Key takeaways:

1. Business executives who invest in modern customer experience (CX) capabilities unlock efficient revenue growth.
2. CX leaders are creating a competitive advantage and capturing new revenue by acquiring more customers at lower cost and driving greater retention rates.
3. The maturation of customer technology, customer data, and analytics has enabled CX leaders to reduce churn and drive retention in more predictable and efficient ways.
4. The convergence of marketing and advertising, combined with more advanced targeting data, has enabled CX leaders to acquire more customers at lower costs.
5. Applying CX across the customer lifecycle unifies typically siloed marketing, sales, and service functions for improved efficiency and predictability.

How we define customer experience (and why it matters)

One of the largest challenges in customer experience (CX) is getting alignment on what CX actually is. Ask 10 leaders and you may get six or seven different answers. Some consider customer experience to be a philosophy; others think of it as a framework or a business discipline.

Without a common definition, a string of events tends to happen…

1. CX becomes a buzzword and loses internal credibility or a defined center of gravity.
2. Lacking centralized control, customer-facing teams independently contribute to customer experience, resulting in limited collaboration and a suboptimal, disjointed experience for customers.
3. Due to silos, leaders fail to measure CX and don’t prioritize improving it.

We believe CX is the profit generator—shareholder profit, customer profit, and brand profit—resulting from the cumulative sum of all interactions between a company and its customers over time. CX should be an anchor of a corporate strategy due to its direct correlation to revenue growth and operating margin.

Leaders who invest in CX drive revenue growth in two fundamental ways:

1. Increase new customer acquisition by offering products and services that serve the highest needs of the most relevant customer groups.
2. Reduce churn and boost margins by offering products and services that make customers happy.

The debate regarding CX’s impact on revenue growth is over. Study after study has revealed a direct correlation between investment in the experiences customers have with products and services and the revenue a company acquires. Forrester recently reported a one-point increase in CX driving $1 billion in additional revenue for a mass-market auto manufacturer.  

So why aren’t more companies prioritizing customer experience at the executive level? And what has changed to position CX as the key driver of future growth?

What’s changed and how it impacts enterprise growth

The first generation of customer experience—CX 1.0—was born in, and focused on, the contact center. CX 2.0 connected CX principles to product and design decisions, resulting in websites, apps, and services that were better tailored to meet customer needs. However, up until now, customer disciplines have been inherently siloed, with few leaders achieving true end-to-end excellence.

The convergence of three trends across the customer lifecycle has created the next evolution of the discipline, and a new paradigm in customer experience: CX 3.0. This latest evolution connects the entire funnel and unlocks the ability for all businesses to know customers and prospects at a level once reserved for global CX leaders like Apple, Tesla, and Amazon. Leaders who adopt the CX 3.0 blueprint are uniting functions under a common customer approach and unlocking both new and more efficient revenue growth.

These three trends are shaping the new landscape of CX:

1.  Maturation of customer data, technology, and analytics capabilities

From acquisition through retention, the maturation and consolidation of customer technology, data, and analytics platforms has finally created the opportunity to build fully connected customer experiences. Leaders can now make precise, value-driven decisions, unlocking new growth potential and optimizing customer lifetime value with a seamless, high-impact experience. Product, service, and experience decisions can be automated to unlock the highest potential value from every customer and target the highest-quality prospects at the lowest cost. This is helping business leaders break functional silos, led by data and technology teams, to unite under a common customer framework and goals.

Research shows 76% of customers expect companies to understand their needs and preferences, yet only 34% feel like businesses do so effectively. In short, today’s broken CX funnel is a major barrier to growth. CX 3.0 offers the promise of fixing the disconnect between acquisition and CX, resulting in more relevant, personalized experiences that drive long-term success. 

2. The convergence of marketing and advertising disciplines

As MarTech and AdTech collapse together—sealing the two-decades-old breach between acquisition and retention—acquisition strategies and tactics are now more precise and less bifurcated. This convergence is helping brands take more control of their messaging, driving more tailored and meaningful interactions with prospects.

Most acquisition strategies today rely on paid media campaigns, and companies invest heavily in platforms like Google and Facebook, with global ad spend expected to reach $700 billion for 2024. But these efforts often fail to hit the mark in terms of personalization and relevance, and while targeting capabilities have improved with recent advances in AI and machine learning, many businesses still rely on broad demographic segmentation rather than deeply understanding customer needs and behaviors. This approach leads to high acquisition costs with limited long-term customer value.

