Customer experience initiatives have failed in recent times. Research points to a lack of insight into the modern consumer and deficient data use.
The idea of understanding a customer's journey through a series of touchpoints is obsolete today, proclaimed McKinsey & Company in a March 2016 article.
Instead, if firms are to capitalise on their customers' experiences, they need to be understanding them as a collection of unique journeys - for this is what the modern consumer expects. However, many firms are still falling short on this frontier.
A study by global technology company Avaya in mid-2014 found that more than four out of five organisations surveyed felt that their customer experience programmes had failed over the preceding three years. But they are still closely linked to firm growth and customer satisfaction, as 81 per cent of businesses noticed a significant increase in profits since they had a CEM initiative in place. Furthermore, they improved repeat purchasing, customer retention and loyalty, but businesses are struggling to keep up with what their customers and competitors are commanding.
Overcome by complicated customer experience journeys
According to the Avaya report, there are two primary reasons behind the struggle. Firstly, 43 per cent of business owners and CEOs reported that their programmes were nonaligned to customer preferences. Secondly, poor use of customer data to obtain practical insights plagued most businesses, with 62 per cent perplexed by the sheer quantity of incoming information.
Similarly, an Australasian study conducted more recently in 2016 found the primary barrier for improving customer experience was the sheer number of different touchpoints. The investigation, funded by strategic technology firms Econsultancy and Epsilon, suggested that marketers are struggling because the intricate and complex customer experience cannot be standardised or easily monitored. According to McKinsey & Company, this puts organisations at risk of losing touch with their customers by focusing too much on optimising processes rather than understanding that each customer wants to be treated as a unique person.
Poor use of customer data to obtain practical insights plagued 62
per cent of businesses.
Data insights are not delivering desired results
The 2016 survey looked into how well Australian and New Zealand organisations are understanding and acting upon their customer experiences. Only 5 per cent had achieved what was referred to as the customer experience "holy grail", with all channels seamlessly integrated.
KPMG explored this issue in 2015 in a survey of Australian, Chinese, German, UK- and US-based organisations, finding that, whilst 92 per cent of organisations surveyed had employed data and analytics to improve their marketing proficiency, only 19 per cent were actually satisfied with the depth of insights that they could procure. Anthony Coops, Partner of KPMG Australia, commented on the global implications.
"In most organisations, data about the customer is often fragmented across almost every function in the organisation - from finance and risk through to sales and customer services, and this data needs to be brought together to achieve a richer understanding of the customer," he said.
This is the holy grail - having not only systems in place to collect and consolidate customer data, but a framework to understand how this information can be used to strategically enhance each and every customer's experience.
Reaping the benefits of understanding your customer journey
Bola Awoniyi, research analyst for Econsultancy spoke to The Wise Marketer about how many organisations are missing out on the benefits of comprehensively understanding their customer experience, even though there are services that can facilitate such knowledge acquisition.
"We have entered a new era of marketing, with data and marketing technology now affording unprecedented opportunities for developing a more customer-centric approach," said Mr Awoniyi.
"Focusing on developing customer experiences can create a more loyal and engaged customer base, which is an extremely valuable competitive advantage in today's fast-paced commercial environment."
Building a programme to enhance your customer experience and offer powerful analytics to refine your strategy is essential to succeeding in today's hyper-competitive marketing environment. For more information about how you can use data to build a culture of loyalty amongst your customer base, contact Power2Motivate today.