Marketers betting big on CX despite ROI doubtsby
New research reveals that marketers continue to plough money into customer experience - a trend that is expected to continue for the foreseeable future.
Marketers are continuing to ramp up investment in customer experience (CX) in a bid to differentiate their brand, according to a new report.
The CMO Survey, which is based on a poll of 365 marketers undertaken by Deloitte and Duke University’s Fuqua School of Business and sponsored by the American Marketing Association, reveals that expenditure on CX has leapt by a huge 71% over the last three years and now makes up 15.2% of organisation’s total marketing budgets compared with 8.9% in 2017.
This figure is also expected to jump by just over a third (36%) over the coming three years, which means that CX is predicted to comprise a significant 20.6% of budgets by 2023.
Members of the banking industry have to date been the biggest spenders in this area and this situation is anticipated to continue into the foreseeable future. Business-to-business services companies and organisations with sales revenue of between $500 and $999 million have also proved keen investors here.
Christine Moorman, a marketing professor at Fuqua and director of the CMO Survey, says: “Companies are realising customer experience is where they can stand out relative to their competitors. It’s not just about the product or service but the entire customer journey from beginning to end, and it’s something companies should be explicitly managing.”
However, despite the trend for growing CX investment, Moorman believes that many organisations are failing to get as much out of their CX expenditure as they should.
“They haven’t really thought about building their capabilities throughout the customer journey,” Moorman explains. “They also often forget the importance of a customer-focused culture as an essential ingredient in getting the entire company to focus on creating and delivering an outstanding customer experience.”
But despite this situation, it seems as if CX investment is still being prioritised, coming against the backdrop of an anticipated slowdown in overall marketing budget growth to 7.6% over the next year, compared with 8.7% last year.
Yet even this picture is not as bleak as it seems. As a percentage of companies’ overall budgets, the marketing portion remained steady at 11.3%. Moreover, as a percentage of total company revenues, it actually rose this year to 8.6%, which amounts to a 9% increase since 2018.
Unsurprisingly then, optimism among marketers is on the rise, hitting 62.7 points out of 100, compared with only 57 points last year, which was the lowest point ever over the survey’s last eight years.
This lack of confidence led to a 6% fall in planned hiring, although it was still in line with the long-term historical average of the last decade. Over the year ahead, however, recruitment is expected to double in four key industries: healthcare, technology, communications and retail, with employers generating sales of between $26 million and $99 million being the most enthusiastic hirers of all.