Organisations need to rethink traditional approaches to customer experience management according to a new study sponsored by Axway, in partnership with industry analyst firm IDC, a leading provider of global IT research and advice.
The study found that despite customer experience being the top digital initiative for organisations, 69% have yet to implement a single view of the customer.
It revealed that customer experience is now the most critical digital initiative for more than 70% of enterprises. The study also indicated that customer experience is now replacing product and price as a means to create brand value, distinctiveness and strategic differentiation.
Despite organisations investing in omnichannel strategies, the study found that an omnichannel approach isn’t consistently delivering ROI. Only 14% consider the value of omnichannel to be ‘a key differentiator and source of competitive advantage’. Conversely, 22% say it is just a ‘necessary cost of doing business’.
“Many enterprises have put a lot of investment and effort into omnichannel communications. However, the omnichannel systems of over four out of ten of our research respondents still fail to provide the essential unified and real-time view of customer experience,” said Gerry Brown, research director, software, at IDC.
“Omnichannel management and other early market technologies are being superseded by more holistic and customer-centric models – our research reveals that ‘customer experience’, ‘a single customer data view’ and ‘customer journeys’ are all rated as significantly more important as digital initiatives than omnichannel management.”
With traditional approaches to customer experience proving to be sub-optimal, IDC and Axway have identified a new approach to meet customer needs – customer experience networks.
Leveraging data from a vast array of internal and external data sources in a customer’s journey – including customers, employees, business partners and suppliers – allows organisations to co-innovate with customers and embrace stakeholders in a more strategic and coherent way than omnichannel.
The study revealed that traditional internally facing approaches and methods are being replaced by externally facing customer-centric methods, with more than half (52%) of enterprises moving very strongly towards ‘collaborative innovation’. Additionally, organisations operating customer experience networks are reporting increased revenue (68%).
Driving collaboration and innovation is APIs, of which 73% consider being ‘important’ or ‘extremely important’ for the implementation of customer experience networks.
In particular, senior executives in industries including financial services, telecommunications and media, and utilities verticals consider APIs to be top priority, with 80% of them indicating that APIs are ‘important’ or ‘extremely important’.
“Traditional approaches to customer experience are broken and as our research shows, organisations need to rethink their strategy for competitively achieving digital transformation,” said Jean-Marc Lazzari, CEO at Axway.
“For businesses, a customer experience network generates incredible speed, power and agility. They tap into internal business and IT teams, developers, suppliers and partners to initiate new ideas and create a crystal-clear view of the customer.”
IDC interviewed 101 respondents in the UK, 60% in IT, and 40% in digital or customer experience management.
UK respondents saw customer journeys as more of a priority than most other countries, with 30% of the organisations surveyed planning to implement customer journeys. CX implementation in general is a little higher than the norm, with 45% having implemented a CX digital initiative.
UK companies were also less likely to perceive the challenge of ’embedding customer experience as an ethos across the organisation’ as important as other countries do, which may reflect the greater maturity of CX digital initiatives in the UK market.
These companies tended to be more likely to be ‘ad hoc and random’ in their approach to omnichannel than the other countries surveyed. Hence UK companies’ need for an alternative to omnichannel is reflected in future demand for more CX-oriented systems.
This investment in CX is mirrored by the UK’s planned future investments in CX Networks. UK companies however see the general management issue of ‘managing shared business outcomes and shared value’ as more important than technical challenges, compared to other countries. UK companies’ also showed a larger appetite and plans to connect to ‘other complementary organisations’ as part of their CX Network adoption compared to other countries.
UK companies were finally more likely to use and plan to use APIs as an integration technology, but also are more open to using APIs as a method for creating new revenue streams than other countries. Key constraints on API adoption were seen to be lack of business ownership and sponsorship, availability of real-time analytics, and shadow IT initiatives.