Almost every organization today is putting customer experience (CX) at the core of its strategy, aiming to provide products and services that meet customers at every touch point. In a crowded, multichannel marketplace, companies realize that a great customer experience — consistently delivering what customers want, when they want it — can be a powerful differentiator.
But many companies fail to deliver, according to research by Harvard Business Review Analytic Services (HBR-AS). Although half of surveyed business leaders say CX is a top-two differentiator for their business, just half of them said they perform well in it.
Although half of surveyed business leaders say CX is a top-two differentiator for their business, just half of them said they perform well in it.1
The problem isn’t access to data; most businesses said they collect mountains of information on their customers. The real obstacle to better customer experience, the research has found, is built into the way organizations share that data, analyze it, and work together.
Improving the customer experience is the end game, but getting there requires more than data. It requires the right data, from multiple channels, integrated to give a holistic picture of the customer journey. And that is where many companies struggle. HBR-AS found that fewer than a quarter of companies integrate customer data across channels to provide a single customer view.
Integrating data for customer value requires getting around organizational silos, which HBR-AS research has identified as the number one problem for companies struggling to improve their total customer experience. These silos prevent organizations from understanding the customers’ expectations at critical moments, and cultural resistance makes it tough to get the collaboration needed to solve the problem. As a result, respondents said the business doesn’t develop the right insights, get the information to the right people, or make the moves that could add real value.
Data-Driven Insight
By contrast, the study found that “best-in-class companies” — those with strong financial performance and competitive customer experiences — are more likely to have broken down those silos than are other organizations. And they use sophisticated analytics in a way that provides insights that open up the customer experience to the whole organization.
For example, at Progressive Insurance, the marketing team collected data on how mobile app users were behaving. These consumers, they discovered, wanted more than just helpful insurance quotes in the mobile app; they wanted to buy insurance on the spot. Progressive responded by giving them exactly what they wanted — the option to buy insurance — which vastly improved the customer experience and delivered a big win for the company. When a company creates customer value, the business benefits naturally follow.
Marketing Takes the Lead
But who is going to break down silos, connect the dots of the customer experience, and drive its improvement?
Today, marketing leaders need to make the case to the company that optimizing the customer experience requires breaking down silos and opening up collaboration, and shifting from a product-centric to a customer-centric approach, says Erich Joachimsthaler, author of Brand Leadership: Building Assets in an Information Economy. For example, a European beverage company assigns marketing groups to consumption moments, such as a night out, instead of brands and channels. The goal is to embed marketers deeply into a particular customer experience and focus them on each step of the customer journey.
“Marketing needs to connect the dots across all customer-facing functions of a company, including partners, in order to deliver real value instead of just communicating the brand,” says Joachimsthaler.
Robust analytics and insights have given marketing teams insight into how customers interact with brands, highlighting product preferences, purchase sequences, and so forth. And they reveal how top of the funnel marketing activities — such as an online display ad or TV commercial — tie in to in-store sales or an online website conversion. Measurement and analytics allow brand marketing and performance marketing to complement each other for the customers’ benefit.
Clearly the stakes are high, and marketing leaders and their teams are challenged to think in new ways. They don’t need more data; they need to find ways to identify and supply their organization with useful insights from that data.
Download “Measuring Marketing Insights,” a collection of Harvard Business Review Insight Center articles, to learn how companies are using data and marketing analytics to improve customer experience.
A version of this article first appeared as sponsor content on HBR.org in August 2016.
1Source: Harvard Business Review Analytic Services, "Marketing in the Driver's Seat: Using Analytics to Create Customer Value," 2015.
