Why is technology such a headache for customer experience leaders?by
New MyCustomer research reveals that technology is one of the biggest obstacles to successful customer experience programmes for today's CX leaders. We investigate why it is such an issue.
New MyCustomer research reveals that the majority of customer experience leaders are confident that their budgets will increase in the next 18 months.
In our soon-to-be-released survey of over 100 customer experience professionals, conducted in partnership with the European CX Organisation (ECXO), we found that around two-thirds of CX leaders are anticipating that their budget will rise in the foreseeable future.
And the findings also reveal the broad range of technology solutions and platforms that they have direct responsibility for purchasing - with large numbers of respondents reporting that their CX teams had purchased anything from Voice of the Customer solutions and CRM systems to customer data platforms and live chat tools.
At the same time, around a third of respondents told us that despite this history of investment, technology was one of the biggest obstacles to their customer experience programme’s success.
So why is technology such a problem for CX leaders? Over the course of two articles, we'll be exploring some of the many issues that are facing customer experience leaders when it comes to CX tech - and which are in their hands to be able to address.
CX technology projects that won’t improve customer experiences
Some technology projects are either deliberately or mistakenly categorised as customer experience investments, when in fact any benefit to the customer is a minor byproduct of its chief goal.
Ed Thompson, distinguished VP and analyst at Gartner, explains: “One of the confusions is that some projects can primarily be about improving the customer experience but really it’s doing things to customers that benefit us as a company, and it may be that there are some side effects so that the customer benefits as well… but it’s a side effect.”
CRM projects are a case in point. CRM was the second most common technology that CX leaders told us they had been responsible for investing in. But to what extent do many CX projects actually benefit the customer?
“I would say that 90% of CRM projects include sales, marketing, customer service, commerce, field service… those sort of things,” continues Thompson. “But 90% aren’t designed to benefit the customer. That’s not the intent - though sometimes they might have a side effect which benefits the customer.
“When I talk to customers we’ll ask them whether it is about improving loyalty and advocacy and they will reply that yes, that is what they’re trying to do. So that’s pretty clear. But then often people will tell us that they’re trying to cross-sell and up-sell to the customer to improve the customer experience. Has the customer asked to be cross-sold something? Did they specifically say that’s what they wanted? No. So basically it’s a marketing project for upsell and they’re wanting a technology for that, but they’re calling it CX.”
For CX leaders, the performance of whom is often gauged by customer satisfaction and customer loyalty metrics, it is important that their technology investments have a clear and concerted benefit to the customer experience programme, rather than acting as a trojan horse for marketing initiatives. And the technology industry is itself culpable to a certain extent.
As Thompson notes: “There is an issue that all the CRM vendors call themselves ‘CX’. Salesforce, Oracle, SAP, Microsoft, Pega, Zendesk…. all of them. They say they’re CX vendors, but they’re not - they’re CRM vendors.”
And there are other issues with the industry itself…
CX market complexity
When Gartner recently surveyed CX leaders to find out what tech they were focused on most and they received over 100 different types in response. Speaking with fellow CX experts Paul Greenberg and Brent Leary on a CRM Playaz LinkedIn Live event last year, Ed Thompson noted: “What we [at Gartner] get asked all the time is, how big is the CX market? And my answer is always, how big do you want it to be? I made a list of vendors that are calling themselves CX vendors and I got to about 800 and then had to stop. It’s personalisation, it’s CRM, it’s analytics tools, it’s content management, it’s customer journey, it’s Voice of the Customer and survey tools. It’s lots of different tech.”
The range of different technologies classified in the CX tech market is indeed huge. When customer experience leaders are asked what technologies they are using to help to improve CX, it seems as if almost anything can be included. Thompson notes that some of the technologies that have been quoted by CX leaders include the likes of virtual reality, smart meters, privacy management, biometrics and point-of-sale systems. “It could be almost anything,” Thompson tells MyCustomer. “Which doesn’t really help.”
And as we have already noted, the vendors themselves aren’t making matters any easier, by badging their solutions as CX tech, regardless of whether they’re selling anything ranging from content management systems and payment solutions, to IVR solutions and unified comms.
CX technology complexity
The technology itself is also becoming increasingly sophisticated - a double-edged sword, because while the greater functionality may be warmly welcomed by some, others may find it excess to requirements, potentially discouraging employees from using it. SugarCRM research from last year found that 43% of professionals say their CX technology is too complex and not user-friendly, damaging the quality of customer experience.
Voice of the Customer tools are a perfect example of a rapid developing tech. A cursory glance at some of the tools from the bigger names in this category - Qualtrics, Medallia, Forsta (formerly Confirmit), NICE, Verint and so on - reveals that these solutions have evolved far beyond mere feedback.
VoC isn't just listening and analysing anymore, it’s automating and triggering action in lots of different ways in lots of other applications. And that’s a much more strategic investment when you start doing that.
As Thompson notes: “Many of them have more than 80% of the data in their tool that is not feedback - it’s not survey data. They’re ingesting social media data, social media text, video and call recordings, speech-to-text. But more importantly they’re pulling in point-of-sale data and transactional data, and location data and web analytics data.
“And you start to realise that this is quite a complex thing. We started calling it Voice of the Customer about six or seven years ago, but when you think of the evolution it has gone from surveys, to enterprise feedback to Voice of the Customer… but now it has become something else, because it’s not just the customer they listen to - it’s the employees and the partners too. And it’s not just being used for customer experience programmes, it’s also being used for employee experience programmes, and user and experience and product testing, and product improvement and R&D, and innovation.
“There are also different types of analytics - predictive and prescriptive analytics - and then these tools all have case management tools, and alerts, and notifications and closed loop follow up. It’s not just listening and analysing, it’s automating and triggering action in lots of different ways in lots of other applications. And that’s a much more strategic investment when you start doing that.”
Pressure on CX leaders
While this should lend itself to a considerable period of consideration before investment, customer experience leaders are rarely offered this luxury. Indeed, CX leaders often find themselves under extreme pressure to make a Voice of the Customer purchase as swiftly as possible, despite having so much to get their heads round.
Thompson suggests that it is not uncommon for heads of CX to be an unpopular appointment - “You’re given the job and everyone hates you straight away, because they say ‘Who are you to tell us what to do with our customers?! Do you know who we are in the customer service team?! Do you know who we are in operations and supply chain?!”
To that end, a Voice of the Customer solution can become a stake in the ground for the CX leader - ensuring that they have a better understanding of customer feedback and customer metrics than any other single department.
“Your defence mechanism is to say that you have a better view of the customer’s feedback and viewpoints and opinions and sentiment than anyone else, and can aggregate it together. And the other thing you’re very interested in is all the different ways of measuring the customer experience - and of course one of the things these tools provide now is a dashboard of metrics. So it is a kind of defensive tool for the head of CX if you can consolidate this all together, and so it’s usually one of the first things they grapple with as they’re trying to drive the programme.”
In that scenario it’s easy to see how a poor purchase decision can be made - but CX leaders must resist the temptation to rush the process, no matter how much pressure they're under.
In the next article in this series, we'll explore some more of the challenges that make technology such a blocker for CX leaders, and what the consolidation in the CX tech market means for them.
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.