Internal Alignment Continues to be a Challenge for Brands Focusing on Customer Experience

Customer experience is widely viewed as a pivotal point of differentiation among loyalty marketers. But, getting that customer experience right on a consistent and seamless basis remains a challenge.

Loyalty360 CEO and CMO Mark Johnson discussed the state of customer experience during Loyalty360’s webinar on Thursday titled, “The State of Customer Experience: Key Insights from Loyalty360’s 2016 CX Landscape Report.”

“Brands realize the fulcrum of the industry now is to look at all the touch points,” Johnson said. “Customer experience brands should be looking at it from a more holistic perspective.”

The report shows that IT departments were clearly becoming more involved in influencing marketing strategy during 2016, while operations seemed to be less involved.

“Greater IT involvement reflects the growing role of technology in marketing,” according to the report.

Organizations are looking for metrics and standards and how they can create internal alignment.

“Those who are struggling are looking to simplify customer experience and engagement, but endless sales pitches, new acronyms, and buzz words only serve to create more complexity,” the report says. “Those who get it have a deeper understanding of the data, customers, journeys, processes, and impact – as well as how to act on facets of each. We can sense, in initial interviews we have with these brands, that this understanding (or lack thereof) speaks loudly in every conversation; there is a stark contrast between those who possess this understanding and those who are struggling. There is an opportunity for us as an industry to seek ways to help these brands and simplify the path to increasing this impact.”

Johnson said there continues to be a clearer definition of customer experience, and brands are starting to define it in a more coherent manner, yet they continue to voice concern about a lack of metrics, standards, and benchmarks within the industry.

“As loyalty has evolved beyond transactional-based programs, brands now realize that loyalty programs are only part of a larger focused customer loyalty effort,” the report says. “We are seeing brands continue to define customer experience more holistically and more aligned with customer expectations. These organizations are redoing their mission statement in a pursuit to better understand the customer journey. Because they want to create simplicity, however, they voice concern over how ‘complex’ the process has become. They’re challenged with how one technology may define what they do as opposed to others, and how this obfuscation makes it harder to understand the differences in the technology offering, as well as how it may help the brand.”

The key, the report notes, is how the industry is being defined both from a brand perspective and a technology perspective: The offering, the challenges, the opportunities, and how to address them.

“Defining does not necessarily mean understanding; capturing customer data, creating customer journey maps, implementing new platforms and the like does not make a loyal customer if there isn’t cultural alignment,” the report says. “Alignment continues to be a challenge in 2016.”

Implementing CX requires a cross-functional buy-in and effort in any organization, the report says, and competing priorities tend to delay the process.

“Getting to the next level may require the replacement of legacy technologies, which others in the organization tend to resist,” the report explains.

CEOs must make the customer, not the organization, the centerpiece of their businesses.

“It means seeing the world as the customer does,” the report notes. “Customer-centricity is a necessary mindset to make an organization’s culture more amenable to a CX mandate.”

The CX Landscape online survey polled more than 150 brands, representing companies of various sizes and a broad spectrum of industries, from September to October 2016. The study evaluated CX budgets, definitions and scope, as well as metrics, performance, techniques, tools, and challenges.

Here are some key points from the report:

Almost one-third of the respondents reported a 10 percent to 20 percent budget increase in 2016, over 2015.

Activities surrounding customer feedback, customer service, and customer insights remained at the top of CX budget items and expenditures, though not quite as strongly as in 2015. This indicates that many marketers are spending money to listen to the customer. Loyalty/rewards expenditures come next in rank, which gained significantly in 2016. Not surprisingly, more funds were allocated to social media and technology.

About 60 percent of the respondents indicated that CX ranks extremely high or very high in importance on their priority list. Another 30 percent recognized CX as important but had other priorities.

Customer satisfaction was the top selection for prioritizing CX and measuring its success.

While the current leaders in measuring CX success are NPS and CSAT scores, marketers want shared benchmarks, metrics, and terminology for the loyalty/CX industry.

Email was the runaway winner as the preferred channel for engaging customers.

IT departments became more involved in marketing strategy and execution. This points to the continuing increase and refinement of technology in marketing.

More marketers (68 percent in 2016, compared to 64 percent in 2015) believe CX comprises all interactions and touch points with the customer.

“There’s a great opportunity in CX, as well as a great deal of confusion,” Johnson said. “The idea and challenge around metrics, technology, and tools continues to be a big piece. Our goal is to bring clarity to that. Customer satisfaction has grown. We believe that has to do with ease of measuring this from a brand standpoint. Customer loyalty/lifetime value, some of the longer-term metrics, are more difficult to measure. It’s a big challenge for brands. A lot of this is a lack of a consistent nomenclature. A lot of brands are looking at this idea of internal alignment. Does it resonate with their respective audiences? The idea of competitive advantage is important.”

While personalization “still has room to be clearly defined,” Johnson said, the report shows that nearly 25 percent of respondents aren’t doing anything in this area.

“To both facilitate engagement and build customer loyalty, it is no surprise that most brands and marketers find themselves in pursuit of a high level of personalization,” the report says. “However, while technology and various marketing innovations are making true personalization increasingly possible to attain, this strategy is not without significant challenges, which most are still struggling to overcome along their journey toward acquiring and retaining long-term customer loyalty.”

Call center, email, and direct mail were cited as the most effective channels. Customer satisfaction is still the big leader in measuring CX effectiveness, but down slightly from 2015. Another leader, NPS, was also down slightly.

Benchmarking against competitors is a key metric for loyalty marketers.

The three biggest challenges brands face with their customer experience strategies: Internal alignment, execution, and seamless omnichannel experiences.

“Reputable management consulting firms assert that the CEO must personally buy in, endorse, empower, communicate, and set goals throughout the company that promote CX,” the report says. “The incentives and accountabilities must be present.”

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