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Why some brands won't benefit from CX tech's evolution

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Technology vendors are consolidating disconnected CX tech into enterprise experience platforms - something that CX leaders should take advantage of... if they can. 

18th Feb 2022
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In a previous article, we discussed how the latest MyCustomer research reveals that customer experience leaders find technology to be a considerable obstacle to CX success. 

The study of customer experience leaders - to be released next month - found that over a third of respondents cited technology as one of the biggest challenges for their CX programmes. So why is it such a problem?

In the last article we spoke with Ed Thompson, distinguished VP and analyst at Gartner, about the issue. Among the problems he highlighted was the increasing complexity of the solutions, and the mind-boggling number of vendors offering tools. 

For some, this can create a kind of technology paralysis, with the fear of making a poor investment threatening to thwart progress. But the reality is that customer experience leaders can ill afford to ponder too long. 

Elaine Roche, head of customer experience at Wolters Kluwer UK, acknowledges that time is of the essence when it comes to solution selection, with CX leaders asking themselves some important questions. “What's going to have a relatively immediate impact on our customers? How long will it take from when I make the purchase to actually being able to get it up and running and making it available for my customers to start benefiting from it?

“Because in a lot of cases, it really helps to be able to prove the value quickly of your investment, as CX projects are something that are still evolving for a lot of organisations.”

With that in mind, it’s little surprise that easy integrations or end-to-end CX solutions are the order of the day for a growing number of customer experience leaders. 

An easier life?

As highlighted in a new report from Dash Research, while the CX technology market landscape has been developing at a rapid pace for more than a decade, it is now entering a new phase where shifts in industry priorities and business models are creating a period of mergers & acquisitions. And the report - “CX Market Ecosystem” - anticipates that the market will be characterised by continued consolidation for the next few years. 

These mergers and acquisitions are not only changing the face of the CX tech market, but they may also be of great benefit for customer experience leaders looking to  accelerate their technology plans, says Roche. 

“From my point of view, working for a large enterprise such as Wolters Kluwer, the less suppliers I’ve got to deal with, the better," she explains. "So it makes my life much easier as a purchaser if I know that I can get the majority of what I need from one vendor, or a limited number of vendors. That’s not to say we don’t look elsewhere - but it absolutely makes my life easier if I’ve got only a small number of supplier contracts that we need to sort out.”

Roche notes that when she’s looking to extend the ecosystem, one of the main considerations is which solution has an API that can connect into the existing technology: “What’s going to make it easy for me to get it up and running?”

She adds: “For large vendors such as ourselves, we also want to have consistency across multiple countries. There’s no point in me using one supplier in the UK and my colleagues in Belgium, or in the Netherlands, or Spain using a different one. We want that kind of consistency so that we can gain that kind of best practice as a brand, as a function, and work more effectively for our customers.”

The evolving CX market

And this is certainly something that the tech suppliers themselves are in tune with. The past 18 months has seen tremendous activity within the CX space, with numerous headline-grabbing acquisitions - we have seen Usermind acquired by Qualtrics, Pointillist purchased by Genesys and most recently Thunderhead acquired by Medallia. Elsewhere, the likes of Adobe and SAP have pivoted their offerings in recent years to promote themselves as ‘experience platforms’ in a bid to offer an end-to-end CX solution to their customers.

Following the acquisitions of Kitewheel and Usermind, Heart of the Customer’s chief technology officer Shawn Phillips predicted that the consolidation would only continue, as growing numbers of vendors seek to build out a full, unified CX tech stack, comprising journey mapping software, VoC platforms, customer health dashboards, journey analytics and journey orchestration. 

“In two years, Qualtrics and CSG, and probably Medallia, Quadient, and Adobe will be selling a version of the full CX tech stack,” he predicted

And for CX leaders that have historically found technology such a difficult arena, Phillips believes that these changes should be seen as a welcome development: “Leaders in the CX space are spending money consolidating disconnected CX technologies into enterprise experience platforms. Your job as a CX leader is to lean in and take advantage of the upward momentum.”

But there is a word of warning from Phillips' Heart of the Customer colleague Jim Tincher: "To maximise rewards and minimise risks, look before you leap. This investment needs to be made for the long-term health of your bottom line. But there’s too much at stake to hop on just any platform. Marketplace volatility means even some of today’s most prominent players might not be around tomorrow.

"Do your own homework or leverage agnostic technical expertise to see where you stand before choosing a platform. Then optimise implementation across your entire ecosystem so that you’re using all of the features you paid for to the fullest."

