Where to Sink CX Technology Investments for 2016

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By 2020, customer experience is expected to surpass price as the prime competitive differentiator, according to industry research. But which technologies should companies invest in next year to get the biggest bang for their buck?
Customer Experience

Brands across industries agree that customer experience now stands as the key competitive differentiator throughout today's cutthroat market. As organizational leaders prepare their budgets for 2016, many believe CX technology investments will provide them with opportunities to meet and even exceed consumer expectations.

"The fundamentals have not changed in centuries," says Sheryl Kingstone, director at Yankee Group. "It's essential to establish a culture of putting customers first. Leaders must provide direction on how to look through the eyes of the customer and provide a consistent, transparent, and dynamic relationship across the customer journey."

Organizations are investing in CX technologies at a rapid pace, says Brian Koma, vice president and customer experience practice leader, customer analytics for Verint Enterprise Intelligence Solutions. Companies around the globe are making these investments because the arc of customer expectations continues to rise. A failure to invest in CX technologies is no longer an option for brands that want to be around in the next five years.

"Whether it's to create a new program or to enhance one they already have, technology investments in these areas will crowd out budget for other items," says Koma. "These are no longer tactical 'nice-to-haves', but rather critical strategic weapons in the epic battle to win the hearts and minds of customers for the long-term."

But, as with all new ventures, these initiatives won't come without challenges. Organizations will have to come to terms with the fact that CX success requires increased collaboration between IT and marketing. Marketers and their IT counterparts will need to co-own customer experience strategy, as the external customer must be the primary focus. IT will need to reconfigure its traditional focus on delivering internal value to align with marketing's external customer emphasis. Such a partnership will allow companies to establish customer-facing systems that proactively respond to consumer needs at specific touchpoints to create compelling, customized brand experiences.

"Companies typically don't align with customers' needs or their decision journey," emphasizes Wilson Raj, global director of customer intelligence at SAS. "To deliver unified customer experiences, companies must embark on an omnichannel effort that's organized by the customer, not internal structure," says Raj. This requires a shift from a channel-based view to a customer lifecycle-based organizational model, which implies change in how companies approach data, the role of analytics, and the operational processes that orchestrate every engagement.

Ultimately, organizations will need to mobilize the entire company around the customer decision journey, adopt advanced analytics, and prioritize long-term customer value in order to achieve this cohesive foundation, says Raj.

Nevertheless, despite this inevitable internal realignment, many leaders will be investing in foundational technologies that will lay the groundwork for this transition, while also enabling their organizations to streamline customer experience and beat the competition along the way.

Embrace Advanced Data Management Tools to Achieve Omnichannel Success

While Big Data concerns certainly aren't new, companies understand that they must get such matters in check sooner rather than later if they hope to better understand and respond to customer needs and preferences. Raj notes that data management technologies-which encompass data quality, data integration, and real-time deployment-can transform and complete the customer picture by combining and interpreting data from different sources. These tools also support data privacy and secure data usage policies, thereby strengthening customer trust. Companies that have yet to adopt such technologies should increase their investments for integrating data management tools to promote multiple stakeholder ownership and to enable a consistent, coordinated understanding of customers and their interactions across numerous channels and touchpoints.

Meanwhile, investments in data technologies should also factor in the use of the Internet of Things (IoT), as consumers now expect their connected devices to proactively report problems, predict part failure, and automatically provide the details that will enable rapid and convenient service to minimize downtime, explains Johann Wrede, global senior director of SAP Customer Engagement. By collecting consumer data from an array of channels, companies will likely have already made preliminary investments in the technologies needed to gather this real-time information.

Customer data now flows into an organization from a variety of channels, ultimately providing companies with vital information that can then be applied to every area of the customer experience. Historically, however, brands have struggled to parse and analyze this data. As such, any investments in data technologies should anticipate future use considerations.

Adopt Predictive Analytics to Support Real-Time Decisions and Personalization

Once organizations have embraced data management technologies, predictive analytics can follow suit, as the ability to obtain a deeper understanding of customer behaviors and interests will fuel brands' capacity to drive real-time targeting and personalization.

Still, most organizations claim to put customers first, yet few have a solid plan of action in place, notes Kingstone.

Typically, customer engagement occurs in four stages: acquisition, conversion, retention, and growth. Therefore, to compete effectively, companies must accurately identify and track customers across the buying journey in order to deliver personalized experiences with each interaction.

Natalia Piaggio, business development director at NICE Systems, explains that real-time personalization can be used to provide marketing messages that are contextual and relevant across communication channels.

For example, a financial services company may be able to spot that a given customer has been researching different mortgage or loan options via the Web or a mobile application for several days prior to reaching out to an advisor. By connecting disparate data streams from across the various touchpoints she used and by applying predictive analytics in real-time, the advisor can prepare the appropriate information to make the interaction as relevant and efficient as possible. Meanwhile, a healthcare provider can use analytics tools across voice, chat, web, social media, and other touchpoints to decipher what's causing poor customer experiences and then use predictive analytics to proactively engage customers via their preferred channel to prevent or resolve issues quickly.

Wrede emphasizes that it's beneficial for organizational leaders to invest in analytics, since customers have become highly skilled at blocking out "marketing noise" such as irrelevant offers and impersonal communications. Contextual marketing tools such as these can allow brands to deliver personalized experiences that meet customer needs and provide valuable information. In turn, this can strengthen how the brand is perceived and the effectiveness of messaging and offers.

Implement Scalable Solutions That Nurture Change

For many companies, the use of legacy systems continue to pose major problems, as many of these systems are obsolete and difficult to work with, often leading to siloed data and integration issues down the line. Koma points out that legacy systems can be both a blessing and a curse. While they contain critical historical information that is vital for customer experience programs, these systems may also contain out-of-date customer information and can be very inflexible.

Wrede points out that legacy systems weren't designed with the modern customer journey in mind. Instead, they were created at a time when marketing and sales were able to exert more control over the customer conversation. However, now that customers are dictating the discussion across a variety of digital touchpoints, decision-makers will need to evaluate scalable, more agile technologies that can better support their engagement strategies.

While most companies can't afford an enterprise-wide overhaul, there are certainly opportunities to invest in software that allow them to scale their services as necessary with speed and efficiency. Scott Draeger, vice president of GMC Software Technology, explains that vendors are constantly racing to bring new and powerful technology to market, but clients historically have declined to spend money on expensive upgrades. But now, by allowing organizations to add new features more rapidly via the cloud without the lengthy project planning cycles, these types of solutions can enable laggards to catch up to both their consumer base and the competition.

Investing in CX technologies can enable brands to put the customer experience at the core of their customer strategy. The right mix of tools can allow companies to differentiate their brand through the types of customer interactions that support long-term satisfaction and loyalty.

EXPERT OPINION
EXPERT OPINION