Customer Experience Measurement Must Be Consistent
Despite an industry-wide understanding of the importance of customer experiences to overall business success, many organizations are still not consistent in their approaches, Gartner noted in its recent Gartner 2019 Customer Experience Management Survey.
At the same time, Gartner said that more than two-thirds of CX leaders expect increased budgets in 2020, a significant jump from the 47 percent who said they expected budget increases two years ago when the last survey was conducted. However, only 20 percent said that they expected their budget increases to be “significant.” It was up to each respondent to determine what “significant” meant.
“Organizations have matured in their understanding of the business outcomes that CX delivers,” says Augie Ray, a Gartner vice president and analyst covering customer experience. “As a result, the budget outlook is expected to grow to match. This raises the stakes for CX leaders to select metrics that demonstrate impact and prove the value of CX to business results.”
Though the percentage of market leaders who expected increased budgets had grown since the previous survey, Ray says he expected an even higher percentage of CX leaders to expect budget boosts this year, particularly since 86 percent of survey respondents said they expected their companies to compete, at least in part, on the basis of CX within the next two years.
CX leaders have been given more autonomy in designing and executing corporate CX strategies and programs, Ray says. More than one-third (37 percent) of respondents said they were the only ones within their organizations to have responsibility for the corporate voice-of-the-customer program. Additionally, those responsible for defining personas jumped from 37 percent in the previous survey to 54 percent in the current one. Other survey results also pointed to increased responsibilities within the marketing department.
As a result, CMOs need to closely monitor costs, revenue, and other key performance indicators (i.e., customer retention) associated with these programs to demonstrate the financial benefits to C-suite executives who determine budgets, according to Ray. “CMOs need to understand and use data to define the financial benefits of their programs to their organizations.”
Even though it might seem intuitive for CMOs to provide such cost-benefit analyses to justify budget requests, only a little more than one-fifth (22 percent) of those surveyed calculated how customer experience affected corporate financials, according to Ray. Those who had done so received more significant budget increases.
Among metrics, customer satisfaction is key, as the Gartner survey revealed that CX leaders who know how customer satisfaction drives business results get larger budgets.
To positively demonstrate success and prove the value of CX to business results so that they can increase their budgets, or at least prevent budgets from being cut, Ray recommends that CX leaders do the following:
- Use customer data to demonstrate CX’s business impact: One of the keys to sustain attention from leaders and collaboration from peers is to make CX matter in terms of the results that are important to them. Prove how satisfied customers drive up revenue, lower churn, reduce costs, and grow the business by combining customer satisfaction data with transaction and operational data.
- Budget for effective CX execution in the future: Developing a CX budget isn’t just a once-a-year process. Always monitor budget and performance and consistently promote the organization’s CX successes and impacts. It’s important to plan ahead for the annual budgeting process by collaborating with key stakeholders, gathering data, and drafting a persuasive budget to accomplish the organization’s CX goals.
“CX leaders should consistently measure the value of improved customer satisfaction to the organization to justify and sustain growing CX budgets,” Ray says. “This is especially important in a period where many expect an imminent economic recession and organization-wide budget cuts.”