In an era when customer expectations continually escalate, a hidden threat lurks in the shadows, quietly chipping away at your bottom line: CX debt. Much like its more notorious cousin, technical debt, CX debt accumulates when you overlook gaps in customer experience or postpone addressing them. It’s a problem that can be hard to pin down.
CX debt is growing, but it’s a concern that often flies under the radar. Stellar Elements’ recent report found that while 81% of business leaders said they believed they were meeting customer expectations, only 22% of customers said they felt the same way. Clearly, there’s a big difference between the experience customers crave and the experience they actually receive.
CX debt isn’t just another buzzword; it’s a wake-up call. This debt is a continued financial toll accumulating from unresolved CX gaps in an organization.
We’re not just talking about a problem to be solved but a pivotal opportunity to redefine how you connect with your customers and keep business moving forward. That begins by digging into how every part of your business works, from the teams that talk to customers daily to those that don’t.
What drives CX debt?
Many organizations lack a clear grasp of what their customers really need and expect, leading to misaligned CX efforts. But is this silent disruptor messing with customer happiness and loyalty? It doesn’t just pop out of nowhere. We can trace its roots back to several gaps that, if left unchecked, can impede a company’s ability to engage its customers effectively.
As Nick Vrana, Stellar Elements' global director of AI platforms, puts it: “CX debt is a lot like technical debt. CX changes—and customer understanding changes along with it. New products and features can cause exponential growth in product or service capabilities for consumers, but systems often can’t keep up. Instead, they end up constraining the available ways in which we can respond to customers’ changing needs.”
“Companies often fall into the trap of constant experimentation, trying out new ways that might work versus trying to solve the problem strategically. This largely comes down to how siloed an organization is. Where some areas might perform well, it all falls apart once a customer goes through different channels,” said Bob Skubic, design principal at Stellar Elements. Inevitably, without a clear view of customer journeys and touch points, the result is a fragmented and ineffective customer experience.
Unsurprisingly, technology also has a huge effect—and making the wrong decisions can quickly raise your CX debt. “A lot of what I’ve seen is that organizations choose and implement technology to make internal processes more efficient, but rarely is it the customer whose job we’re trying to make easier. Then they start finding workarounds, adding on more technology to help, but that only creates more complexity, further adding to CX debt,” Skubic said. “I think the MVP (minimum viable product) approach is also partly to blame, as it often results in us overlooking the fact that viable also needs to intersect with desirable.”
What are the risks of letting CX debt build up?
Ignoring CX debt is like letting interest build up on an unpaid loan; the longer it’s neglected, the more severe the consequences. The risks of allowing CX debt to build up extend far beyond customer dissatisfaction as well—to the point that it can affect an organization’s operational efficiency, employee morale and even its long-term viability.
“We saw this back in the day when internet usage became increasingly widespread. You’d start off with a clear solution that worked fine but, as you scaled, more and more was added. So what was simple became way more complicated. The same is true today, with each silo in an organization needing its point of view heard, but none of it is in sync with the customer’s point of view …
… That puts the onus on the customer, who just wants their problem solved. Minor inconveniences escalate, creating a labyrinthine customer journey that causes frustration and creates larger and larger gaps between the company’s goals and what its customers want,” Skubic said.
The effect of CX debt isn’t just limited to external perceptions; it affects those of internal stakeholders as well. As employees become aware of the disconnect between the service they’re providing and the service customers expect, there’s every chance they’ll feel demoralized. Skubic noted, “You can only deliver the experience your company culture will allow. So if your culture isn’t customer-centric, it not only negatively impacts the customer; it also leads to inauthentic interactions that customers can easily detect.”
Skubic emphasized how CX debt trapped companies in a cycle of constant firefighting, focusing on immediate issues at the expense of innovation.
This reactive approach, and a lack of strategic customer understanding, scatters efforts and stifles creativity. True innovation demands a deep, shared insight into customer needs—a goal often undermined by reliance on assumptions rather than genuine customer insights.
How much CX debt do you really have?
Coming to grips with your CX debt isn’t just about crunching numbers and tracking metrics like lifetime value and churn rate. While they’re undeniably important, it’s also about tuning in to the voice of your customers with continuous feedback and uncovering insights that lead to real, effective change.
Companies must also take a deep dive into their CX with a comprehensive audit. With a keen eye on the best parts of your customer journey, you can start building a plan to reduce that CX debt. What it all comes down to, however, is embracing a customer-first mindset, where every tweak, every change and every innovation should light a path to deeper customer connections and lasting loyalty.
