Customer experience has become the unequivocal differentiating factor for loyalty marketers in recent years. As a result, more brands are investing more in this crucial area to build customer loyalty and elevate the customer experience.
A recent study by Avanade shows that for every dollar invested in improving the customer experience, marketers generated three dollars in return. What’s more, loyalty marketers expect to see an 11% increase in revenue in the next 12 months.
But, several obstacles remain that prevent businesses from delivering an effective customer experience, including: Outdated services and systems, a lack of internal skills, and an inability to provide a seamless experience across different channels, according to the research.
Interestingly, Loyalty360’s second annual CX Landscape: State of the Industry Report predicted these challenges, and more last year.
According to the Loyalty360 2015 CX Landscape: State of the Industry report, CX budgets are growing, but there is a gap between brand priorities and adoption levels and an ongoing challenge of internal alignment. Internal alignment was noted as the biggest challenge for brands.
Marketers told Loyalty360 that customer insights are a main component of customer experience strategies.
“Yet data and internal platforms are among the biggest challenges reported,” the report says. “The technologies and platforms that pledged to solve the problems of customer data and customer experience have created confusion and frustration.”
Changing organizational cultures and processes to rally around the customer has proven to be difficult for many brands.
“There is also a challenge to identify meaningful benchmarks to truly gauge what’s working and what’s not working in this new customer experience paradigm, where a customer expects each and every touch point to be relevant and delightful,” the report says. “In spite of, or perhaps because of these struggles, brands are increasing their prioritization of customer experience as a critical strategy for growth. Some customer-centric brands are making strides to deliver customer experiences that build authentic customer loyalty, while others are scrambling to keep up. How are they doing it, what challenges have they overcome, and what are roadblocks to continued success?”
What’s more, the CX Landscape: State of the Industry report, noted that brands struggle between hearing and listening. Making the data actionable is a struggle and brands are aligning more toward the way customers think of the brand.
“Most brands define customer experience as an infinite number of interactions with a brand, at all phases of the customer journey,” the CX Landscape: State of the Industry Report reads. “Budgets are on the rise accordingly. Over half of brands reported that CX budgets have increased year-over-year, with a notable portion reporting sizable increases.”
Internal alignment is the biggest challenge being reported and executive buy-in is also a common struggle.
“Measurement is focused on customer satisfaction and net promoter scores,” the report says. “Even though brands expect customer experience to build loyalty, short-term metrics are used more often than longer-term metrics like customer retention or customer lifetime value. Internal benchmarks are most often used, rather than comparisons to industry standards or competitors.”