Time may be of the essence for customer experience leaders - but act with speed, not haste. 

The problem of siloed departments

So the rising consolidation in the CX tech market could potentially bring some respite for confounded customer experience leaders. But there is a potential fly in the ointment. 

While the consolidation and move towards all-in-one platforms could be a positive development for enterprises looking to simplify CX technology, organisations will be unable to enjoy the full benefit of it if there isn’t internal unanimity and collaboration - a single vision, rather than each team operating independently of each other. 

“If you talk to someone in IT, they don’t want a hundred different technologies they have to try and support and maintain and integrate,” notes Roche. “So to have one technology that all works beautifully together is very appealing. But imagine you’re working in the social marketing team and your job is to improve the customer experience in social marketing - you’re not interested in all the other stuff. You’re just interested in what goes on in social, so all you want is a social listening and a social marketing tool. 

“And each team and department is different. Customer service is very different to marketing, which is very different to sales, which is very different to the customer success management team. The problem is entrenched silos - lots of different departments buying different technologies."

So how rife is this issue? Well, when MyCustomer conducted its recent survey, one of the only challenges that CX leaders said was a bigger obstacle than technology was organisational siloes - cited by over a half of our respondents. 

Speaking from personal experience, Roche says: “I was talking to a client that has 42 different tools for listening to the customer! So we should consolidate - but we have to convince those different departments to come with us on the journey. ”

So while the CX tech industry is consolidating, there needs to be consolidation closer to home if organisations are to benefit from it.

The question, of course, is whether the customer experience leader is senior enough - or has enough influence on those that are senior enough - to be able to unite the departments to create a unified purpose. And that is something that is a completely separate challenge for CX leaders

Replies (4)

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By LinkedIn Group Member
18th Feb 2022 11:59

This comment posted in the MyCustomer LinkedIn group by member Jeff Sheehan:

Many of the technology tools of #customerexperience #management require a high level of program maturity to integrate and use. CX leaders need some serious business acumen to make business case for these investments and the return on that investment.

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Aki Kalliatakis Photo
By aki.kalliatakis1
21st Feb 2022 10:56

Great insights once again, Neil.

I'd make one small change to your title: Why MOST brands won't benefit from CX tech's evolution. Forgive me for harping on and on about this, but customers are people, and no tech/AI/Big Data will ever replace our basic need to connect with other human beings. It's been like this for hundreds of thousands of years, so why do we think that some smart tech will replace this all?

Not suggesting there's no room for tech as a tool, but when my bank can't even phone me on my birthday after 57 years as a customer, what the use of all this expensive tech? In fact, I'd suggest that nothing is necessary beyond your first sentence, which I have to repeat here: "In a previous article, we discussed how the latest MyCustomer research reveals that customer experience leaders find technology to be a considerable obstacle to CX success." It's an even greater obstacle to success when you ask customers.

But then again... I am 64, so maybe that plays a role.

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Replying to aki.kalliatakis1:
ND
By Neil Davey
22nd Feb 2022 08:56

You are almost certainly correct about the title, Aki - but the optimist in me couldn't resist making it 'some' rather than 'most'! :-)

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By Steven G
21st Feb 2022 16:17

A very interesting article. Having spent many years in CRM on both the client and vendor sides, I find the parallels between the emergence of these two technologies and the decision companies face to be strikingly similar. I urge potential customers to learn from the CRM experience before diving into CX technology decisions.
For example, the #1 reason CRM initiatives still fail or underachieve after all these years is that decisions are based first on technology. Successful CRM initiatives start with sound business objectives and requirements and then choose technology options that can best support them - not the other way around.
Today's CRM technologies offer an astonishing array of advanced features and functions. But chances are you will only use a fraction of them, so the rest becomes (costly) overhead. And while CRM does a great job managing transaction level details, it still leaves a lot to be desired when it comes to long-term, strategic relationship management (you would think otherwise). Companies that are successful in their CRM initiatives have learned to augment their platforms with custom functionality that support their business objectives in areas that aren't addressed by vendors.
Finally, there is the issue of siloed departments. It's still an issue with CRM implementations and the concerns appear to be the same for CX. My best advice is to get all the parties together before you bring in technology vendors. Work out the issues and requirements beforehand and make sure everyone's voice is heard.
While CX technologies are developing rapidly, it will still take time for both company customers and vendors to figure out what works. Letting your business objectives drive your technology decisions always leads to better results.

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