Fewer than two in 10 American businesses are quantifiably good at delivering customer experiences despite universal agreement that excellent experiences can differentiate a company from its rivals.
Why is this? Turns out the vast majority of companies lack the ability to absorb and analyze customer data fast enough to engage their customers at the right level, says a new study from Harvard Business Review Analytic Services.
HBR surveyed 680+ executives from a variety of industries. Most (73%) agreed their ability to deliver relevant and reliable customer experiences is "critical" when it comes to managing business performance in today's market, while nearly all (93%) expect customers to become even more demanding over the next two years.
Despite this, only 15% of respondents rated their company's ability to deliver superior customer experiences as "very effective" while 32% said their efforts are "not very effective." Another 53% rate their work as "somewhat effective." Don't expect those ratios to last; increasing pressure to deliver personalized, real-time experiences is already spurring transformation in a variety of industries — from financial services to software development.
Today, technology accounts for a huge portion of the disconnect laggards experience, HBR says, since legacy systems are "rarely capable" of delivering superior customer experiences. High performers, on the other hand, recognize this truism and are more likely to use agile methods, cloud and big data services, and extensible APIs for ingesting and analyzing huge volumes of data from a variety of sources.
But they also didn't get to that point by chance. Rather, respondents credited savvy IT and Business leaders for marshaling support from the top while also gathering the technical resources required for transformation. For example, 90% said a customer-centric culture is crucial for delivering a superior customer experience while 88% cited management and leadership buy-in, 87% cited visibility into and effort to understand the end customer experience and 86% cited a clearly communicated customer experience strategy. Not coincidentally, all of that starts at the top.
"Customer experience is something we have to focus on all the time to make sure that we never let it slip because we always have new employees, new systems, new vendor relationships. The customer experience has to transcend all of that as a key focus," says the president and CEO of a major U.S. credit union cited in the HBR research.
No two organizations will focus on customer experience in precisely the same way, but there are a handful of common themes to be found in the HBR study.
Specifically, high performers are more likely to have a single source of customer intelligence built directly into their IT infrastructure. They're also better at sharing and capitalizing on customer data to develop personalized, omni-channel experiences. Emerging technology and advanced cloud platforms, such as the Salesforce Platform now enhanced with Einstein’s AI capabilities, allow them to seize opportunities and predict needs.
Think of it like a river feeding a thirsty community: when deeply connected systems flow with data to produce a single view of the customer, in your core CRM, business results improve. Or at least that's how it ought to be. High performing businesses who capture and optimize information in this way are a rarity, HBR's research says.
Fortunately, what separates the customer experience leaders from the laggards may be a series of self-inflicted wounds that can be healed. A willingness to move ahead and take a different approach, delivered from the top, usually offers the quickest relief—because that's where most of the pain resides.
Usually it comes in the form of inadequate budgets, cultural resistance, or simple skills availability. A third of respondents in HBR's study cited these factors as impediments to enabling a single view of the customer. IT leaders that partner with executives tend to do best at breaking through and achieving results.
"We realized we weren't moving fast enough so our CIO handed 36 of his technologists to me," says the Chief Customer Officer of a multi-billion dollar institutional investment and benefits provider. "You can't get meaningful customer work done if there are functional lines getting in the way. So we have arranged ourselves entirely around the customer under one structure. We make all the decisions — and we're on the hook for the outcomes."
Transformation takes time, experience, and good advice to yield the greatest long-term benefit. Download the full HBR report now to get further advice for closing the customer experience gap in your own organization.