Linking ROI to customer experience is strangling CX budgets, new research reveals
Research from CX Network reveals that CX practitioners need better methods of demonstrating the value of CX initiatives to board members
In the Global State of Customer Experience (CX) 2019 report, it was revealed that demonstrating return on investment (ROI) is the biggest threat to CX investments, according to the 220 industry practitioners surveyed.
Return on investment in customer experience
This marked the fourth year running in the research series where demonstrating ROI has emerged as the top investment challenge, beating other pain points such as integrating CX technologies into existing tools and embedding CX into company culture and processes.
Top customer experience investment obstacles
As with any investment there is often a desire from senior management to see immediate results from CX initiatives. In fact, a report by Forrester noted that in many cases CX yields "direct financial benefits, including faster revenue growth, more sustainable profits and lower costs to serve."
However, with some cases it can be difficult to quantify the effectiveness of a CX program in terms of short-term product development and revenue. While there is a clear correlation between customer experience and retention rates, it can be challenging to prove it was the direct result of CX initiatives.
This is why it is vital for CX practitioners to quantify and measure the benefits of CX initiative, where possible, in an ROI calculation. Once results have been illustrated in inital projects, many brands have found this has won them trust from the board to embark on slightly more experiemental CX projects.
Download the Global State of CX Research
Research from CX Network confirms the power of customer experience as many industries enter a switching economy.
To better articulate the benefits of CX, references to improvements to CX metrics like NPS is a good start. In addition, you can incorporate revenue, customer retention/churn, counts of cross-sell, upsell numbers and building in financial data into your invitation field files. This can range from the cost of goods purchased in the transaction, lifetime value or even the cost of processing the customer.
The business case for CX will provide a platform for a formalized CX roadmap. If this isn’t in place and you do not have the direct backing of stakeholders across the organization, your CX inititiave will struggle to launch.
Be sure to check out the full report for strategies on linking ROI to CX and other insights, including the removal of data silos and building a customer-frst culture.