• November 8, 2019
  • By Ian Jacobs, vice president and research director, Forrester Research

The ‘Cost Center’ Notion Must Go (Finally)

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‘Back where you started, here we go round again/ Back where you started, come on do it again’ —The Kinks (‘Do It Again’)

Metrics drive behavior. Or so I’m told. Repeatedly. It’s obviously an oversimplified view of human and organizational behavior, as are most aphorisms. But I come out of the contact center and CRM world, where it is not just a single metric or even package of metrics that drive behavior; our whole attitude about customer support gives the marching orders. Companies over the past 30 years have seen call centers and then contact centers as gaping money pits—or, more politely, as “cost centers.” It is well and truly time to kill that strain of thinking and instead promote the customer-obsessed thinking in which pretty much all companies claim they are already engaged.

Why do I think that companies are not taking their own messaging about customer experience and customer obsession seriously enough? For starters, Forrester Research data on consumers’ perceptions of their experiences with brands tells me so. Every year, Forrester surveys more than 100,000 consumers about their experiences with hundreds of brands across nearly two dozen industries. Those surveys result in the Forrester Customer Experience Index, or CX Index for short. And for the third year in a row, there was not a single company that those consumers rated as providing excellent experiences. What if companies claimed to throw a party and everyone showed up…except there was no guacamole, no chips, no drinks, no canapes, no furniture, and not even a ceiling on the building? That seems to be what’s happening as organizations bang on about their caring for customers and customers not feeling the love.

OK, customer experience is stagnating, despite all the blather in the marketplace about its primacy in corporate thinking. How do we fix that? I’m not going to claim to have the answer overall; I know what we can do about the customer service and customer interaction pieces of customer experience. For those critical roles, I will circle back to my earlier assertion: Eradicate the notion that customer care acts as a negative line item on the corporate balance sheet.

That “cost center” thinking triggers real-world consequences. If contact centers are simply a drag on a company’s profitability, the goal of contact center leaders must be to take costs out of the business. From that wellspring flows a steady stream of negative customer experiences: interactive voice response systems that provide no easy way to escape automation and reach a human being for help; chatbots that can’t handle even the slightest variation in workflow from its original design; agents rushing customers off of support phone calls; and the list goes on and on.

The biggest incongruity of all of this? The underlying assumption just isn’t true. If contact centers drive positive customer experiences, those customers end up making the company more money. The CX Index data shows year after year that the companies that provide the best experiences can grow revenue faster, drive higher brand preferences, and charge more for their products than CX laggards. If we just start to think of contact centers as drivers of these benefits—because contact centers are drivers of these benefits—then the cost picture changes dramatically.

If companies continue to tout their CX focus, it’s high time they start to act and invest as if that were true. Let’s take a look at all of our cost-cutting metrics and analyze the real long-term impact on CX—and from there, the impact on our companies’ financial well-being.  

Ian Jacobs is a principal analyst at Forrester Research.

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