind, in the next feature in this series we will continue our discussion with customer experience leaders to learn how they are best demonstrating the value of their programmes to business leaders.
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.