Business and marketing experts agree that companies need to continue to invest in customer experience to improve business results. Failing to invest will leave companies behind. In fact, research shows that customer experience investments are indeed increasing. Small and mid-sized businesses were expected to have 34% more to spend on customer experience technology this year, according to a ZenDesk study.
Each year we've seen the martech landscape expand. There are thousands of platforms and services out there to service an organization's needs. So where are organizations spending their money and resources?
Customer Experience Priorities Disconnect
“Looking from the outside in to figure out what organizations are spending to improve CX seems like a straightforward task but it’s not. You would think that today’s spending patterns would be a mirror image of what executives’ priorities are, but they’re not,” said Jeb Dasteel, founder of Dasteel Consulting.
Dasteel pointed out that in a recent survey from the Customer Strategy Alliance, the biggest CX investments are on programs that drive product adoption, the development of loyal customers into brand advocates, and process simplification to remove friction. The least amount of investment is on journey mapping, customer engagement programs, and value realization. Putting aside that all these things are important, there is more to this story.
“When you compare those survey results with the direct input I got a couple of weeks ago from a small but very knowledgeable group of chief customer officers, a more nuanced story emerges, Dasteel said. “The CCOs told me that their top priority is the very thing that the survey identifies as the lowest priority. There’s a bit of a lag between what executives identify as their strategic priorities and when the resulting spending kicks in. I also believe there is a shift in strategic priorities underway, with today’s most effective chief customer officers playing the long game.”
Programs deployed by top CCOs are truly purpose-driven based on how they build the customer strategy foundation for enduring success, according to Dastel. Each step builds on the prior steps:
- Aligning and reconciling with customer strategies, goals, and processes
- Continuously improving the understanding of our customers’ business and desired outcomes
- Assuring customer success utilizing products and deriving desired outcomes
- Applying customer successes to marketing, advertising, and sales
- Creating and sustaining differentiated customer engagement
Related Article: Can Your Website Still Be the Backbone of Your Digital Experience?
COVID's Lasting Impact on Customer Experience Spending
In the wake of COVID-altered customer behavior, organizations have placed a new priority upon CX budgets, according to Gregory Ng, CEO of Brooks Bell. After months of detouring shopping behaviors, consumers are beginning to settle into a new sense of normalcy. However, this "new normal" begs companies to place a heightened understanding upon the importance of CX and meeting customers where they are.
According to a Brooks Bell study, 73% of consumers tried new shopping methods during the pandemic. This emerging reliance upon ecommerce has pushed companies to focus their CX spending towards optimizing the digital customer experience, Ng said. “As more consumers flock to brands that deliver tailor-made experiences, business leaders are looking to their marketing, analytics and product teams to solve the puzzle of designing a personalization strategy that drives conversions and lifts KPIs. We see brands like Starbucks, Nike, the Gap, and Dick’s Sporting Goods doing this through continual use of experimentation to better understand their customers.”
In addition to e-commerce related technologies to support CX, other companies found that technologies to ensure customer and employee safety also positively impacted CX and profits during the height of the pandemic, according to an Accenture report.
“Best Buy knew it was imperative to deliver a safe experience for customers and employees. In the very early days of the pandemic the company implemented a wide array of safety procedures and quickly transitioned to contactless curbside pickup, which was scaled to all US stores within just 48 hours,” the report said. “It also introduced virtual consultations and the ability to schedule in-store consultations, enhanced customer experiences that will remain long after the pandemic is over. All these safety-oriented changes have led more than 97% of customers in a recent survey to say they felt safe shopping at Best Buy,” according to the Accenture report.
The electronics retailer also understood that you can’t be customer obsessed if you’re not employee obsessed, too. That’s why the company has continued to invest in its people throughout the pandemic, taking steps to ensure their safety while enhancing pay and evolving its benefits, the report added. “Becoming a business of experience has enabled Best Buy to be agile in the face of enormous challenges. It has been able to pivot its operation during the pandemic with its employees’ backing and well-being in mind, which has, in turn, created unforgettable experiences for customers.”
Yet Best Buy was the exception rather than the rule among companies, according to Baiju Shah, chief strategy officer for Accenture Interactive. “After the pandemic started, CX dropped down the priority list — by 33% — among CEOs in our latest study.”
Improved Data Collection, Analysis
According to McKinsey & Co. research, leading companies are investing in CX technologies that enable them to collect and analyze customer data across all channels. The predictive insights enable these companies to identify CX issues and opportunities in real time.
As a result, these organizations better understand CX issues, and can quickly pre-empt some before they escalate, such as an insurance company proactively reaching out to a customer when he or she is having trouble with a claim or another issue, or offering a passenger some type of compensation when a flight is delayed.
Among the foundational technologies companies need for such capabilities, according to McKinsey, are:
- A customer-level data lake to gather and aggregate data on individual customers.
- An analytics engine that uses machine-learning algorithms to understand and track what influences customer behavior and offer predictive customer scores.
- An action and insight engine that uses an API layer to drive recommendation engines for customer service agents so they know how to best respond in customer interactions.