Alignment Is Critical to Improving CX

With most economists expecting a recession, companies that develop customer-obsessed growth engines will continue to thrive, Forrester Research suggests in a new report.

To build customer-obsessed growth engines, companies must focus on maximizing value, which will ultimately increase the propensity for customers to spend and increase brand loyalty, according to Forrester.

Additionally, companies with customer-obsessed decision makers at the director level or higher have 2.5 times better revenue growth and 2.2 times higher profitability than organizations that are not customer-obsessed.

Customer-obsessed growth engines must also relentlessly drive internal alignment, according to Forrester. “When internal stakeholders and functions fly information, everything moves faster, including your growth curve,” it says in the report.

U.S. decision makers, again at the director level or higher, with high alignment levels across their customer-facing functions (marketing, customer experience, and digital) have 2.4 times the revenue growth and twice the profitability growth as those without internal alignment, the research firm says.

“Start with the core revenue-generation functions,” Forrester recommends. For B2C firms, those are marketing, CX, and digital. For firms focused in the B2B space, the revenue-generating functions are sales, marketing, and product.

“But don’t stop there,” Forrester adds. “Align technology teams to quickly address new customers and market realities. Consider using a journey-centric approach to drive alignment and establish aligned metrics that measure both customer and business value.”

The need for alignment extends to internal functions as well. Those should be aligned around customer value. With such a central goal, Forrester says, teams can focus on their areas of expertise, then collaborate across the organization to establish a comprehensive understanding of customers and to create ways to deliver value to customers.

Forrester says that B2B marketing leaders are often the first to recognize the importance of alignment and typically have the most complete understanding of the full customer life cycle. Product teams solve problems and identify unmet needs that can open new sources of value and growth.

“Improving marketing’s alignment with other departments, including sales and product, was among B2B decision makers’ most cited needs to support their priorities over the next 12 months,” according to Forrester.

For B2C organizations, marketing leaders need to develop brand experiences that inspire customer loyalty. The best-functioning CX programs are focused on voice-of-the-customer (VoC) programs and inclusive design, according to Forrester. Digital teams at these companies focus on core digital products, services, and sales.

With digital alignment and CX in focus, these organizations have seen 2.4 times the revenue growth, 1.8 times the customer retention, and twice the profitability as organizations without such alignment, according to Forrester.

Forrester stresses that while customer-facing functions should be the focus for organizations, they can’t ignore tech functions, which can also boost the impact of their customer-focused efforts. Firms that have refocused their technology strategy on customer obsession enjoy higher revenue growth than those that don’t.

“Leadership must center the strategy on customer value; architecture and app teams must deliver with speed and creativity; and security teams must protect the brand, all while working in lockstep with the aligned priorities of customer-facing teams,” Forrester says.

One firm that successfully aligned its technology in this way, according to Forrester, was Oshkosh, an $8 billion industrial firm. The company spent four years aligning its technology to focus on customers, investing not only in the technology platform but also in the talent and culture to support it. Oshkosh automated 100,000 hours per year of work that used to be performed by humans, improving operating income by $50 million through 2021. Though not yet reported, similar results are expected for 2022.