3 Trends That Make CX an Enterprise Cost Center

I chatted with a Customer Experience executive recently about an important crossroads facing her company and her career. I’ll call her Shruti for the purposes of this piece.

Shruti and her boss recognize their customer experience isn’t the market differentiator it can be. Said more directly, they desperately need CX to stop operating as a cost center in 2024, but they’re not sure how to start optimizing it.

“Data black hole” was the phrase Shruti used.

My team and I hear similar things from other mid-market and enterprise organizations, especially this time of year from companies with high ticket volume (as is common in eCommerce, Retail, and SaaS).

I wrote this blog to pinpoint three trends that make CX a cost center today, in the hopes that businesses making heavy investments in CX technology can sidestep them as we all consider our plans for the year ahead.

Trend #1: While CX Resources Are Down, Demands Are Wayyy Up… And CX Leaders Don’t Know What To Do

We all know that the pandemic catapulted buyer expectations and infinitely complicated people managers’ jobs as teams started working from home.

Fast forward a few years to today. Economy-induced budget cuts and reductions in force have made running CX even harder.

Customer support tickets grew 30% in 2022, following 16% growth in 2021. And internal requests of support teams grew 70% the same year (2022).

Resources may be way down, but demands are way, wayyy up.

While there’s no question that finite resources need to be redistributed, this is what Shruti said best. For the average CX executive, CX is a data black hole.

As Forrester research recently found:

60% of executives don’t know what drives current CX performance and can’t prove the business impact of changes.

Enterprise CX leaders who want to keep their jobs need to figure out how to understand which CX investments can be better optimized (and how).

Trend #2: It’s Never Been Easier to Lose Customers

There’s no secret that today’s CX programs don’t work like they should – nor that CX programs are performing worse than they ever have, relative to buyer expectations.

In fact, Forrester’s CX Index plummeted in 2022 for the first time in seven years.

It doesn’t matter if the culprit is systems that weren’t set up right – or simply, that CX systems haven’t evolved with modern requirements. What matters is that they annoy customers to no end, and they are an absolute nightmare for customer support teams to use.

In eCommerce, cart abandonment averages 70%. Customer churn in SaaS and technology are even higher, averaging at 80%.

At the risk of stating the obvious, the TLDR here is that executives who wait to upgrade their CX programs risk their functions becoming irrelevant, outsourced… or worse.

Trend #3: Artificial Intelligence Is Bringing A Tsunami of Change for CX

CS chatbots became table stakes long ago, and for a while, CX boasted about being early adopters of personalization and artificial intelligence.

But few quantum shifts have disrupted CX’s impact and credibility like generative AI. And that will only become more apparent when CX executives appear at the revenue table alongside their peers. Simply said, other executives are far more experienced in creating a strategy and roadmap that incorporate intelligent technology — and then getting insights from their tech stacks that significantly impact the business.

But less than 1 in 5 CX teams have skills to execute strategic priorities, like AI, according to Forrester.

In fact, IBM’s Institute for Business Value spent time interviewing over a thousand executives in the areas of customer experience and customer support and concluded that many “overestimate having a strong foundation for a robust CX/AI program, such as CX governance & clean customer data.” The researchers also shared that they believe many CX leaders mistakenly “assume they can train or hire for skills.”

In short, CX teams need new people, processes, and technology to craft and execute an AI roadmap that scalably delivers business impact.

But Don’t Panic

A lot is changing in CX, especially in retail, eCommerce, and SaaS businesses, and the competition is only getting more intense. In fact:

The number of companies invested in CX have 4X’ed from 20% to 80% since 2020.

But quick thinking and fast-moving leaders have every advantage at their disposal to transform CX into a major competitive differentiator, provided they know how to do things differently. That’s why SaaS companies worth $1B earn $1B more in revenue within three years of investing in CX.

Like Shruti, those who progress their organizations along the CX maturity curve in 2024 will fuel revenue and productivity – and make a name for themselves far beyond their teams and companies.