“Firms will continue to regard CX as a collection of continuous improvement projects until they see an irrefutable, directly attributable connection to returns.” – Forrester, Hardwire Customer Experience 2018
This is the challenge that every CX leader needs to overcome. In order to prove their value to the company, secure the budget and buy-in they need to make changes, CX leaders must demonstrate an “irrefutable” connection to business metrics. This requires a massive sea change in the metrics and strategy the profession is currently using to measure their success.
But the good news is, as Tom Mouhsain says in the Forrester report cited above, “there is sufficient auditable evidence to link CX to all of the major financial performance drivers that determine profit — and ultimately to the return on shareholder equity.”
It’s a big challenge, but with the right strategy, and the right data collection abilities, it’s no longer insurmountable. CX can be tied to the financial goals of your business.NPS can’t be your North Star
Traditional CX metrics like customer satisfaction, customer effort and NPS are not directly tied to making money moves. While these metrics can help CX and marketing teams tell descriptive stories about the state of the customer’s experience, they aren’t credible when it comes to making business decisions.
NPS was always meant to be a proxy for true customer loyalty, because we didn’t have the means to measure it before. But we’ve gotten into the habit of continually trying to improve NPS without actually asking why. Does it actually move the needle? At what point does increasing NPS have decreasing returns?
Instead of simply continuing to improve NPS, CX pros need to expand their dashboard to include financially meaningful metrics that speak directly to their impact on the balance sheet and P&L. When that happens, CX teams will be keen to talk finances, while the CFO becomes an advocate for CX due to the financial success they are driving.