CX for Skeptics: Showing the ROI of CX
Choose one of three approaches, and get Finance and Analytics to help with the math
If you’re like most customer experience (CX) practitioners, you believe CX essentially drives the business, because if you improve customer results, business results are bound to follow, right? You’ll retain more customers, sell them more, and create more referrals.
Multiple studies back this up. Watermark Consulting found that companies with superior customer experience generate stock returns 45 points higher1 than the general market. Meanwhile, the XM Institute found that companies that improved their customer experience scores by 10% saw a 25.8% increase2 in three-year revenue. And Siegel+Gale found that the “simplest” brands – those that have succeeded most in delighting customers with their ease of use – outperformed major stock indexes by 679%3 over a 10-year period.
Unfortunately, it’s a lot more challenging to show the impact of CX within one company than it is across dozens or hundreds of companies, as these studies do. According to Maxie Schmidt-Subramanian4 at Forrester, “only 14% of CX professionals strongly agreed that the return on investing in CX is well established in their firms.” Additionally, CustomerThink5 found that 75% of CX programs couldn’t show a business or competitive value to their work.
Citing these studies won’t do the trick at your annual budget-request meeting. Can you imagine telling your
leadership that broad data shows improving customer experience can result in more than 25% growth in revenue then taking credit for the companys 10% growth rate because you made some CX improvements the previous year? How do you think your peers in Sales and Marketing would react to your claim?
You’d be laughed out of the room.
CX has been an established discipline for at least ten years, and executives are getting impatient to see its
impact in terms that are meaningful to them. In fact, Forrester predicts that in 2020, one in four CX pros6 will lose their jobs, precisely because they aren’t showing impact.
But showing the ROI of CX could not only help you keep your job, it might also help you do it better:
According to Gartner, CX leaders who show the relationship between their initiatives and business outcomes are more likely to expect budget increases.7
This white paper explores three possible ways you can link your CX program to business outcomes in terms that will impress the C-suite: End-to-End CX Impact; Behavioral or Operational CX Impact; and Journey CX Impact. Choose the one that’s right for you based on the maturity of your CX program and the data you can access. We also identify the relationships that you’re going to want to build early on in your efforts in order to ensure your success. (It turns out the Beatles were right: You’ll get by with a little help from your friends.)
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