How to Invest in Customer Experience in 2016
Customer experience is still the marketer’s competitive battlefield but with a new approach.
Contributor: Chris Pemberton
The holiday online shopping season requires intense focus by marketers, and not just on the daily sales report. On the one hand, it’s “head’s down” to deliver on financial goals by year end. It’s when many companies make or break their numbers and the clock is ticking. On the other hand, it’s still “head’s up” to optimize the pre-and post-sale customer experience in a way that builds a profitable, competitive business for the long term.
This tension between short- and long-term thinking needs active management year-round. Marketing leaders need to constantly prove their value today while investing for long-term growth.
Marketing and customer experience leaders can balance their thinking to win the battle without the risk of losing the war, noted Jake Sorofman, research vice president for Gartner for Marketing Leaders.
The Gartner CMO Spend Survey 2015-2016 uncovered two insights that should guide how marketers approach customer experience.
Marketing leaders run the risk of winning the battle and losing the war.
Marketers are refocusing on shorter term opportunities
When asked what business leaders expect of the marketing function, marketing leaders noted that customer experience related investments ranked relatively low compared to last year. Why the change of heart by leadership? Customer experience is a broad mandate, encompassing all branded interactions, pre-sale and post-sale. As a consequence, investments in customer experience become hidden within other categories of spending. Customer experience then becomes everything. And with such ubiquity customer experience risks becoming nothing at the same time.
Delivering an exceptional customer experience increases brand preference, loyalty and advocacy which drives revenue and profit for the business but over the long-term. The urgency to deliver short-term results has redoubled interest in investments with a more direct line to revenue, often at the expense of longer term customer experience investments. By optimizing on short-term results, marketers risk losing focus on growing the lifetime value of customer relationships.
Look to balance short- and long-term investments while also building the business case for customer experience. Make sure investments are aligned to driving impact at a pace that matches business needs while also investing for the long-term.
Customer-experience-related investments ranked relatively low compared to last year’s highest rank.
Marketers are prioritizing technology investments for business impact
When asked to rank their top five marketing technology investments compared to last year, customer experience fell from first to 4th place while nearly two-thirds (64 percent) of respondents ranked digital commerce in the top five. Marketing leaders are emphasizing activities with greater short-term impact on revenue.
The data should spur marketers to look at their technology strategy and align investments to business impact. Work from a unified plan, prioritize investments, define key performance indicators and align investments and resources accordingly. Take a long view of customer experience technology strategy and focus on creating longer term customer value.
Gartner for Marketing Leaders clients can read more in ”Marketers Divert Customer Experience Funds to More Measurable Initiatives