Creating Customer Experiences that Endure
MUCH ATTENTION has focused on the superficial areas of customer experience (CX), or what many call a “skin-deep” approach. Although those areas are the most visible to users, this sort of approach neglects to address the complexities of delivering on end-to-end processes and often leads to rigid systems that accumulate technical debt and require frequent refreshes or expensive re-implementations. In fact, almost half of CX projects fail at first, for the above reasons.
After extensive conversations with hundreds of CX leaders over the past 12 months, Constellation believes that an enduring CX strategy will require a solid foundation that addresses the orchestration of disparate systems, processes, and technologies. As customer maturation increases, the gap between skin-deep CX and enduring CX will continue to widen.
CX LEADERS FACE MASSIVE CHALLENGES TO MEET TODAY’S POSTDIGITAL NEEDS
CX buyers face significant challenges. Existing solutions were built almost two decades ago to support now-antiquated use cases, single channels, and linear business models. Adding insult to injury, the technical debt incurred prevents modernization for today’s postdigital requirements. Those in the market for new CX solutions must also select from a limited number of vendors with minimal differentiation among their offerings.
Consequently, eight key challenges have emerged:
1. The gap in what customers expect and what is being delivered continues to widen. Many CX studies, including Constellation’s research on CX, find that more than 37 percent of customers will leave a brand after one bad experience. Customers seek seamless experience, minimal friction, and mass personalization at scale. Consequently, customers expect an enterprise to work as one seamless team.
2. Expensive replacement of legacy CX solutions hinders business transformation. Almost 63 percent of CX systems were designed, implemented, and maintained before 2010—in time for the first web revolution and the first wave of commerce. Most of them require a migration path to cloud-based, event-driven, and headless architectures.
3. Migration of digital assets and content is messy and costly. The explosion in content requires mass migration and modernization of digital assets, product catalogs, and a wide range of content. CX organizations continue to struggle to bring content, commerce, context, and marketing together. Newer systems require headless content systems.
4. Integration with adjacent systems remains problematic. From ad networks to payment gateways, CX systems form the heart of every company. The average Global 2000 company has to connect to more than 47 systems.
5. Convergence of B2B and B2C use cases requires one platform. Customers don’t care what department or channel you are in. They also no longer care about B2B versus B2C in CX. The lines have blurred, and organizations need one system or at least a single pane of glass to work with their customers and capture key data and analytics.
6. Companies fail to deliver end-to-end ownership of the perfect experience. These steps require orchestration across many systems to deliver customer- and experience-centric points of view.
7. Regulatory onslaught brings compliance and risk management to the forefront. CX leaders face continued regulatory requirements—from data sovereignty to consumer privacy legislation. In addition, cybersecurity requirements continue to expand.
8. Artificial intelligence and machine learning haven’t been delivered as advertised. The promises of improved analytics, automation, and next best actions have not been kept. Customers lack the ability to improve recommendations, automation, prediction, and risk management with the data in their CX systems.
ENDURING EXPERIENCES REQUIRE AN INVESTMENT IN FOUNDATIONAL CAPABILITIES
To succeed with a sustainable and agile CX strategy, organizations have to make critical investments. Judging from Constellation’s conversations with CX leaders, more than 83 percent of organizations that focus on cosmetic investments without making foundational investments will fail to deliver on the promise of CX. Why? Cosmetic improvement such as a prettier user experience or richer content must be paired with financial data, supplier information, and staffing capabilities. These CX islands often fail to deliver due to a lack of integration and orchestration.
CX systems must connect to other systems and provide the foundation for future capabilities. Constellation believes that the following attributes, among others, are critical to an enduring CX strategy:
• Prebuilt web components to improve the delivery of user experiences.
• Analytics frameworks to improve decision velocity.
• Automation capabilities to create the capacity for human interaction.
• Shifting from expensive and complex integrations to application programming interface (API) orchestration.
By aligning business strategy with technology, CX leaders can extend their capabilities and deliver the foundation for continuous innovation.
R “Ray” Wang is the author of the new book Everybody Wants to Rule the World: Surviving and Thriving in a World of Digital Giants (HarperCollins Leadership) and founder of Constellation Research.
Long-Term Customer Loyalty Is Long Gone
Having the best product or service is not enough; loyalty pros need to focus on other factors.
Understanding the Metaverse Economy
Enterprises will be able to bring their physical and digital presences together.
Prepare for the Age of the Metaverse Economy
A rundown of use cases and the steps to get you started.