Forrester: The only CX metric that matters has a $-sign in front of it
ORGANIZATIONS understand the value of customer experience (CX) and given the demand from customers for better, smarter, and more digital experiences, are pursuing numerous projects in the CX space.
Most companies, especially in the banking and financial services, retail, and utility sectors, like to measure improvements to CX using metrics such as the Net Promoter Score (NPS) and level of effort — but Forrester VP and Research Director Harley Manning believes that’s not the best option.
In a recent blogpost, the VP dismissed NPS along with other metrics including customer satisfaction (CSAT) scores and the analyst firm’s very own Customer Experience Index (CX Index).
“The metrics your C-suite wants you to report have dollar signs in front of them. Specifically, they want to hear how your CX projects and programs made money for the company or saved money for the company. And they want specifics, and they do not want to have to connect the dots for themselves between NPS (or CSAT) and $.”
According to Manning, the reality is that business leaders think in terms of dollars, be it cost reduction, revenue growth, or profitability. As a result, they respond to CX projects best when they’re measured in terms of costs.
To put things in perspective, Manning referred to an example from his book Outside In — in which, a CX project that makes it easier for customers to use the online self-service portal instead of calling a representative is represented better as one that “saves the company US$4 million per annum” rather than one that “delivers 22 percent more happiness to customers”.
Manning’s intention isn’t, of course, to say that customer happiness, satisfaction, or delight aren’t key to the business in any way — but ultimately, projects that get measured in dollar terms tend to get more traction and give better visibility to business leaders.
The Forrester VP’s suggestion is aligned with the firm’s latest predictions for CX in 2020 which forecasts that companies that fail to prove the economic value of CX projects will shun them in the coming year. On the other hand, those that can put a dollar figure on the return of CX projects will hire and promote CX executives at senior levels.
In the coming year, the businesses that measure CX in dollar terms will definitely do better than those that don’t.
Truth be told, getting started with associating a dollar-value to CX projects might seem hard at first, but as seen in Manning’s example, it’s really not very hard.
Executives simply need to visualize how changes in customer behavior resulted in cost reduction, revenue growth, or profitability — the things that business leaders really care about. It’s that simple.
- New industry guidelines make facial recognition-based payments safer
- Can e-wallets really take off if user concerns remain unaddressed?
- Experts believe that AI can enhance the clinical decision support system
- Data sharing in manufacturing offers an untapped value of $100b
- If anyone can successfully launch a digital currency, at scale, it is China