Where Should CX Leaders Spend Their Budgets in 2024?
Planning season is fast approaching. Leaders across organizations are again facing difficult investment decisions as they navigate ever-present technology disruptions (this means you, generative AI). While economic challenges have abated some, leaders whose charge includes customer experience (CX) may have the added pressure of demonstrating their value in 2024—especially considering Forrester’s recent finding that CX quality declined for the second year running.
Fortunately, a recent Forrester survey shows that CX leaders are optimistic about the budgets they’ll have as they face these challenges head on. In 2024, 64 percent of leaders anticipate their budgets will increase; about 20 percent expect their budgets to remain level; and fewer than one in five leaders expect a decreased budget.
CX leaders also anticipate shifting how they’ll invest their budgets. In all organizations surveyed, leaders expect to invest more evenly across five categories: personnel; data and research; projects or initiatives they lead; services; and technology. But compared to last year, leaders say they plan to focus more of their investment in these three categories:
- 68 percent plan to spend more on the initiatives that their team leads.
- 59 percent expect to spend more on technology.
- 54 percent plan to invest more in personnel (and shift spending away from external services).
These categories are not mutually exclusive; more than half of CX leaders plan to build their teams’ capabilities in technologies and skills that will help them better understand their customers’ experiences with their brand. This includes improving competence in customer insights, analytics, digital intelligence, and customer feedback tools.
The ability to make these technological investments certainly depends on the size of your budget. About one-quarter of Forrester study participants say the budget for their organization’s CX program (not including salaries) is between $100,000 and $500,000. Forty-three percent report budgets above that range (in some case significantly above), and 24 percent have budgets below it.
Given this wide budgetary range, CX leaders require guidance on allocating their spend in the coming year to best drive action and impact for their organization. Regardless of budget size, CX leaders who want to reverse CX declines and demonstrate value must invest to drive customer-focused action. This includes investing more in technology to create and improve experiences, critical employee skills, unstructured feedback, and predictive modeling. To free up resources for these investments, leaders should plan to cut spending on redundant tech, superfluous surveys, and rarely used skills.
In the year ahead, Forrester recommends that CX leaders take the following actions to help them demonstrate their value:
Increase investments in areas that drive customer-focused action. Tools for journey orchestration, visual collaboration, prototyping, and usability/accessibility testing more directly drive better experiences and the business outcomes that executives crave.
Leaders should develop critical employee skills in analytics, journeys, and conversation design. Take advantage of employees’ deep organizational knowledge. For example, experienced contact center agents are prime candidates for becoming conversation designers. Use their industry and brand know-how to build better chatbot experiences that reflect your company’s brand value proposition.
Cut ineffective and redundant initiatives. Leaders should conduct a technology audit across CX to find and cut bloat in their programs. Include key stakeholders such as customer service/contact centers and digital and user experience research teams. Several CX programs that Forrester has evaluated accumulate unnecessary baggage through redundant and underutilized technologies. Review vendor contracts that include services not being used and look for opportunities to renegotiate or pare down.
Experiment with emerging tech’s current applications. It’s tempting to jump into the cutting-edge applications appearing in many headlines such as generative AI and extended reality, but both come with untested risks. CX leaders should be cautious in how they plan to apply these new technologies.
Consider opportunities to use generative AI to help boost productivity. Teams can use it to improve efficiency in design, derive insights more rapidly, build contact center use cases, and draft chatbot and agent scripts. It’s important to take small steps when utilizing this technology, as potential rewards must be balanced with the apparent risks.
CX leaders who want to reverse declines in customer experience quality, differentiate their firms from competitors, and demonstrate impact to their organizations must make wise decisions about how they allocate their resources going forward. Forrester’s advice is to, first and foremost, realign spending to those areas that will drive action and impact.
Pete Jacques is a principal analyst at Forrester serving CX professionals. He advises leaders on how to build customer loyalty, emotional engagement, and business performance through proper measurement and alignment to strategy. Jacques’s career spans 25 years in CX and consumer insights roles within Fortune 100 companies.