The fundamental issue is a failure to align what customers want or need to the various stages of their journeys. Acquisition is treated as a separate function from customer experience, meaning that once a lead converts, the transition to post-acquisition experience is disjointed. This lack of connection results in customers feeling undervalued and disengaged after the initial sale.

This broken CX funnel is a major barrier to growth. By fixing the disconnect between acquisition and CX, with CX 3.0 businesses can create more relevant, personalized experiences that drive long-term success. Aligning acquisition strategies to CX principles is crucial for delivering meaningful, relevant interactions. Companies can create personalized experiences that resonate with customers throughout their journeys, improving conversion rates and boosting customer satisfaction.

Through integrated data, MarTech and AdTech platforms, organizations now have access to a unified view of the customer and can unlock seamless integration of acquisition and experience. Aligning acquisition strategies with CX principles is crucial for delivering meaningful, relevant interactions across all touchpoints. This approach not only improves conversion rates but also boosts customer satisfaction and loyalty. Companies that excel in CX see revenues grow 4% to 8% above their market, demonstrating the tangible business value of creating a unified funnel.

3. Customer data and the voices of the customer as strategic assets

The advancement of voice-of-customer (VOC) capabilities gives leaders the ability to capture consented customer data in secure and compliant ways and use this information to drive relevant experiences. While VOC is not a new concept, the consolidation of technology vendors and the maturation of this offering are enabling more businesses to invest in its potential.  

Connected to VOC are core customer data technologies that enable Customer 360 (C360), for example, customer data platforms (CDP). Research shows companies that leverage CDPs see a 20% higher return on investment from their marketing efforts. Connected data helps build a true view into C360, powering leaders to create personalized, data-driven strategies that deliver long-term revenue growth and operational efficiency.

The business value of CX 3.0

Leaders who invest in capabilities driven by CX 3.0 trends are realizing growth benefits in two specific ways.

Growth lever 1: Increased retention

The maturation of customer technology, customer data, and analytics has enabled CX leaders to reduce churn and drive retention in more predictable and efficient ways. For example, we partnered with TV New Zealand (TVNZ) to help build a novel solution using “data clean room” technology to leverage first-party data for personalized ad targeting while maintaining viewer privacy. TVNZ expanded the list of potential customers from thousands to hundreds of thousands, unlocking potential buyers with surgical precision. The solution boosted return on ad spend (ROAS) up to 10x and more than 10 of TVNZ’s brand advertisers signed up for the pilot as soon as the program launched.

Another example is Virgin Voyages, for whom we helped reshape the typical chatbot experience and set a new standard for online customer experience through its launch of Vivi. Built on Salesforce, Vivi alleviated management costs and reduced call center escalations by more than 20%.

Growth lever 2: Increased efficiency and volume of customer acquisition

CX 3.0 has been demonstrated to help CX leaders acquire more customers at a lower cost than that of competitors. We recently partnered with LEGO to help increase connection with customers who are ready to buy. We helped them identify their most valuable customers—those spending 3x more than the average buyer—creating detailed customer profiles that allowed them to target potential buyers with similar shopping habits.

We also recently worked with a large, US-based telecommunications company to rethink how it acquires customers. The organization turned to Amazon Marketing Cloud—a powerful media clean room launched by Amazon Ads. By leveraging a combination of first-party CRM data combined with signals from Amazon Ads, the company was able to provide highly personalized offers to prospects who weren’t subscribed to their services, leading to a 40% reduction in cost per action and 9% improvement in ROAS.

Transforming your approach to growth

Too many organizations continue to grapple with a critical flaw in their operations: a disconnected CX funnel. There’s often misalignment between acquisition efforts and CX initiatives, creating friction that hampers long-term customer engagement and retention. Businesses must bridge this gap by integrating acquisition, CX strategies, and analytics to provide seamless, personalized customer journeys.

For companies that are ready to commit, CX 3.0 is transforming the growth playbook. Those who invest in this discipline are breaking down organizational silos and linking acquisition efforts with ongoing engagement to meet customer needs. This powerful integration replaces fragmented, disjointed experiences with cohesive journeys, driving increased loyalty, higher conversion rates, and enhanced customer lifetime value.

CX 3.0 isn’t just a new trend—it’s a strategic imperative. Companies that embrace this data-driven, customer-centered approach will engage customers in ways that build lasting relationships and deliver value at every stage. Through a unified view of each customer, brands can use actionable insights to refine targeting, reduce acquisition costs, and improve retention by anticipating needs and reducing friction. Leaders who recognize the potential of CX 3.0 will build stronger connections with their customers, set themselves apart in their markets, and unlock new revenue streams.