As part of CMO’s prediction series, we asked businesses, marketing and CX leaders, vendors and analysts to share their top CX predictions for the new year
As gaps between data and systems, cross-functional teams, and companies and their customers grow, HubSpot marketing director APAC, Kat Warboys, sees the heart of the problem stemming from the same place: Increasing difficulty to build strong connections. In the vendor’s recent pulse survey to understand the biggest challenges businesses are facing, the number one pain point was disconnected systems.
“New ways of working between proliferating systems, leading to disconnected data; siloed teams, leading to internal friction; and companies and their customers, leading to disjointed experiences; are forcing businesses to reimagine how they attract, engage and delight their customers,” Warboys says.
“We can expect to see this disconnect evolve into an evergreen issue, as our recent study revealed approximately one in four companies citing a lack of depth in relationships with customers as one of their top challenges this year. This makes it clear the strategies businesses relied on in the past won’t cut it moving forward.
“As we move into a new year, businesses need to rethink their go-to-market strategies, starting by identifying the different systems being used in your organisation by your customer-facing teams. How many are there? Do your teams have a single source of truth to understand your customer from?”
Growing tech complexity, combined with renewed focus on efficiency and cost, has Forrester predicting one-third of point solution CX tech providers getting acquired by platform players next year.
“The past two years have witnessed an uptick in acquisition of these companies by larger tech providers trying to fill out their own offerings, absorb innovative competitors, or enter new markets — like Medallia’s purchase of Mindful and Adobe’s bid for Figma,” Forrester stated in its 2023 Predictions report. “Two factors will drive acquisitions to a fever pitch in 2023. One is many companies’ desires to have best-in-class solutions within a single platform. The second is low selling prices for point solution providers struggling due to economic trouble and a crowded CX tech market.
“However, acquisition-prone platform players risk backlash by the end of 2023 if clients perceive that they’re unable to integrate their acquisitions, are unwilling to modularise offerings for buyers who don’t want an entire platform, are charging too much, or are struggling with lacklustre relationship management.”
Providing underlying capability for Freshworks director and country manager A/NZ, Ben Pluznyk, is composable architecture, or functional pieces of an application or process that can be combined, separated and reused across applications.
“Since the Covid-19 pandemic, businesses have witnessed how customer needs can rapidly change and with composable applications, businesses can easily build and scale applications to drive differentiated and hybrid experiences, delivering unique value to customers. Customers now expect real-time, personalised customer support interactions,” he says. “Businesses need to invest and leverage applications and platforms that help them stay agile, proactively predict customer needs and be reached across multiple channels. Composable applications are the way forward to help businesses readily evolve to better manage and support change.”
One of the less sexy but important aspects of CX is identity management. Australia’s recent data breaches have only heightened consumer attention on how personal information is stored, used and protected. As organisations work to provide holistic experiences, dealing with customer identity management is only continue escalating as a priority.
“Customers are going to demand their personally identifiable information is properly secured or they will walk to a competitor,” warns BeyondTrust director of marketing Asia-Pacific and Japan, Peter Vasey. “Up until now, consumers hoped organisations did the right thing by them and their data. Now, they are going to demand it. At the same time, state and local governments can no longer look the other way, with the NSW Government leading the charge in recently passing legislation covering data breaches.
“As a result, organisations are going to have to lift their game around data and how it is secured. That means marketers will need to work with their IT security team to review access to the data, who really needs access and for how long. While marketers don’t need to become cybersecurity experts, they will need to have a greater understanding of cyber hygiene and work in partnership with their cyber experts within their organisation.”
Ping Identity VP of product and solutions marketing, Dustin Maxey, positions registrations, login and other things associated with identity are often in the way of getting to the products and services people care about.
“But that doesn’t mean they aren't important. On the contrary. Since registering and authenticating users is required, it means identity is critical to get right,” Maxey stresses. “Businesses in 2023 have to decide what risk signals they can assess, how they target and stop new account fraud, account takeover and other fraudulent activities, and how to do it all with minimal user interactions.
“Missing on fronts like social logins, password policies best practices, how to recover accounts conveniently and securely, using other devices to authenticate with standards like FIDO [fast identity online], how to facilitate customer privacy and the sharing of their data with third parties often aren’t addressed properly and can drive customers away. This creates a vast contrast between companies operating at the status quo and those going above and beyond. That difference results in tangible top-line impact.”
Twilio regional VP A/NZ, Kristen Pimpini, is another advocating security be embedded in the customer experience. “While undoubtedly the number one priority for brands next year is to keep customer data secure, brands also need a plan for when – not if – they are attacked,” he says.
“We will see greater transparency in terms of how brands communicate around security in 2023. It will become an extension of the overall customer experience, and brands will need to apply to it the same level of personalisation they apply to all digital marketing efforts. Consumers will need seamless interaction, access to support and also a tailored approach as to how their relationship with that brand moves forward post breach.
But while trust will be the pinnacle of the customer experience moving into next year, it’s also more than security measures for Maxey. “Brand trust is built over time, through meaningful and personalised interaction. Consumers will be more likely to weather the storm with brands that have built trust and will judge brands more on how they act post a security breach, than the breach itself,” he says.
“Customers expect businesses to treat their data with respect. You can see evidence of this by looking at companies like Apple, which actively pushes for privacy in its marketing campaigns. Both the pressure for regulations, and the trends of companies more outwardly advocating for customer privacy are coalescing to form this trend. It's not a trend that began in 2022 per se, but it is continuing to progress, making it more prominent than ever.”
For Cognizant area VP of marketing, Bernadette Conlon, 2023 represents a litmus test for CX professionals after three years of what she describes as a “Covid-induced hiatus on customer obsession”.
