CX Spending Is on the Rise
Two-thirds (66 percent) of companies are planning to dedicate more money and personnel to improving customer experiences (CX) this year than they did in 2014, according to a Temkin Group study. The survey studied companies with at least $500 million in revenue.
The spending surge comes as 42 percent of respondents stated their CX efforts had a moderately or significantly positive impact on the business in 2014, and 78 percent said they expect it to have a positive impact in 2015. "We're seeing a significant spending increase in customer experience," says Bruce Temkin, founder and managing partner of the Temkin Group. "It's the highest we've seen throughout the years."
And companies this year are making "smarter, wiser investments," Temkin says. "Few are just throwing money at [the customer experience]. Their investment is strategic. There are more companies with a solid playbook."
Interest in investing in a customer-centric culture, employee communications and engagement, and predictive analytics were the areas that spiked the most this year when respondents identified the things that would have a significant impact on their organizations’ customer experience in three years.
According to Temkin, voice-of-the-customer software is the top area for spending this year. "It's been growing every year," he says. "It's seeing a lot of activity right now."
The reason, he says, is that companies are looking to get more detailed information than they can get from traditional customer satisfaction surveys conducted annually.
Predictive analytics is another area "that will be very important in the future," Temkin maintains, pointing out that 81 percent of respondents expect to put more focus on customer insights and analytics.
Temkin was pleasantly surprised to discover that spending on employees and developing a customer-centric company culture is also on the rise. "Companies are recognizing that building a great customer experience starts with the people inside the company," he says. "Companies, thankfully, are building a customer-centric culture, and that is a good thing. The customer experiences that you deliver are a reflection of the company culture."
Also tied to that, companies expect to hire more customer experience professionals. Currently, 40 percent of the firms surveyed have more than five people in their centralized customer experience teams and 42 percent expect those numbers to rise this year. None are expecting a decline.
Not surprisingly, companies are also increasing their spending on Web and mobile applications. "Both of these areas had big jumps this year," Temkin reports.
In fact, 88 percent of respondents expect to put more focus on Web experiences, an increase from the 79 percent that expected to do so in 2014. "Across the board, the digital experience is on the rise," Temkin states.
But that's not to say that companies are ignoring their brick-and-mortar locations. In fact, just the opposite is true. "In-store experiences will have more of a focus this year," Temkin says. "It has a lot to do with companies rethinking the importance of in-person, face-to-face experiences. They are great opportunities to build loyalty."
Companies, he adds, are now looking to better connect the digital and mobile experience with the in-store experience.
Social media and phone self-service interactions were the only areas that did not gain momentum. "Early on there was a lot of hype around social and what it could do," Temkin points out. "Now people are realizing that there are more mature channels that they need to focus on. Social won't make or break a company, but some of the other ones can."
According to Temkin, a lot of the efforts around customer experience improvements are taking place in the healthcare, airline, utility, and TV and Internet service provider industries. "They're all starting to move more in this area," he says.
"I continue to be hopeful that more companies are spending more on the customer experience, and that they are doing it wisely," he concludes. —Leonard Klie