How to demonstrate the ROI of customer experience in tough times
Demonstrating the ROI of customer experience (CX) has become a necessity in today’s economic turmoil. In fact, Forrester predicts that 1 in 5 CX programs will disappear as senior management fail to see the benefits in 2023. The analyst believes that, even with 82% of CX leaders expecting their budgets to rise this year, many will see budget cuts instead. Unfortunately, CX remains a prominent target for cost cutting in a downturn.
The expanding priorities of CX leaders
While the need to demonstrate a clear ROI of customer experience is becoming increasingly important, it remains just one of many priorities for today’s CX leaders. They need to make sure that the CX department is delivering excellent customer support in order to differentiate and retain customers in an increasingly competitive market. Plus, with cost-cutting a greater focus, CX chiefs are also under pressure to show that customer service contributes to profits rather than being a cost centre. On top of this, the CX leader must ensure that the Voice of the Customer (VoC) is represented across the business. And finally, they have to ensure customer satisfaction is being delivered while containing costs.
A worrying insight from Forrester is that 54% of CX teams can’t actually prove the ROI of customer experience projects. So, here are four important considerations to help maximise the ROI of CX:
1. Link CX to bigger business objectives and metrics
To build an effective CX programme it is essential to align it with overall business objectives and brand promises. Sit down with key stakeholders to find out their priorities. Bringing them on board from the beginning will help gain support and advocacy for your CX initiatives.
Making CX significant to senior management means going beyond traditional contact centre efficiency metrics such as Average Handling Time and First Contact Resolution. While these remain important, embrace metrics related to the success of the business such as CSAT scores and NPS. These show CX’s contribution to increasing customer satisfaction, loyalty and repeat business. Similarly, teams should prioritise KPIs related to financial goals such as increasing customer retention, supporting upselling or growing customer lifetime value. Supported by the finance team, CX leaders must be able to confidently report on these metrics. And to keep key stakeholders engaged look for innovative way to present the results, such as via interactive dashboards rather than static PDF reports.
2. Focus spend where it will deliver efficiency and improved customer satisfaction
CX leaders have a huge range of potential projects to invest in. But budgets are tight right now, and they have to ensure every penny is focused on areas that can demonstrate value. Projects related to chatbots and self-service technology, for example, can help reduce costs and improve customer satisfaction. Similarly, initiatives that improve back-end automation reduce admin time for agents. This enables them to handle more customer interactions – whether that is customer calls, emails or social media messages.
3. Improve the skills of your CX teams
According to Forrester, many CX teams lack crucial skills – including the ability to build business cases and modelling ROI. Hence it is a priority to nurture the mix of skills in the CX team. Invest in training and coaching to help agents and managers to improve at all times. Part of this should include greater collaboration with other teams such as finance, sales, and the back office. This will make the CX team more effective and help with staff retention and development, while improving the customer experience and demonstrating ROI.
4. Listen more carefully to customers
While most organisations run VoC programs, Forrester suggests many customer surveys and feedback initiatives don’t lead to action. CX leaders need to make sure their VoC programmes are meaningful, such as by focusing on actual customer interactions. What are customers saying and, more importantly, why are they saying it? Understanding this context will enable CX teams to solve individual problems, improve business processes and provide insight into larger issues. This in turn, leads to cost savings and demonstrating ROI.
The current economic turmoil will be a watershed for many CX programs. In fact, Forrester believes that 20% of them could disappear. However, those teams that are able to prove their importance will win big. Analyst predict that 1 in 10 of them will come out stronger than ever, with greater resources and increased responsibility. Therefore, CX leaders need to focus on the ROI of customer experience if they want to remain relevant, and employed, as the recession unfolds.