“Those CX leaders who wish to remain relevant will take bold steps that place their brands in front of the pack, and be focused on proving the ROI of their actions. As such, in 2023, success for CX professionals and brands will come to those who turn data into actionable insights that enhance execution and facilitate innovation,” she warns.
“Many CX leaders have made incremental adjustments to their strategy and been able to demonstrate outcomes to the business. As the economy tightens, proving the ROI of CX strategies will be more important than ever.”
The challenge Conlon highlights for B2B brands is tapping target audiences to access to gain a full, 360-degree view of market helping identify gaps that will “transform the business and potential revenue streams as opposed to ‘incrementally improve it’”.
If you can find the bolder ideas, you’re more likely to gain support, Conlon adds. “Innovation necessitates CX professionals plan ahead of time how they will demonstrate the ROI of their programs,” she says. “Taking this approach into 2023 will result in operations being streamlined across channels as attribution-led decisions are being used to drive better results and indeed earn the right to larger budgets in the future.”
Switch MD, Andrew Davenport, perceives a doubling down on optimised customer experience delivering business results in 2023.
“With the general economic outlook hardening and difficult to predict, we expect large-scale technical investments to be under increased commercial review and potentially deferred. Company boards will also be doubling down on driving return from investments already made,” he predicts. “If you have already been investing in CX and made headway, expect that to be about optimising and reporting results. If you haven't, expect to perhaps start smaller, optimise and double down on results focus for reporting and continued funding.
“Businesses aren’t going to stop investing in customer experience or technology. But I believe they will take their learning to date of what has or hasn't worked and focus on results perhaps before continued transformation or larger strategic moves.”
Cementing this view is Forrester, which predicts one in five CX programs will disappear next year. Those remaining will have to work differently as CX differentiation erodes.
“The challenges of 2022 — when companies lost their customer focus amid rising customer expectations and a worsening economy — will create an inflection point for CX programs in 2023,” the 2023 predictions report states. “CX programs that help organisations achieve their brand aspirations — and have the data to prove it — will thrive despite corporate belt tightening. Other programs will wither since they’ll no longer have a strong economy to buoy them. This will surprise many CX leaders, given a shockingly high 82 per cent of them expect their budgets to rise next year.”
The analyst firm see CX teams forced to transform as a result, with 20 per cent disappearing and 80 per cent lacking essential skills. A further shift Forrester predicts is from strategy to proactive service recovery.
“The estimated 80 per cent of companies for which great CX is not part of their brand identity will finally demand proof spending on CX improvement is necessary, and some of these companies will dissolve CX teams that can’t show numbers,” Forrester warns. “That’s bad news for the 54 per cent of CX pros who said their teams are unable to prove the ROI of their projects.
“In contrast, the 20 per cent of companies that embrace great CX as part of their brand identity will reward CX teams that can show positive ROI. The leaders of these teams will join the one-fourth of their CX leader peers who already sit in the c-suite. They’ll also gain direct control of teams to which they previously had only dotted-line connections – like customer success or the contact centre – and earn larger budgets for personnel, technology, and project work.”
It’s not just the boardroom that’ll be asking about value in the new year. It’s anticipated customers will be actively assessing the value gained from experiences with businesses next year.
Yotpo senior marketing manager, APAC, Carmel Zein, reckons on everyone knuckling down on retention strategies as the cost of acquisition goes up. “Loyalty programs have never been more appealing and for good reason. Building brand affinity and creating communities will continue to drive growth for thriving businesses in 2023,” she says.
“It’s not just about having a program in place. It’s essential to survey your customers to understand what they actually want to see from you in order to create alignment in values and tie it into the entire customer experience.”
GfK head of consumer intelligence and consulting A/NZ, Mitesh Khatri, puts a positive spin on the values conversation, saying 2023 is about finding opportunities as brands, “not excuses”.
“In 2023, ‘values’ should form the guiding principles of every marketing and sales strategy to drive better customer experience. In fact, GfK’s recent research shows 62 per cent of consumers say they only buy products and services that appeal to their beliefs, values or ideals,” he notes. “The cornerstone of who we are, our values influence how we see the world.”
Khatri itemises four ways of building deeper emotional connection with consumers. The first is values guide principles beyond demographics. The second is recognising values ground innovation at a deeper level in an organisation. Values also strengthen messaging connections and are key to differentiation and portfolio management.
“Australians value honesty, protecting family, authenticity, freedom and enjoying life the most,” Khatri says, citing GfK studies. “Australian consumers love their freedom. They’re pleasure seekers. Material security is important to them. They want to enjoy life. Health and fitness are very important to them. These personal values drive their thinking.
“Brands tend to do well at understanding category predispositions based on consumer needs, attitudes and predispositions of choice. However, brands don't do very well when understanding those implicit, deeper values that are held — the things that have the power to build a stronger emotional connection with consumers by addressing their deeper, underlying implicit forces of choices.”
Summing up these trends, Twilio’s Pimpini says effortless interaction has become key to retention and CX success.
“Next year, we’ll go back to the basics of good CX. Know who your customers are. Address their needs. Allow them to engage digitally and on their channel of choice, and pivot to a voice call to escalate and provide that ‘concierge’ feeling,” he predicts. “There will be more stability in terms of understanding what effortless customer experiences are, and how to create them. Technology will be a cornerstone of this, with businesses reviewing and refreshing the technology investments made through Covid to see what sticks. Many businesses will also be looking to buy a platform that they can build and iterate on, versus building it from ground zero.”
Want to also read up on our 2023 digital marketing predictions? Check out our article here.
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