Organisations must tear down the walls between IT and the business and make more customer-centric investments if they are to improve customer experience (CX), according to new research from software company Pegasystems.
Pega’s 2020 Global Customer Experience Study was conducted among decision makers spanning 12 countries and seven different industries by research firm Savanta.
“This study demonstrates that while many organisations see the value of improving customer engagement, many still need to understand they can’t just implement a new technology and expect it to be a panacea for all their problems,” said Tom Libretto, CMO, Pegasystems.
“Instead, a more holistic, strategic approach is required. Organisations need to look at their customers in a completely new way – as individuals that have unique needs and preferences within a very complex, real-time relationship with every brand they interact with. They have to earn the right to that relationship every single day, which requires change at the very top of the business, driven by empowered C-level leaders who are willing to re-architect their core business around the customer.”
The study highlighted four key pain points businesses must address if they are to provide a better, more personalised customer experience, successfully differentiate themselves from the competition, and improve customer satisfaction and loyalty:
1. Walls between IT and the business are causing CX confusion
The research revealed that IT is twice as likely to lead CX business initiatives than any other group. 26 per cent of CX projects are currently led by IT, 13 per cent by dedicated CX functions, 12 per cent by general management, 11 per cent by marketing, and just seven per cent by retention and loyalty specialists.
While IT is critical to supporting these projects, problems can arise when they are forced to make business decisions that require those in other departments – many of whom are measured by a different set of metrics – to buy in and adopt a new approach, or a new technology solution.
It’s a key reason why 81 per cent of respondents cited ‘people issues’, including a lack of skills, sponsorship, adoption, and org structure among their top four CX challenges.
2. Where are all the C-level sponsors?
Only 35 per cent of businesses have a C-level sponsor for CX initiatives, and in 36 per cent of companies these projects are led at director level or below. This can result in a lack of expertise, leadership, and awareness in the initiatives themselves and can also cause those working on them to question the organisation’s commitment to CX.
By contrast, the involvement of C-level sponsors can in itself break down the walls between IT and the business and accelerate change.
3. Lack of investment in the most relevant channels
68 per cent of companies say their channel focus is determined by the needs of their customers, but their actions say otherwise. Respondents named email (43 per cent) and digital ads (42 per cent) as their top two channel investments for next year – both of which are considered to be channels with increasingly lower customer response rates.
By contrast, only 28 per cent said they were planning to invest in chatbots, and 26 per cent planned to invest in inbound contact centers, suggesting a focus on prioritising short-term outbound gains instead of focusing on the inbound channels customer most typically want to use to communicate.
4. Reliance on outdated analytics
While analytics software evolves at lightning speed, the study found too many outdated and less effective analytics solutions still in use. For example, one quarter or more still rely on customer journey mapping (27 per cent) or micro-segmentation (25 per cent), while nearly one in five (19 per cent) still perform arduous A/B testing.
Even more telling is that use of customer-centric analytics that can really jumpstart CX, such as propensity modeling (37 per cent), customer lifetime value projection (34 per cent), or performance simulation (33 per cent), are still far from prevalent.