Solving the customer experience (CX) riddle

In a new IDC survey, New Zealand C-suite executives named CX and marketing as their top focus over the next two years. So why do so many organisations still find it so hard to get right?

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Data silos can completely block the view of the customer, creating blindspots in the organisation.

Louise Francis, IDC New Zealand

If the customer is the heart and the lungs of the organisation, customer experience (CX) and engagement must be the central nervous system (CNS).

CX is diffused throughout the business to the edge and beyond. It connects a broad range of customer interaction data across systems and departments, no two organisations will have the same CNS and this is what makes an organisation's CX unique.

In IDC’s 2016 Asia Pacific C-Suite Barometer, almost half of the 225 New Zealand organisations interviewed stated that CX and engagement was now at the top of their business agenda. It is seen as a critical component and enabler of digital transformation (DX).

As a result, CX and marketing have been identified by two-thirds of New Zealand CIOs and other C-Suite executives as the top DX focus areas over the next two years.

So why do so many organisations still find it so hard to get right? Too often, improving CX is through insulated initiatives and delivery of CX is mostly reactive. In another IDC survey, the 2016 Asia Pacific Big Data Pulse and Software Survey, of the 113 New Zealand organisations interviewed, over half stated that a lack of a clearly defined strategy was the biggest challenge to delivering better CX. As shown in the figure below, the other big challenges include a funding, metrics, integration and data silos.

These results suggest that the 49 per cent with CX and experience at the top of the business agenda are heading for a train wreck, particularly if the top three challenges are not addressed first. The lack of a clearly defined strategy will in itself perpetuate the other challenges listed above. Without a strategy, you will struggle to get funding or understand and identify what metrics are important to your business. Perhaps the most telling statistic comes from how CX is measured by companies.

At the centre of CX transformation lies data driven intelligence, yet a third of New Zealand companies told IDC that they still do not measure the customer experience in their organisation. Of those that do, half use traditional customer satisfaction KPIs and only a quarter use a customer experience index that integrates quantitative and qualitative metrics from internal and external sources. The amount of data that is being generated and collected should be referred to as “dark data”, because most of it is still lying latent and untapped for insights that can be used to optimise CX and engagement.

Evolving customers' expectations and increasing competition mean that New Zealand organisations must solve the CX riddle now.

Louise Francis, IDC New Zealand

Evolving customers' expectations and increasing competition mean that New Zealand organisations must solve the CX riddle now. But, going by the feedback that has been provided to IDC, many are still not ready and have a lot of hard work ahead over the next two years. To get started, IDC recommends organisations to focus the three biggest challenges;

Get your CX strategy and roadmap in place: This should cover people, processes, technology, vision and offerings. Involve your employees, partners, and suppliers and create a CX-supported culture. It is also recommended that you identify CX sponsors within the senior leadership team and work with them to validate or challenge common business assumptions before rolling the strategy out.
Develop your data driven intelligence and CX metrics capabilities: Start simple and focus first on areas where the biggest impact will be. For example, which channel is already generating the greatest revenue per customer? But be care not to make assumptions. Any hard metrics must be augmented by periodic deep dive health checks which can identify subtle but crucial shifts in customer perceptions of your organisation. Customer relationships are built over thousands of interactions, both direct with the organisation and indirect, such as through social media and rich media.
Identify and remove data silos and windmills that obstruct your view of the customers. Data silos can completely block the view of the customer, creating blindspots in the organisation. In contrast, some organisations will have data windmills, where they get incomplete glimpses of the customer and their experience with the company, but not the whole picture. Identify the degree to which CX systems integrated and what further work need to be done to remove the silos. Invest in the “connective tissue” that links and infrastructure needed to bridge functional silos.

For many, this will just be the start of CX transformation in their organisation. What is clear is that a great CX will soon be the standard, so you must ask yourself, “What does our organisation have to deliver to stand out from your competitors and provide a remarkable customer experience?” If you can clearly articulate that, you are well on your way to answering the CX riddle.

Louise Francis (lfrancis@idc.com), is Senior Research Manager, IDC New Zealand.