Why 75% Brands are Changing their CX Data Strategy
Learn from Jen Bailin how to build a customer data foundation to deliver seamless customer experiences in today’s fast-changing business environment.
While companies realize the importance of customer experience, most find it challenging to deliver the expected experiences. To achieve it, companies are rethinking their CX data strategy and technology. Jen Bailin, chief revenue officer, SAP CX, discusses how to build a customer data foundation connecting front-office engagement with backend business processes.
As technology leaders, we know that the delivery of personalized customer experience is key to unlocking revenue, reducing churn, and delivering growth. Delighting today’s customers is not easy. It takes people, processes and technology coming together to get it right. And despite organizations knowing the importance of customer experience, many are doing an inadequate job of using and leveraging customer data.
There is a paradigm shift happening in the world of customer experience (CX). According to a recent survey conducted by Harvard Business Review Analytic Services (HBR), in association with SAP, nearly three-quarters (71%) of brands are looking to alter their CX data strategy due to changes in customer needs.
Indeed, the pandemic has changed how people engage and interact with brands and who they trust. Customers are looking for meaningful relationships with brands.
And yet, there is a huge disconnect between what brands hope to do with customer data and what they can actually do. Today, companies are tasked with balancing the differing types, amounts, and speeds at which they receive data while keeping up with consumers as they alternate between various channels.
The HBR survey mentioned above found that 99% of respondents said integrating customer data into their business processes is important to remain competitive in their industry. Yet only 17% said they were very successful at doing so. In addition, 94% of respondents say that being able to keep CX consistent across customer touchpoints is important to their organization. But just 42% agree that they are able to do this now. Companies are seeing these shortfalls impact their business in tangible ways.
This stark disconnect between what brands know they need to do and what they can do today is causing many to fundamentally rethink their technology.
I believe that technology can improve brands’ agility, flexibility, and scalability so that they can generate meaningful business outcomes from their customer data. As such, I have taken a closer look at the survey data to help uncover insights and strategies for building a customer data foundation that connects front-office engagement with backend business processes.
See More: Lessons General Motors Teaches Us on How To Become Customer-Centric
Centralized Data Models Are the Future
Given the gap between what companies want to do with customer data and what they can actually do, I anticipate a shift in where organizations focus their spending when it comes to customer data and analytics insights.
For starters, brands will invest in a centralized data model to make data stores more scalable and to become more agile and flexible in their CX strategy. Doing so will allow information to be collected in one place so it can be easily shared and used by people throughout the organization.
The HBR survey data showed that in the next 12 to 18 months, 60% of companies would boost spending on customer data and analytics insights. In addition, 50% of respondents surveyed are in the process of implementing a centralized data model.
In addition, I believe that leading companies will move beyond long-term metrics like customer satisfaction, customer lifetime value, and average handle time to more nuanced metrics that aim to uncover the true behavior of customers. The shift in metrics, and the investment in these technologies, reflect that companies are committed to using digital tools in a more transformative way that will ensure the centralized data can truly be impactful and in reaching business goals.
But a centralized data model should go beyond simply collecting data. It should be leveraged to activate and generate revenue as well.
Companies should be looking to bridge the gap between IT’s vision of a customer data model and the CX team’s vision through the use of centralized data platforms, or CDPs. These platforms are software that aggregates and organizes customer data across all the touchpoints and interactions a customer has with a company’s products and services.
CDPs have largely focused on personalizing experiences in marketing and advertising. But the market is rapidly evolving, and CDPs are going beyond marketing to power CX-wide touchpoints in Sales, Service, and Commerce. Looking toward the future, data from the backend of business processes (ERP) will power the front end of customer engagement.
The CDP must securely and easily connect to supply chain data, inventory data, and other kinds of data that forge the customer experience. This ability is at the heart of solving the data silos and lack of collaboration that are frustrating companies’ use of customer data today.
See More: 6 CDP Trends Marketers Should Be Aware of in the Near Future
Taking Centralized Data One Step Further
In my conversations with customers, I am seeing the emergence of a new era in customer data management: the enterprise CDP. This technology concerns itself with connecting the back end of business processes with the front end of customer engagement. We see the potential for leveraging supply chain, manufacturing, and financial data to supercharge how businesses and customers come together.
With enterprise CDP, your company can:
- Generate stronger business outcomes by augmenting customer insights with new sources of data from backend systems such as enterprise resource planning (ERP) and supply chain.
- Inform business decisions and engagement strategies using a centralized data model that prioritizes first-party, permission-based customer data.
- Improve your ability to address data privacy and scale into new regions using a centralized approach to customer identity and consent and preference data management.
This path forward will necessitate stronger privacy and preference management, more pervasive intelligence and automation, and real-time capabilities to meet the highest aspirations of today’s modern technology leaders and facilitate what it takes — people, process and technology coming together — to deliver consistent and impactful customer experiences.
Conclusion
Rising inflation and changing macroeconomic headwinds are causing consumers to be even more selective in how they spend their money. At the same time, customer expectations are continuing to rise. To meet those expectations, leaders must reevaluate their companies’ CX strategy. By adopting a centralized data model and enterprise CDP, companies will become more agile and flexible and ultimately create better experiences for their customers.
How have you evolved your CX data strategy to deliver seamless experiences to your customers? Share with us on Facebook, Twitter, and LinkedIn.
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