We’re well into 2021 now, but customer experience professionals and marketers still feel the remnants of one of the most challenging years for brands in terms of delivering digital customer experiences to customers and prospects.
The CMSWire State of the Digital Customer Experience 2021 report covered these challenges, which included organizational and data silos, rigid bureaucracies, immature infrastructure, scarce resources, outdated thinking, immature measurement and difficulties in understanding customers. These were just some of the common and persistent hurdles, according to the report’s executive summary by Brice Dunwoodie, CEO and founder of Simpler Media Group, which publishes CX Decoded and CMSWire.com.
The lessons from COVID-19 and 2020 were many. And CX and marketing professionals are taking those lessons into the early months of 2021 and applying them to their practice of technology implementations and execution, CX skills development and with the balance between customer retention and acquisition.
What’s working? What will be the 2021 CX playbook?
Hosts Rich Hein, head of content for Simpler Media Group and CMSWire, and his colleague, Sarah Kimmel, VP of research at Simpler Media Group, dive into these findings during this CX Decoded podcast by CMSWire. They are joined here by special guest Annette Franz, CCXP, founder and CEO of CX Journey, Inc. The podcast was recorded in December of 2020.
Note: This transcript has been edited for space and clarity.
Rich Hein: Hello, everyone. I am Rich Hein, head of content for CMSWire and Simpler Media Group. With me today I have my co-host, Sarah Kimmel, vice president of research for CMSWire and Simpler Media Group, and Annette Franz, CCXP, founder and CEO of CX Journey, Inc., who has 30 years of experience working in the world of customer experience.
We’ll be discussing today the findings of the CMSWire State of the Digital Customer Experience 2021 report and how the world of CX has been affected by the COVID-19 pandemic.
So the first question I'd like to hear from you, Sarah, is how did organizations and CX professionals respond to the pandemic?
Sarah Kimmel: We had more than 400 respondents, and in a very broad sense, they said that they've increased their digital customer engagement as face-to-face customer interactions were curtailed versus suspended. They had to meet customers in digital spaces wherever they could. So they replaced in-person events and interactions with digital, and there's been a broad movement from physical retail to ecommerce. Many respondents have scaled up digital engagement through content channels, new products and services, but the response to the pandemic has also been dependent on the customer experience and maturity level of the organizations.
One of the questions on our survey asked respondents how they rate the general effectiveness of their CX platforms and tools. When we dig into the data, what we see is that this creates a rough maturity model for the DCX space. Only 11% say their tools are working well. 47% say they're satisfactory, and 43% say they need work.
That first group, the smallest and only 11% that say their tools are working well, they're more likely to be larger organizations, more likely to say that delivering digital experiences are extremely or very important to their organization. They're roughly twice as likely to use some of the more advanced tools or processes like marketing automation software and Digital Asset Management (DAM) and Customer Data Platforms (CDP), and they're nearly twice as likely to be prioritizing digital experience, AI and machine learning capabilities and customer communities.
Rich Hein: So, Annette, what kind of impacts are you seeing on CX budgets? With the increased use of digital channels, it seems like the need for good customer data is more important now than ever. Are organizations investing more in these tools?
Annette Franz: Absolutely. And as for 2021, I think the investments are going to be strong. I don't know that they'll be as strong as they were maybe in 2019, but they are still going to be strong, and I think people want to jump into 2021 and make it a different kind of year.
But they have to because really survival is going to be the key word for the year for many companies. I think what's going to happen is companies are going to really be working hard to bring new customers in. Keep the customers that they have through personalization and through meeting other key customer expectations. And I think they're also going to work to automate and optimize their workflows, and I think the key here is — and you just mentioned it — is data. They've got so much data, and they've got to use it, and they've got to use it wisely.
We talk about technology. But technology is just one piece of the experience. Technology is really the tool that facilitates and supports and helps to deliver the experience, but the experience really is also a lot about the human on the other end of the line. I think one of the things that we learned in 2020 was the importance of that data and customer insights and how to use those to our advantage.
Once the pandemic hit, customer experience professionals were being laid off. I had several friends who lost their jobs and then very quickly, they got picked up by somebody else because there was this huge realization that we need to know our customers, we need data, we need insights and we need to get those data and insights to the people in your organization who are going to use them and use them for the right reasons.
Rich Hein: You mentioned a little bit about organizations and their objectives. I wrote an article earlier this year on the challenges of personalization. And one of the things that came up in the article was that organizations throughout the pandemic had to shift from customer acquisition to more retention-focused efforts. Is that something that you saw in what you do?
Annette Franz: Absolutely right. This is a customer experience professional’s dream because there often tends to be sort of this imbalance of focus on acquisition and not so much on retention. It's just way out of balance. We see businesses doing whatever it takes to bring customers in the door with freebies, promotions, whatever it is.
I always say if you focus on doing the things that you need to do to acquire customers you're doing things differently than if you were focused on retention. And in 2020, I think customers were really focused on staying loyal to the brands that they knew and had always been loyal to. They were also very loyal to the brand that took care of their employees and put safety and health first. And so I think 2021’s focus is going to return to acquisition, but this past year, it was just stop the bleeding. Keep the customers that we have.
Rich Hein: Can you tell me a little bit about how you think organizations should go about optimizing their marketing costs? I mean I know that most organizations are doing some sort of marketing analysis to see where their technology money is being spent.
Annette Franz: I think that's going to be really key because there's a lot of new technology, there's a lot of new tools, new interfaces, new complexities. There's a couple of things that have to happen.
First of all, I think they've got to continue to streamline customer engagement efforts through better use of data, and that will build the business case. It’ll show that this was the right investment to make because here's our return on that. They've got so much data, and they've got to benefit from all of that data by reaching out to customers in a more efficient way. They've got to automate and tailor those messages based on customer's needs and also gain insights about their customers. They're going to obviously have to show that they've optimized their expenditures there.
Because there are all these new tools and technologies and interfaces, I think that skills and training are really going to be critical. You can't just bring all of this new technology in and expect that it's going to be used properly and optimized without knowing what it is and knowing how to use it. I think there's going to be new focus on workshops and training programs and webinars to get their people up to speed, in terms of how to use all of this new technology.