Research shows the true value of CX, so why is it ignored?

Despite research after research study showing that Customer Experience (CX) can drive revenue growth and market value for organisations, organisation leaders still just see CX as a cost cutting problem.

In 2024, Contact Babel approached UK CX decision makers and asked them what the main aim of their CX initiatives were – the top two aims were ‘customer retention’ and ‘lower customer service costs’. This narrow mindset shows the fundamental lack of belief and ambition in CX’s potential to drive growth. 

The obsession with cost cutting

So, what’s behind this fixation on minimising loss and reducing costs?  Many reasons I’m sure but I believe at the core is the lack of faith in the power of CX to drive attraction, retention and referral. The new zeitgeist is all about digital and data, but this has sold us the false narrative that we can measure every aspect of what influences customers. 

However, in reality what we can measure tends to drive a short-term mindset, leading brands to prioritise tactical cost-cutting interventions while neglecting longer-term CX strategies that sustain growth.

Organisations that get it grow

The organisations that get it, that have ambition, that build interventions to make customers feel good about their experience are growing. One great example is Octopus Energy in the UK. Energy is a commodity sector, common sense says competition is dominated purely by price, this should make it a tough market to launch and grow a new brand.

So, in a market that is so price conscious, why is Octopus ‘wasting’ time on:

• Making switching super-fast and effortless vs competition
• Creating niche propositions such as EV owner tariffs
• Running energy saving nights, where you are invited to lower your average energy consumption for a small reward
• Being super proactive on suggesting tariffs that customers should switch to.

These actions are not customer experiences that are going to cut costs, and they are not even actions that will obviously drive revenue. However, they are actions that show Octopus is proactively trying to help customers to be smart about their energy use. The result is a customer experience that stands out, that feels like for once an energy company is on your side and doing good work. The numbers back this up, Octopus has an NPS score that is 39% above the industry average – a strong sign that they are doing something right.

For the C-suite, here’s what really matters. Octopus was founded in 2015, it competes in a commodity sector that heavily favours the incumbents, yet Octopus outperformed the legacy brands to become the largest electricity provider in the UK in 2024. In anyone’s book that is a phenomenal measure of achievement.

So, our message to organisation leaders is stop asking how much CX can cut costs and start asking how much it can drive your growth.