Customer Experience (CX) Highlights the Digital Path to Purchase

Stephen DeAngelis

March 03, 2015

Gartner analyst Jake Sorofman (@jakesorofman) reports that Gartner’s 2015 Marketing Spending Survey concludes, “Customer experience is the most pressing mandate for marketers, [it was] the top area of marketing technology investment in 2014, and it will lead innovation spending for 2015.” [“Gartner Surveys Confirm Customer Experience Is the New Battlefield,” Gartner Marketing for Leaders, 23 October 2014] Commenting on Sorofman’s article, Hank Barnes (), a Gartner research director, writes, “My colleague Jake Sorofman recently shared some results from a Gartner survey on the high level of priority marketing groups have given to customer experience (CX) in their 2015 plans, calling it ‘the new battlefield.’ I could not agree more, but want to express a word of caution. CX is not about marketing on its own.” [“Caution on the Customer Experience Battlefield,” Gartner Blog Network, 30 December 2014] He explains:

“Marketing can’t deliver a great customer experience independent of sales, service, and any other part of the organization, and your ecosystem that impacts how a customer perceives your company and your products (and/or services). Yes, personalized experiences during the buying process matter. Yes, using extensive data analysis to gain insights for that personalization matters. But those are just elements of the experience. What matters most is consistency end to end — from the time buyers first learn about your company through the buying process and beyond — as they use the product and get value. Without a holistic approach, you are really only hoping that you can deliver a great experience.”

CX is sometimes referred to as “customer engagement.” I prefer the term “engagement” because it connotes an activity in which both the seller and the customer are actively involved. A person can have an experience on his or her own, but one can only be engaged when more than one party is involved. To learn more about customer engagement, read my article entitled “Engagement is the Key for Digital Path to Purchase Success.” If you are a marketer, Sorofman insists that knowing CX is the new battlefield “should cause you to sit up straight.” He explains why:

“As competition and buyer empowerment compounds, customer experience itself is proving to be the only truly durable competitive advantage. A recent Gartner survey … on the role of marketing in customer experience found that, by 2016, 89% of companies expect to compete mostly on the basis of customer experience, versus 36% four years ago. According to the same Gartner research, fewer than half of companies see their customer experience capabilities as superior to their peers — but two-thirds expect these capabilities to be industry leading or much more successful than their peers within five years.”

Providing customers with both good content and appropriate context is essential to ensure they have a good experience. “Face it,” writes Carlton A. Doty (@carldoty), “Your brand is defined by the interactions that people have with it. While that’s not what we typically think of as marketing, it ought to be.” [“The Power of Customer Context,” Forrester, 14 April 2014] One of the examples of good engagement that Doty provides involves a use case with which my company, Enterra Solutions®, has been intimately involved — McCormick & Company’s FlavorPrint™ initiative. Doty writes:

“McCormick & Company’s FlavorPrint engages customers through everyday interactions. The FlavorPrint site has a simple promise: Tell it what you like, what ingredients you have, and what cooking equipment you have, and it recommends recipes. Those recommendations become finely tuned to your context as you continue to interact with the site. This works so well that since the site was launched, users have doubled repeat usage; they’ve increased the time they spend on the site ninefold; and McCormick has seen double-digit growth in spice purchases for FlavorPrint users. FlavorPrint will soon incorporate users’ social networks, McCormick’s retail partners, and third-party services like Foodily, creating more relevance to draw consumers back.”

Doty captures two important concepts in that use-case description: engagement and interaction. Those concepts lie at the heart of a good customer experience. Daniel Newman (@danielnewmanUV) writes, “Focusing on individual engagement works because you get the data from single entities and not groups, which allows you to fine tune your marketing strategies much more effectively. 1:1 marketing is a great indicator of customer behaviour, their purchase trends, and the post-purchase evaluation. This is the data a marketer should be looking at in an effort to create more impacted sales and marketing strategies.” [“Big Data and Omni-Channel Pave The Way For 1:1 Marketing,” Forbes, 28 October 2014] Laura McLellan (@lauramclellan), a Gartner analyst and author of the 2015 Marketing Spending Survey, predicts that customer experience is going to be the next big thing in marketing and she offers 10 reasons why she reached that conclusion. [“10 Proof Points – Why Customer Experience Is the Next Big Thing,” Gartner Marketing for Leaders, 17 October 2014] She writes:

“To cut to the chase, here is a subset of the proof points — a list of 10 findings from primary research surveys — that convinced me customer experience is indeed the ‘next big thing’ that requires investment in people, process and technology for the foreseeable future. The list is in alphabetical order by the firm who conducted the research. Note that some research requires registration. Gartner research requires subscription.

