The future of customer experience: strategies for unlocking ROI

As a customer, you know that good experiences are good for businesses. You go back to companies that treat you right and avoid those where you have bad experiences. Even if you can’t avoid a company that treats you poorly, you likely behave in ways that cost the firm money. You don’t forgive mistakes, co-operate less with staff, and look elsewhere when you have extra money to spend.

Forrester’s research confirms that good CX increases revenue and resilience and lowers cost. This is reflected in our data, collected from many examples of B2C and B2B firms across industries such as finance, healthcare, manufacturing, retail and utilities.

The numbers aren’t encouraging. Scores in Forrester’s CX Index study are largely flatlining or declining. Let’s use banking in the US as example: only five out of 26 banks managed to reach the “good” category; most are okay, none are excellent. Bad CX affects trust. Most banks have middling trust ratings and only the leading banks in our CX Index also lead Forrester’s Trust Index. Bad CX also changes customer behaviour. Only two in 10 frustrated customers plan to purchase more or advocate for the bank, whereas the figure is eight out of 10 of customers who feel valued.

Challenges in realising CX ROI

If improving CX makes business sense, why don’t we see significant change?

The first hurdle is the “here and now” bias. Firms (and stock markets) crave immediate results, especially when in crisis. They optimise for short-term gains even at the expense of longer-term growth. Investing in CX now drives customer loyalty, but the payoff is delayed.

The second hurdle is that improving CX is complex. As firms scale and lose direct contact with customers, leaders and employees look inward. They focus on process efficiency and hitting their own teams’ goals. And while many customer journeys cross those silos, firms lack mechanisms that help silos work together. As a result, they fail to help customers get value on their journeys.

What can you do as a CX leader? 

As a CX leader, you must orchestrate CX work and act as a “multiplier”. Adopt three strategies to do that: first, appeal to the emotional hot topics of leaders and create a sense of urgency. You can lean into the here-and-now bias and pick CX investments that contribute to executives’ short-term goals, such as cost savings and customer growth. To create a sense of urgency, illustrate what happens when your firm doesn’t invest in CX today. For example, the CX lead at Anglian Waters showed that the firm would fall behind competitors for good.

Second, prove that your work adds value. Pick lighthouse projects that you can contribute to. Then tell the story of how your repeatable and effective way of working boosted the success of others. Also create a CX team scorecard that measures your team’s contribution to organisational success and the organisational culture, as well as how internal stakeholders experience their interactions with your CX team and how productive and skilled the CX team is.

Third, ramp up your own empathy for internal stakeholders. How do they make decisions and which pressures do they face? To do that, pick a recent decision that boosted CX and one that didn’t. Map both decisions like you would a customer journey and create an empathy map for involved stakeholders. Finally, identify when and how you should bring in data, insights and tools to help stakeholders make better decisions faster and with less risk.

What can you do as an executive?

As a leader, you know that good CX is the path to loyalty and earned growth, but you need to be aware of the shadow you cast.

First, hold yourself accountable for your own daily habits. Our CX Commitment checklist shows specific behaviours that are conducive to customer-obsessed leadership. Some are easier, such as spending a significant amount of time with customers and sharing what you learned internally, or regularly engaging with customer and employee feedback and asking others to do the same. Some are harder, such as stopping projects when customer impact seems negative, or abolishing metrics that reinforce an inward focus. Check your habits, continue those that align with customer obsession and commit to adopting three new habits from the list.

Second, challenge your colleagues and direct reports to review the governance mechanisms that affect CX, such as metrics, decision-making bodies and budgets. For example, Pitney Bowes changed metrics to create shared accountability across departments for customer goals.

Third, empower, inspire and enable a customer-obsessed culture among employees. Personally acknowledge and celebrate their CX contributions. Make resources, tools and training available. But don’t just add to their jobs. Instead, remove policies, processes or tasks that hinder employee focus on customers. For example, leadership at Hampton Hotel changed the timing of when paperwork was due so hotel managers could spend more time with guests.

Let’s get back to where we started: we are all customers. That means we can also do something. Let’s reward firms that treat us right by bringing them more of our business, by being kind to employees, and by telling them and others about enjoyable experiences.

You can register to attend Forrester’s CX Summit EMEA from 24-26 June 2024 here.