Customer experience is very much in fashion—and it’s unlikely it’ll ever go out of style. Everything from the latest analyst research to our own experience as customers points to its ever-increasing importance. Customers might have always been right, but it’s now clear that their experiences are central to business success.
That holds true for high-tech companies, and those of us in the industry appear to know it. In the new report “High-Tech Digital Investments Lead to Customer Experience Gains” from Ovum (commissioned by Adobe, which owns CMO.com), nearly 80% of the 200 high-tech marketers surveyed said they’re looking to improve the quality of their customer experiences over the coming year.
At first blush, it appears that high-tech companies are confident and even bullish about how well they’ve been doing with customer experiences. A surprising 87% of respondents said they’re able to keep pace with escalating customer expectations—which is 10% higher than last year.
Why the increased confidence? It’s partly because many high-tech marketers believe they’re getting better at understanding their customers. Last year, a clear majority reported that “understanding individual customer needs” was a key challenge. This year, that number dropped substantially—down 25 percentage points to 40%. Other customer-oriented challenges also dropped year over year.
Confidence vs. Reality
But there are indications high-tech companies might want to tone down that confidence, especially considering the exemplary experiences required to differentiate in such a competitive environment. For example, falling Net Promoter Scores over the past couple of years paint a less-than-rosy picture. According to Temkin Research, the average NPS for tech vendors dropped from 31.8 in 2015 to 21.4 in 2017.
That matters. NPS correlates to a willingness for customers to repurchase, try new offerings, and forgive organizations. Plus, research has shown that companies dedicated to customer experience over time tend to outperform their peers on metrics across the customer life cycle, from acquisition to retention.
When you dig into the Ovum report, you start to see beyond the bluster to the many challenges high-tech marketers still face. For example, over half of survey respondents said that inadequate budgets, security risks, and a lack of staff are barriers to digital transformation. And despite their growing confidence around customer understanding, customer data continues to be a challenge for many. Nearly all respondents reported at least some challenge around data analysis, integrity, integration, and capture—and a substantial percentage reported the challenge as “business-critical.”
Investing In Experiences
When asked about digital marketing investments, more respondents said they planned increases across the board than they did last year. Every option posed saw greater numbers, but the biggest year-over-year growth was in campaign management, customer experiences, and account-based marketing, all of which are 10% higher than last year.
Based on the research, Ovum provided their recommendations on where you should invest your digital dollars. Here are some areas:
• Integrate everywhere: Siloed teams, fragmented data, and disconnected technology limit high-tech organizations from succeeding at meeting business and customer needs. But when you integrate channels, data, and technologies, you can coordinate and orchestrate all customer engagement activities in a way that’s mutually beneficial—for both better customer experiences and greater revenue.
• Be data-driven: When you can’t make sense of their data, you can’t understand your customers. Even though the percentage of high-tech companies that said they understand their customers increased substantially (65% this year vs. 40% last year), that means many are still struggling. Also, the vast majority reported that integrating customer data was important, and nearly a quarter considered it business-critical.
Additionally, the need to democratize data is clear. Bringing real-time, easily digestible data to your nontechnical employees means they can easily interpret, share, and act on data-driven insights throughout the customer journey. That, in turn, leads to not just greater customer understanding, but also to potential experiential improvements.
• Focus more on mobile: Although investments in mobile rose from 37% in 2017 to 44% in 2018, only 38% of high-tech companies reported being mobile-first. No matter whether it’s B2C or B2B, mobile is increasingly driving experiences across all industries. In some subsectors of high tech—consumer-oriented software, for example—mobile might even be such a given that the idea of “mobile-first” seems redundant. Other subsectors, especially those with a B2B focus, will increasingly need to follow suit.
• Increase digital investments, and make those investments smarter: Competition is fierce in high tech, yet investments in digital engagement are low when compared with other industries, the report found. Also, 55% of respondents said they have inadequate budgets to support innovation, and 34% said they lack senior support.
Leading high-tech organizations invest in digital projects that align with business strategies—and that meet increasingly lofty customer expectations. Also, advances in artificial intelligence and data will increasingly foster customer expectations for personalized, seamless experiences. If those expectations are met or even exceeded, it will increase opportunities for customer engagement and loyalty—as well as for greater revenue.
Businesses that prioritize experiences are winning; this report captures how high-tech companies overall are trying to address that. But not all high-tech companies are the same, of course. For my next article, I’ll dig deeper into Ovum’s findings and see how subsectors in high tech vary in how they approach customer experiences—and how even subtle differences can make a big difference.