1. Accenture — 2013 Global Consumer Pulse Survey (n=13,168 consumers)

’85 percent of customers are frustrated by dealing with a company that does not make it easy to do business with them, 84 percent by companies promising one thing, but delivering another; and 58 percent are frustrated with inconsistent experiences from channel to channel.’

2. CMO Council, in partnership with SAP — 2014 — Mastering Adaptive Customer Engagements (n=319)

‘Marketers believe that customer centricity — and the customer’s belief that they are engaged with a customer-centric organization — is critical not just to the business, but also to the individual marketer’s success.’

’39 percent of respondents agree that the very definition of customer centricity is being established at the very top of the organization with the president/CEO.’

3. Gartner — 2014 — Gartner Survey Finds Importance of Customer Experience on the Rise — Marketing Is on the Hook (n=200 responsible for customer experience, revenue > $500M)

‘89% of companies surveyed plan to compete primarily on the basis of the customer experience by 2016.’

‘65% of companies have the equivalent of a chief customer officer — they report equally to the CMO and CEO.’

4. Gartner — 2014 — The 2014 Gartner CEO and Senior Executive Survey: ‘Risk-On’ Attitudes Will Accelerate Digital Business (n=410)

‘The most important technology-enabled capability investment to support growth over the next five years is digital marketing, followed by customer experience.’

5. Gartner — 2014 — Gartner’s 2015 Marketing Spending Survey — Customer Experience Leads Investments (n=315 responsible for marketing budgets, revenue > $500M)

‘The top marketing technology investment for 2014 was customer experience.’

‘18% of the total marketing expense budget was spent on customer experience in 2014.’

‘#1 innovation project for 2015 is customer experience.’

6. Gartner and The CMO Club — 2014 — CMO Leadership, Accountability & Credibility within the C-Suite (n=105)

‘CMOs say leading the customer experience cross-functionally at all touch points is the top investment over the next 2 years.’

7. IBM — 2013 — The Customer-activated Enterprise (part of the Global C-suite Study) (n=4,183 CXOs)

‘As the digital infuses the physical, and vice versa, organizations are transforming the customer experience. Nearly seven in ten CxOs recognize the new imperative …’

‘39% of outperformers have developed a fully integrated digital-physical customer strategy.’

8. IBM — 2013 — Stepping up to the challenge: CMO insights from the Global C-suite Study (n=524 CMOs)

When asked to what degree they’ve implemented ‘Integrated customer touchpoints across physical and digital channels’, 16% said ‘large extent’, 38% said ‘somewhat’, 46% said ‘limited extent’.

9. McKinsey — 2014 — The digital tipping point (n=850 CXOs)

‘Of the six digital trends we asked about, executives expect the largest share of their digital growth in the coming years will be from digital customer engagement,…’

‘Respondents most often rank digital customer engagement as a top strategic priority, too, and report that current spending patterns mirror digital priorities.’

10. Oracle — 2013 — Global Insights on Succeeding in the Customer Experience Era (n=1300)

‘93% say that improving CX [customer experience] is one of the top three priorities for the next two years; 97% state CX is critical to success.'”

In a subsequent article [“5 Predictions for Marketing in 2016“], McLellan concludes:

“Consumers now enjoy abundant choice and transparency thanks to search tools and social networks. As this erodes traditional product-based competitive advantages, marketers must look to new sources of differentiation. Most companies expect to compete primarily on customer experience in the next two years. In 2016 customer experience will garner the highest level of marketing investment; it is one of three areas in which CEO’s expectations of CMOs will increase the most; and bleeding-edge technologies to improve it will be the top innovation project marketers undertake. Marketers will lead the customer experience cross-functionally across all touch points in the majority of companies by 2016.”

If you are not already engaging with your customers in a meaningful way, you shouldn’t wait any longer to begin.