Customer Experience Comes Under Fire

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Let’s face it: 2018 was not a fabulous year for customer experience. On average, CX quality was flat, with Customer Experience Index (CX Index™) scores showing little movement for the third year in a row. And what little movement that did happen was toward the middle of our scale, where 62% of brands bunched up in an undifferentiated clump.

We’re pretty sure we know what’s causing this problem. First, CX management — the driving force behind improved CX quality — remained at a relatively low level across the board. Brands just aren’t doing what they need to do in order to make big gains. If their CX programs were home improvement projects, we’d say they were decorating, not renovating.

Meanwhile, customer expectations have been rising slowly but steadily. In the current favorable economy, it’s likely that this movement will continue, pressuring firms to improve CX just to keep from falling back even further. It’s like what the Red Queen said in Through the Looking-Glass: “. . . it takes all the running you can do, to keep in the same place.”

. . . which brings us to a 2019 in which the struggle will be real for CX professionals. Here are three key takeaways from our 2019 CX predictions:

1. Stagnating CX quality will cause short, destructive price wars. Up to 20% of companies will throw in the towel and give up trying to differentiate on the basis of CX. Instead, they will just try to not get worse and resort to price cuts to grow. Fidelity, with its three years of languishing CX quality, fired the first shot in financial services in August when it announced two zero-fee investment funds. Vanguard, which saw a slight dip in CX quality in 2018, responded by highlighting that it has many funds without transaction fees and hinting at more fee cuts. Companies that engage in price wars may reap short-term gains as they race to the bottom. When these firms have cut prices as much as possible, however, they’ll find that they’re still locked in long-term competition for CX-fueled customer loyalty — and that price cuts have distracted them from vital CX efforts and bled away the resources they need to improve.

2. Efforts to make the business case for CX transformation will surge. CX transformations are massive, take years, and cost millions. CEOs of companies already several years down the road of a CX transformation increasingly come under pressure from shareholders pursuing short-term dividends over long-term growth prospects. This means that CX pros must put more sophisticated CX business plans in front of their leadership if they expect to continue to receive meaningful support in 2019. Successful case studies from companies such as USAA, Citibank, and IBM will provide supporting evidence. Better ROI models, and more mature measurement and prioritization methodologies, will circulate as well to help CX pros build more compelling business cases for continued customer experience investment. For those who fail to make the critical connection to business outcomes, though, the risk of the CEO pivoting away from CX this year is very real.

3. In the hot jobs market, CX pros will flee frustrating gigs for more opportunity. As companies increase their focus on CX, they’re establishing and expanding their CX teams. More jobs means that CX professionals will have the luxury to be choosey about where they work. Those currently at firms that aren’t committed to CX — and aren’t funding CX transformations — will seize the opportunity to leave for roles at companies where they can make a much bigger impact. In 2019, companies that want to retain CX talent will make CX a strategic priority at the corporate level and designate adequate budget to fund it. In the same vein, CX pros starting new roles will need to set realistic expectations about the duration and cost of a customer experience transformation. With all the change, companies looking for CX talent will struggle to weed out the qualified CX pros who were stymied by their environments from those who simply underperformed. This will in turn increase the cache of programs in user experience design at schools such as Bentley and Rutgers, as well as in CX certification.

Although we anticipate a bumpy ride in 2019, we expect that customer experience will continue as a major factor in how companies do business. When the dust settles, look for top-performing brands to put some additional space between themselves and their closest competitors, fueled by more sophisticated business cases and an influx of CX talent from companies that lost focus.

Download Forrester’s predictions 2019 complimentary guide to understand the 14 major dynamics that will impact firms next year.

This post originally appeared here.

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