Many companies believe they are customer-centric and focused on improving their customer experience, but do they have the measurement(s) in place to be sure? Why are many not achieving the desired improvements in customer loyalty and profitability? And why does success feel like a moving target?
West Monroe Partners’ 2013 Customer Insights & Customer Experience Diagnostic Survey sought to answer these and many more compelling questions. In April, 2013, we surveyed more than 100 senior marketing and customer-related executives across multiple industries to assess key capabilities for using customer data and developing analytic customer insights, as well as ability to use those insights to develop a seamless, effortless customer experience that produces competitive advantage.
Companies have a lot of customer data, but capabilities for and commitment to using it still lags
Survey findings indicate that firms do collect a significant amount of customer data in-house but that they do so inconsistently, don’t necessarily trust the data, and may not use the data to generate true insights into customers’ needs, values, and propensities. One of the least advanced capabilities is using available customer insight to improve quality and consistency of customer experience across channels. In addition, nearly half of the firms we surveyed still use traditional and general customer satisfaction metrics rather than newer and more action-ready metrics such as customer lifetime value, Net Promoter Score, or Customer Effort Score.
Of course, no customer experience initiative will succeed without appropriate executive commitment and leadership. When respondents were asked who leads their customer experience initiative, however, the most common response was “nobody”—indicative of why many customer experience initiatives fail.
These are some other key insights from the survey:
- Most respondents do not have a formal customer data governance organization to oversee the exchange of information and address critical data issues
- Fewer than half said that they can definitely estimate the cost of acquiring a new customer
- More than half said they cannot identify the existing customers most likely to respond to a specific cross or up-sell offer
- Barely one-fifth consistently use analytics to determine the next business action with a customer
- Fewer than one-fifth perform defection analysis to identify customers most likely to defect
- Over four-fifths have missed revenue opportunities due to lack of customer insights at key touch points
- Nearly two -ths believe they are “not at all effective” at using customer insights for contact center interactions, while one in ten said their contact center actually hinders overall customer experience
- More than a quarter believe they don’t have a social media strategy, while 40 percent don’t have a mobile strategy
Finally, just over half of respondents believe their firm is organized around the customer but only 40 percent align incentives accordingly. Furthermore, only one quarter of respondents measure customer insights or customer experience on an enterprise-wide basis. Continued perceptions that a particular department or function “owns” customer experience will inhibit organizations from reaping the full business benefits of a robust customer-experience plan.
Who is leading the way?
Customer savvy organizations want to know who among their competition and across the industry have advanced customer insights and customer experience capabilities and what they are doing to achieve those capabilities. Banks and, to a lesser extent, insurance companies are leading the way, mostly on the retail sides of their businesses. Healthcare also continues to make major strides, especially given healthcare consumer reform. Energy and utilities, especially municipal-owned and regulated monopolies, continue to lag others and now realize the detriment that can come from poor customer satisfaction.
Why is this so important?
Profitable growth is always a challenge. A positive and effortless customer experience can have a marked impact on customer satisfaction, loyalty, and advocacy, as well as greater customer lifetime value. When firms utilize data-enabled, insight-driven, organizational design and technology strategies to optimize customer experience, they can achieve competitive advantage.
In today’s digital and socially connected world, customers expect effortless, multi-channel, differentiated customer experiences from the companies with which they choose to do business.
Is yours one of them?
Get more insights from the 2013 Customer Insights & Customer Experience Diagnostic Survey.