With the hype building around customer experience, CX is set to push programmatic off its buzzword perch, a place previously occupied by Big Data. We look at all the fuss and explain why you should you care.
CX is a mega-trend driving organisational transformation at the highest level. That’s according to Dr Catriona Wallace, CEO of customer experience (CX) consultancy Fifth Quadrant.
For those in the business of watching marketing trends, the rhetoric sounds eerily familiar. We’ve heard similar rumblings before, particularly around big data. It was described as the “management revolution” and commentary from those in-the-know touted its ability to drive organisational transformation. Then came programmatic – heralded as both saint and Satan within the advertising and media business, the buzz helped to boost the burgeoning sector, although many marketers are still trying to get their head around what it means for them.
So is CX simply the next headline-grabbing trend serial LinkedIn posters and marketing experts are jumping on? Or is this something you genuinely need to sit up and take notice of?
A survey conducted by Fifth Quadrant strongly suggests the latter. The organisation found Australian consumers are prepared to pay 14% more for good, consistent customer experience, and nine in 10 will switch to a competing brand because of a poor experience.
In addition, a 2013 Forrester report suggests CX is a more powerful driver of customer loyalty than price-value perception, accounting for 55.1% of loyalty for banks and 46.5% for retailers.
This tells us two things: firstly, you need to care about CX because your customers certainly do. And two, if you’re not thinking about it, you’re leaving a door open for your competitors who likely will. Given a loyal customer is worth up to 10 times as much as their first purchase, wouldn’t you rather keep them around than let your rivals have at it?
But the problem goes deeper than retaining existing spenders. CX covers every touch point from returning customers to those illusive first timers. Given a 2011 American Express survey found 78% of consumers have bailed on a transaction or intended purchase because of a poor service experience, you want to make sure every customer, potential or otherwise, is having a seamless experience.
More than just another buzzword
The message is clear. CX is more than a buzzword. As much as this business loves buzzwords, CX actually matters. Still, looking beyond the hype to get a clear understanding of what it takes to implement a CX plan, and how it is affecting your organisation, can pose a challenge.
Research conducted by Salmat found only one in five companies has a CX strategy with 22% of respondents boasting a well-structured plan. A further 31% are brave enough to admit there’s a plan, but it doesn’t really get followed. Thirteen per cent don’t have a strategy at all. And for those who have one, only 38% believe it fully addresses the customer lifecycle.
Before you even get to developing a CX plan, though, there’s another vitally important step your organisation needs to take. It needs to make a commitment.
“Customer experience is not a project or program,” Stanford Swinton, Bain and Company manager, said earlier this year. “It’s a new management discipline and way of working that needs to persist in an organisation. So ongoing commitment is very important.”
Putting CX on everyone’s agenda
Those two major trends of recent years – big data and programmatic – came with very different challenges to CX, yet there are similarities. All three require an understanding of technology, a willingness to learn new approaches to the way we do business and the ability to wade through the jargon to get to the heart of the matter. Still the responsibility of big data and programmatic largely falls to the marketing and technology departments of your organisation.
What makes CX stand alone is its all-encompassing nature. The experts agree, in order to make CX a priority, everyone within a company needs to be focused on the customer. Not the money the customer is going to spend but the actual customer. For teams that live and die by sales targets and revenue figures, this is a seismic shift.
Driving digital transformation
A report by the Economist Intelligence Unit and Genesys suggests increased investment in CX by Australian companies in the next three years will accelerate digital transformation with 27% planning to increase their CX investment by more than one quarter, up from 15% three years ago, and 57% planning to up investment by at least 10% in the same period.
While it may feel like we’ve come a long way in the digital transformation revolution, 66% of the nation’s websites weren’t optimised for mobile devices a mere six months ago. CX has the power to change that and so much more.
For marketers trying to figure out how to work with advances such as big data and programmatic – in addition to long established media channels and marketing approaches – CX sets up a framework. By putting the customer at the centre of these processes, it soon becomes clear which channels are right for the brand, how to deal with big data and what programmatic can do. CX ties it all together.
In 1997 Steve Jobs – a man ahead of his time – said: “You have to start with the customer experience and work backwards to the technology.” Obviously he was talking about iPads and Mac computers but the sentiment applies equally to the relationship between marketing technology and the customer journey.
Clearly there’s a way to go to put CX at the top of our agendas but you can rest in the knowledge someone other than industry pundits is loudly championing the cause. Whether they know it or not, the consumer is leading this charge. Because if you don’t get your CX house in order, all signs point to them taking their business – and their big data – elsewhere.
Mark Abay - Content Director, Ashton Media
Mark is Content Director at Ashton Media. It's his job to create interesting and engaging conference programs that stretch the thinking of our attendees. Mark works closely with our industry advisors to ensure the conference content is aligned with the needs and interests of our audiences.