A Fifth of CX Programs Could Disappear in 2023

With most economists expecting a recession this year, and some indicating that the country is already in one, Forrester Research is predicting that one-fifth of all customer experience programs could completely disappear in 2023.

In light of the bleak economic outlook, many companies are cutting back on their marketing budgets, with CX being among the areas where the most aggressive belt-tightening might occur, the firm concludes in a recent report.

“The estimated 80 percent of companies for which great CX is not part of their brand identity will finally demand proof that spending and CX improvement is necessary, and some of those companies will dissolve CX teams that can’t show the numbers,” says Forrester analyst Rick Parrish. “That’s bad news for the 54 percent of CX pros who told us [their] teams are unable to prove the ROI of their projects.”

Parrish further predicts that members of some of the CX teams that will be dissolved will be absorbed into other business functions, while other CX teams might not be dissolved but will have less influence on companies’ marketing plans.

Parrish also predicts that CX differentiation will erode in 75 percent of all industries. “One-quarter of below-average brands will improve their CX, while half of all above-average brands will see their CX efforts decline or stagnate,” he says.

According to Parrish, differentiation between companies with the best CX practices and those with the worst CX practices is shrinking because lower-performing companies are solving basic CX issues while many top-performing companies are struggling with transformative CX improvements.

The 2023 CX outlook is not all negative, though. Parrish also predicts that CX departments that have good data to prove their value to the business might actually see expansion rather than contraction in 2023. One in 10 CX programs will be stronger than ever this year, he says.

Parrish says that the one in five companies that embrace great CX as part of their brand identity will reward CX teams that can show positive ROI. The leaders of many of these teams will be elevated to the C-suite.

According to Parrish, one-fourth of companies already have CX leaders as part of their executive teams, and CX leaders with this status are in a better position to earn larger budgets for personnel, technology, and project work.

Parrish says that companies that want to continue to improve their CX need to embrace customer obsession and pursue CX efforts that will place them above competitors. Some of the critical skills needed to be successful in this area include design thinking, inclusive experience design, survey design, journey mapping, data literacy, and storytelling.

Trust should also be at the forefront of business priorities this year, Forrester recommends. Customers, it says, are increasingly wary of organizations playing fast and loose with their personal data, and regulators aren’t far behind.

But on a wider macroeconomic level, the interlocking market dynamics of 2023 will require business leaders to stay true to their long-term, strategic visions while operating within unknown territory, Forrester adds. A laser focus on their organizations’ missions and strengths will be the defining factor of success this year, it says.

“In 2023, successful companies will ensure that all of their actions flow from their core mission,” Forrester says in its report. “Eschewing tempting but potentially destructive short-term gains won’t be easy in a shaky economy. Moments like these have the power to accelerate the performance of companies that manage to weather them.”