CX competence grows but confidence stalls, finds studyby
New research suggests that while customer experience management competence is steadily growing, confidence in CX is stalling, with investment and resourcing dropping.
The findings from a new international CX benchmarking study indicate that while customer experience management competence is steadily growing, confidence in CX is stalling - threatening to have a knock-on effect on investment and resourcing.
The CEM 2021 Benchmark is a comprehensive international study evaluating the CEM capabilities and competences of organisations around the world. And in its latest findings a few organisations have now reached the highest level of CX maturity (Visionary), where there were none in the previous year's research.
Despite this, the number of respondents that believe they offer better customer experiences than their rivals is holding steady - 70%, compared to 71% in 2020.
And arguably of most concern is a drop in the number of organisations that report that customer experience management related activities have had a positive effect on their results during the past year - 67% down from 78% in 2020.
Why are customer experience programmes declining?
Elsewhere, the amount of CX-related development projects is also on the slide. This year, only 69% of the respondents reported that their company has a lot of development projects in play compared with 82% that were working on CX initiatives in 2020.
"Another issue is that many companies have pulled the plug on their ongoing Voice of Customer programmes, and not introduced anything else instead, citing in many cases that they don't want to "bother" their customers. This was maybe a good temporary decision in the first year of the pandemic, but now it only means that they fail to get fresh insights on the changing needs of their customers, and operate in the dark with no valid real-life data to support business decisions. So how would they know whether they are doing the right things for their customers? This narrow-sightedness from the part of company policy-makers might have far-reaching percussions on the companies who have chosen this path. Customers will remember which companies were on their side, and who were only thinking of their shrinking profits."
Fringe benefits of the pandemic?
Despite these concerns, there are plenty of positives also showcased by the report. In particular, although there have not been as many ongoing projects this year as in the previous year, there continues to be a very strong focus on empathy and compassion - both internal and external.
"The top of the list for CX development activities are all about humanising things and improvements related to employee experience and employee engagement and making employees’ work easier," says Pihlaja. "It’s one of the very few things we can actually thank this pandemic for!
“For the next 12 months, one of the common themes describing CX development activities is focusing on your people: Internal communications and employee engagement, strengthening the customer-centric culture and customer-driven process development are the top priorities for the upcoming year. Organisations have started to understand the role of employee experiences and the role of employees in creating great CX more clearly than before."
The benchmarking research was developed by Finnish CX agency Shirute in collaboration with CXPA Finland to evaluate customer experience capabilities and competencies. The annual study has been conducted since 2013, when it was originally focused purely on Finland, before being expanded into an international programme last year.
The participating organisations were evaluated against the Shirute Customer Experience Management Index™ to understand the level of CEM maturity internationally.
This index measures, e.g. how systematic and goal-oriented the activities are, how well the respondents are organising themselves, how much they co-ordinate their various CX development projects, how customer experiences are measured, and how much they invest or plan to invest in customer experience management.
The data was gathered through an online form and phone interviews in May-December, with 92 CX professionals from 82 organisations from different industries participating.
"All of the responses are scored against the Shirute CEM Benchmark Index. This index consists of five different areas, where the CEM competency of the participating organisations is scored: scope, governance, culture, tools and processes," explains Pihlaja. "As each participant takes the survey, their responses are aggregated with the general results, and we report on the overall results. We also provide organisation-specific scores for the main index and each of the five areas. Depending on their score, they end up on one of the four CEM maturity levels (Survivor, Apprentice, Executive or Visionary)."
What contitutes a Visionary company?
With a handful of companies reaching the 'Visionary' level of maturity in the latest report, there are promising signs that the industry is moving in the right direction - despite some bumps in the road discovered in the research.
Pihlaja explains what sets 'Visionary' companies apart from the crowd: "A Visionary has placed its customers' voice in the core of its CX strategy, fine-tuned its Voice of Customer processes and defined clear responsibilities to put insights into action. In addition, it systematically takes into account customer feedback and development ideas in the product and service development process.
"In Visionary companies, customer listening and customer-centric development have been implemented as an organisation-wide way of work and employees are committed to this operating model - you can't force these things onto others. Employees have understood the importance of a customer-centric culture for the company and also bear responsibility for matters which may not always be within their area of duties. The corporate culture supports progressive innovation based on the Voice of the Customer across organisational boundaries.
"A Visionary company builds its customer understanding by measuring customer experiences at different stages of the customer journey and ties its KPIs to the (mostly financial) metrics that are already used in the organisation to run the business.
"The Visionary company already has customer experience as a guiding principle at the management team level and CEM can be measured and also dealt with in financial terms. Commitment is strong at the managerial level and linked to company finances and day-to-day management. The commitment of senior management means that there are sufficient resources and budget to keep CX development activities on a high level. Barriers to development are consistently removed.
You can download the full report here.
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.