Reflections on Forrester's "Measure And Prove The Value Of Your CX Function" report

I talk about growth because I see the need to shake up our discipline. In my first post-introduction edition of this newsletter, I emphasised the impact of CX programs being at risk, because they are not contributing directly to business growth. Forrester's report supports and gives evidence for what I said

Concerning issues and trends highlighted

As CX professionals, despite the touchy-feely outcomes and clever initiatives that we produce, and love share because they alter perception, I would argue that perception improvement is a tertiary outcome. What's primary is the growth. What's secondary is... predictive leading indicators that Lynn Hunsaker, CCXP says "move the CX needle". Here are the gaps Forrester shares in the report, which target CX leaders:

Wavering Executive Support for CX

• Only 51% of respondents agreed that executives act like CX is important most or all of the time
• 46% feel they don't have consistent leadership support for CX

Overreliance on Productivity / Culture Metrics

• Most CX programs only prove success through productivity metrics (e.g. projects supported) or culture change metrics
• Fewer programs show CX's direct contributions to revenue, costs, and business success metrics that resonate with executives

Inconsistent Business Case Development

• Only 22% make a business case for every CX project / initiative
• Just over a quarter are working to restate the business case for CX, likely to regain wavering executive support

Lack of Rigorous Prioritization

• While 76% use a standardized prioritization process, only half consistently factor in ROI or feasibility
• Only 38% incorporate risk assessment into their prioritization process

Symptoms that demonstrate these trends

1. Wavering executive support for CX initiatives:

Organizations launch major CX transformation programs, but after a change in executive leadership, CX efforts are deprioritized, leading to budget cuts and project cancellations

2. Inability to demonstrate the business value and financial impact of the CX function:

The struggle to secure funding for the CX program because it can only show improvements in customer satisfaction scores, but not the revenue or cost impact of those improvements

3. Inconsistent development of business cases for CX projects:

CX team often initiates projects based on gut instinct rather than data-driven business cases, resulting in wasted resources on low-impact initiatives

4. Lack of rigorous prioritization processes incorporating ROI, feasibility, and risk:

CX projects are prioritized solely based on expected customer impact, without considering feasibility or financial return, leading to delays and cost overruns on complex initiatives

5. Inadequate measurement of the CX function's value across key categories:

CX team focused only on tracking operational metrics like project throughput, failing to demonstrate their impact on the company's revenue, costs, or organizational readiness for CX

So, what proves success then?

Tracking and proving success should be done by tracking at three levels, which I call primary, secondary and tertiary. I hope CX professionals will not be surprised at my approach to group CX perception metrics as tertiary. According to Forrester, it is important to track the CX function's success across four key categories:

Organizational Success

Demonstrate how the CX function contributes to the organization's success through metrics related to revenue, cost savings, and resilience. Sample metrics include revenue impact, cost impact, risk reduction, and time-to-market for CX-supported projects

Stakeholder Engagement

Measure how internal stakeholders perceive and interact with the CX function. Metrics cover awareness, loyalty, alignment, reach, experience, and confidence in the CX function

CX Readiness and Culture Change

Assess the CX function's capabilities and its impact on building a customer-centric culture. Metrics track CX skills proficiency, leadership awareness, employee training, and utilization of CX skills

Operational Efficiency

Evaluate the efficiency of the CX function's operations. Metrics include expenses, speed of project completion, and productivity (e.g., number of projects supported)

The argument for primary, secondary and tertiary metrics

My point of departure is that the most important impact for the CX program is the direct contribution to business financial growth. This is the primary metrics group to track, sway or maintain executive belief in CX

Secondary and tertiary metrics groups are somewhat aligned to "leading" and "lagging" indicators where leading CX program metrics focus on controllable elements like strategic execution and operational adoption, while lagging metrics reflect uncontrollable outcomes like customer satisfaction and other CX perception outcomes

So, we are intentionally deprioritizing the CX outcomes here, because that can only be measured by looking backward. Primary metrics are what we ultimately need to impact and achieve, whilst the secondary, leading indicators keep us on track in the execution of our strategic plan, which will result in the primary and tertiary targets being achieved. This assumes an accurate Business Case has been drafted

Summary of Forrester's metrics framework

Forrester promotes "Four Impact Categories" for CX leaders to demonstrate their team's value:

1. Organizational success (revenue, cost, resilience impact)
2. Stakeholder engagement (awareness, alignment, experience)
3. CX readiness and culture change (skills proficiency, leadership awareness, employee training)
4. Operational efficiency (expenses, speed, productivity)

Organizational Success

This category measures how the CX function directly contributes to the overall success of the organization through metrics related to:

• Revenue impact of CX-supported projects (e.g. faster time to market, increased retention)
• Cost impact of CX initiatives (e.g. lower costs to serve, acquire customers)
• Resilience impact (e.g. mitigating risks, improving CX quality, brand preference)

Stakeholder Engagement

This tracks how internal stakeholders perceive and interact with the CX function, including metrics on:

• Awareness and loyalty (e.g. stakeholder requests to work with CX)
• Alignment and reach (e.g. number of functions / departments engaged, depth of engagement)
• Experience and confidence in the CX function's competence and reliability

CX Readiness and Culture Change

This evaluates the CX function's capabilities and its impact on building a customer-centric culture, through metrics like:

• CX skills proficiency within the CX team
• Leadership awareness of CX importance
• Employee CX training, skills utilization, and awareness of how they contribute to CX

Operational Efficiency

This category demonstrates how efficiently the CX function operates by tracking:

• Expenses for personnel, technology, research etc.
• Speed of completing CX projects / initiatives
• Productivity metrics like the number of projects supported, listening posts managed, and training delivered

Conclusion

In my view, the CX discipline needs to transform away from the self-important CX perception outcome metrics and move into showing organizational value through demonstrating direct growth impact. What the CX team does, is tertiary, considering the importance of maintaining executive trust and funding

#CX #CustomerExperience #ExperienceManagement #Growth #Revenue #Profit #Impact #Customer #Value #Metrics