European Companies Step Up the Pace in the CX Race
Improving customer experience is driving investments in technologies such as AI and analytics that enable personalization to help organizations interact directly or indirectly with their customer base.
As consumers, we’re willing to spend more to receive better experiences, and companies are using the power of data and the voice of customers to gain knowledge of our preferences and deliver empathy at scale. Netflix analyzes the viewing history of users with similar movie preferences and provides personalized recommendations to boost customer retention, keep engagement high, and increase subscriptions. Similarly, Spotify produces weekly music recommendations, with fresh and personalized playlists released every Monday morning. This enables it to differentiate its service from its competitors Google and Apple, which have different approaches to choosing the most suitable song for each user.
Competition is at an all-time high, and providing differentiated experiences is what will make the difference between companies that listen to the voice of their customers and those that don’t. Spend in 2019 will be $104 billion, and IDC expects this to rise to $128 billion by 2022. By taking advantage of new, data-driven technologies such as analytics, Big Data, and AI companies are aiming to tailor experiences to each consumer, maximizing results across their customer base.
European companies are aware of the importance of a positive customer image and are prioritizing customers when making their IT investment decisions. The IDC report Business Outlook and Priorities for European Industries in 2019: An Evolution Driven by Customers, Cybersecurity, and Efficiency (based on the European Vertical Markets Survey 2018–2019) reveals that European companies identified customer experience as their top business priority this year, meaning they are stepping up efforts around customers to create superior experiences, improve loyalty, increase revenues, and stimulate growth.
Retailers Are Running Fast in Europe
According to the latest IDC Worldwide Semiannual Customer Experience Spending Guide, banking, retail, and discrete manufacturing are leading the CX race — and expected to absorb 33% of European CX spend in 2019. Retail is the fastest runner and is projected to replace banking as number 1 by 2021, with CX spending reaching $17 billion in 2022.
Companies must size the customer experience opportunity as analyse emerging areas they need in to reinvent customer journeys and provide differentiated customer-centric services. Companies must look at long-term plans of action to achieve their strategic priorities around customers, such as advertising and marketing, customer data and intelligence, customer satisfaction and trust, sales and renewals, and implementation and customer support, and see which program best fits their business model. Each of these programs is delivered through a set of use cases and specific projects employing line-of-business and IT resources. Of these use cases, omni-channel content shows the greatest potential as European businesses will progressively increase their investments to deliver consistent, optimized digital experiences across all customer channels. This use case is projected to grow the fastest throughout 2022. Omni-channel content reflects the core foundation of the future of CX through the optimization of content across channels at every point in the customer journey, creating a non-linear experience around the user.
The “Information Advantage” Is the Key to Success
On July 9–11, 2019, OpenText hosted Enterprise World in Toronto, where it described its efforts around innovation enablement and announced new projects and key partnerships. Throughout the event, OpenText recognized the importance of customer experience and how marketers and business teams are challenged to create real and personalized omni-channel experiences delivered at scale at any touch point, any time, and all the time.
CEO Mark Barrenechea said we are living in an “information era” in which organizations must unlock the information advantage, based on the data they have, to succeed. Data is not “an” opportunity — it is “the” opportunity and making the most out of both structured and unstructured content is what will differentiate successful from failing businesses. With data produced across many channels (customer interactions on websites, social media, emails, phone calls), being able to gather customer insights and act on them is what will bring higher-value services, a competitive edge, and a differentiated customer experience. Customer experience needs to be delivered as a product and data is the starting point to gather such actionable insights. Customer data will enable companies to tailor and optimize messaging and promotion preferences and to target offers based on everyone’s preferences. This will create value for companies and will enable businesses to personalize products and services, boost customer satisfaction, improve conversion rates, minimize disruption, and reduce frustration from loyal customers.
One interesting use case was how AI-infused Magellan can help companies to create value and analyze sentiment to act on customer behavioral patterns, attitudes, and sentiment, as well as understand which customers are complaining about which products, why complaints are happening, when a problem started, and what the impact on sales revenues has been.
In Conclusion
Customer experience is the next big focus. Companies must leverage CX momentum to maintain growth and use customer data with consent to drive customer experience in intelligent ways while also engaging emotionally. To this extent, implementing an AI foundation to gather customer insight and intelligently act on it is a must, and laggards will be left behind. Therefore, companies must invest in CX platforms and architectures that enable them to deliver strategic priorities such as customer journey personalization.
If you would like to learn more about the IDC Worldwide Semiannual Customer Experience Spending Guide, please contact Andrea Minonne or visit https://www.idc.com/eu/research/key-trends.