5 CX Budget Recommendations for the Coming Year
Despite the current worldwide economic crisis, more than four in five (82 percent) customer experience leaders expect their budgets to rise in the next year, according to Rick Parrish, a vice president and research director at Forrester Research.
Parrish calls such an expectation “overly optimistic,” an opinion that is backed by a history of companies cutting budgets—particularly marketing budgets—during economic downturns.
“We expect most CX programs will have to cut spending in at least some CX areas as economic turbulence continues,” Parrish wrote in a Forrester blog. “In this environment, CX leaders must maximize the ROI of their CX programs.”
CX leaders need to slash spending in areas that are prone to waste, according to Parrish. For most companies, one of those areas tends to be surveys, particularly those that don’t result in action. Therefore, Parrish recommends that companies examine their surveys to see which ones they are currently using or expect to use soon.
Beyond underused or unused surveys, other areas that are prone to waste by CX departments, according to Forrester, include the following:
• unnecessary user access to software-as-a-service CX platforms;
• surveys that aren’t driving action;
• bloated voice of the customer technology contracts; and
• in-person contact centers.
Parrish adds that CX leaders should be realistic about their organizations’ ability to move forward on new CX initiatives during the next six to 18 months. Budget increase requests should be limited to areas where the CX leader has already proven that survey insights are providing noticeable CX and business improvements.
In its CX Planning Guide 2023, Forrester says that companies’ smaller CX budgets are spread across many areas, including customer insights, voice-of-the-customer programs, customer feedback management, customer data platforms and other technologies, experience design, and compensation for CX professionals.
CX leaders who expect a bump in their budgets would like to see increases across all categories, according to Forrester. However, the research firm expects CX leaders to instead have to reduce their budget expectations in some areas, especially for tech subcategories like prototyping, visual collaboration, and usability testing.
Forrester identified the following as the most productive areas for CX leaders to invest in 2023—and, therefore, the areas most likely to be approved for increases in spending (or less likely to be cut):
- Projects for which the CX leader can show evidence of positive ROI. The clearest evidence of positive ROI are metrics that demonstrate improved revenue or profitability. Forrester recommends “crafting a value statement that serves as an elevator pitch to use with executives.”
- Skills development for existing CX staff. Some staff lack critical skills, such as data literacy, storytelling, business case/ROI modeling, journey orchestration, and survey design.
- Technologies that democratize and accelerate customer research, including experience research platforms and collaboration tools, which enable CX staff to conduct customer studies without the need to hire outside help.
- Customer journey orchestration technologies that help companies correctly respond to customer behavior in real time. Customer journey orchestration platforms can also model changes in customer behavior in real time, enabling companies to respond more quickly to these shifts. Forrester calls these platforms “a critical need for CX [because] they help companies differentiate for customers who seek adaptive, personalized experiences.”
- Contact center technologies designed to improve CX and reduce expenses. This includes conversational artificial intelligence, which Forrester calls a critical technology, regardless of whether it is implemented as a chatbot for digital interactions or an intelligent virtual agent for voice interactions. Most organizations will benefit from a well-designed self-service capability that escalates to a human agent when necessary. Artificial intelligence is a critical technology to speed along self-service and to provide efficient interactions, even if the communication needs to be escalated to a human agent.