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 Pegasystems Inc., the software company empowering digital transformation at the world’s leading enterprises. Pega’s 2020 Global Customer Experience Study was conducted amongst decision makers spanning 12 countries and seven different industries, by research firm Savanta.
The study highlighted four key pain points that businesses must address if they are to provide a better customer experience, successfully differentiate themselves from the competition, and improve engagement with their customers:
• 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. Twenty-six percent of CX projects are currently led by IT, 13% by dedicated CX functions, 12% by general management, 11% by marketing, and just 7% 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 into them and adopt a new approach. It’s a key reason why 81% of respondents cited ‘people issues’, including a lack of skills, sponsorship, adoption, and org structure amongst their top four CX challenges.
• Where are all the C-level sponsors?: Only 35% of businesses have a C-level sponsor for CX initiatives, while in 36% of companies these projects are led at director level or below. This can not only result in a lack of expertise, leadership, and awareness in the initiatives themselves, but can also cause those working on them to call the organisation’s commitment to CX into question. By contrast, the involvement of C-level sponsors can in itself break down the walls between IT and help the business and help to drive change.
• Lack of investment in most relevant channels: Sixty-eight percent of companies say that their channel focus is determined by the needs of their customers, but their actions say differently. Respondents named email (43%) and digital ads (42%) 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% said they were planning to invest in chatbots, and 26% planned to invest in inbound contact centres, suggesting a focus on prioritising short-term outbound gains instead of focusing on the inbound channels customer most typically want to use to communicate.
• 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, a quarter or more still rely on customer journey mapping (27%) or micro-segmentation (25%), while one in five (19%) still perform arduous A/B testing. Even more telling is that use of the type of customer-centric types of analytics that can really jumpstart CX, such as propensity modeling (37%), customer lifetime value projection (34%), or performance simulation (33%) are still far from prevalent.
“This study demonstrates that while many organisations see the value of improving customer engagement, many still need to understand that they can’t just purchase technology such as analytics or AI and expect it to be a panacea to all of their problems,” said Tom Libretto, chief marketing officer, Pegasystems.
“Instead, a new, more thoughtful, strategic approach is required. Companies need to look at their customers in a completely new way – as equal partners in a very complex, real-time relationship. 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.”