SMG Media Futures: Customer experience is the opportunity of 2016, but can marketers own it?
- 17 February, 2016 10:35
From left: Andrew Caie, GM marketing, Subaru; Arno Lenior; Dr Karen Nelson-Field, director, Centre for Digital Video Intelligence; Iain McDonald, chief disruption officer; and Ed Harrison, CEO, Yahoo7
Marketing chiefs who haven’t taken control of leading customer experience should be reconsidering their career options, according to Samsung’s former CMO.
“If marketers aren’t putting their hands up to be custodians of customer experience at this stage, they should be fired,” Arno Lenior told attendees at the AANA and Starcom Mediavest Group’s latest Media Futures event in Sydney. Lenior was one of several industry figures participating in a panel discussing the annual research results.
“This is traditional marketing heartland. Marketers should be evolving to that position. That being said, the real question is around organisational purpose. Customer experience has to be right, but to do that, what is the purpose of the organisation? Once you have answered that question, your customer experience is owned by everyone, and your employees are as much about customer experience as those customers receiving it.”
According to the latest SMG Media Futures report, 51 per cent of respondents see customer experience as the most exciting opportunity for their company in the next 12 months, followed by content marketing (42 per cent) and big data (38 per cent). Customer experience was also found to be the most written about topic in terms of content shared.
Yet just 6 per cent of Australian business leaders believe they are implementing CX successfully, stating they have a ‘very advanced strategy’ and approach, and just over half say their CX approach was ‘not very advanced’. The biggest barrier was complexity of the customer journey.
Starcom’s national strategy director, Chris Vance, who presented the findings, said the definition of customer experience tended to fall into two camps: Those who saw it as a deeply functional capability, versus those with a more philosophical, esoteric understanding.
“There is a tension between this philosophy and function, and very few marketers got to a definition that bridged those gaps,” Vance said. But being successful means balancing the two.
Vance used Disney as a brand that has achieved both through frictionless experiences functionally, while also making the philosophical journey as entertaining as possible. Domino’s ‘anywhere’ digital strategy, focused on making every social touchpoint shoppable, was another example.
“We believe customer experience will be a critical factor not just in driving engagement with our audience, or for how we invest, but in driving growth for Australian businesses,” Vance said.
Subaru general manager of marketing, Andrew Caie, who joined the panel discussion, said he couldn’t argue against the need for customer experiences to be frictionless, or that the sentiment marketers share around the existence of customer experience was valid. But he challenged whether that is any different to what brands have always had to do.
“Customers probably haven’t changed the game, they’ve just moved the goalposts,” he said. “Essentially, all we have done through partners… and loads of data, is to know more about their customer journey. Now we just know so much more about customers, it’s up to us to try and react in the right way and address that.
“We have one things in cars, which is that it’s easy to know where the customer journey finishes – it either finishes in a bad experience and don’t buy, or they do and come back. But no one can agree on where it starts. That question is one of the hardest things for marketers to agree on.”
Panellists also questioned whether Domino’s approach to collapse the customer journey and make it simpler was risky. For Lenior, the key for marketers is to acknowledge there is a customer journey, and that they need to figure it out.
“The question most marketers don’t answer is defining what the customer experience is – what the product should be doing and then what role it plays on that journey,” he said. “Yes, there’s a risk of simplifying that customer journey too much, but at the same token, there is great benefit in simplifying because you can then figure out where those big nuggets are where you’re underperforming.”
Former Razorfish leader and co-founder of a new digital startup, Iain McDonald, identified a disconnect between the concepts of customer experience and user experience.
“User experience is a discipline tends to be confused with user interface design, whereas in actual fact user experience is the entire journey. CX and UX have to work in tandem as discipline,” he said.
McDonald also signalled we’re now in the era of customer-led technologies.
“We’re at the threshold of a staggering amount of new technology coming into the marketplace in the next two to 10 years… and we’re looking at innovation coming from all sorts of sources,” he added. “If you look at Gartner’s hype cycle for technology from 10 or 15 years ago, it was all about empowering business and creating infrastructure. Most of the things coming onto the market now enable consumer activity.”
Opportunities to overcome CX barriers
As part of the research, SMG identified three opportunities to overcoming customer experience barriers. The first was investing in the right assets at the right time, and Vance identified 2016 as the year for building owned assets and infrastructure that supported customer experience strategies and improvements.
Top of the list was websites, followed by mobile platforms and post-sale customer service. The top infrastructure investment, meanwhile, is expected to be data management platforms (61 per cent), followed customer analytics (59 per cent) and CRM platforms (57 per cent).
Planned spend growth also reflected the emphasis on customer engagement, with respondents highlighting social media, online video and mobile as top areas for shifting advertising spend this year.
At the same time, mass channel media partners are looking at a $315 million combined investment over 2016 and into 2017, ranging from smart panels to beacons and outdoor and interactive mobile experiences, he said.
Mass addressable media is also in the industry’s sights, and the SMG report predicted 2018 as the inflection point where addressable media becomes a reality and starts to drive growth.
But Caie cautioned against planned owned media spend and infrastructure investments, suggesting marketers could be missing the point.
“It just seems to be the more we spend on stuff to wall ourselves in and protect us from all the things we don’t quite understand, the better job we’ll do. Frankly, we should take a good look at ourselves,” he said. “We have to be careful we don’t disappear up the proverbial because we’re going to miss the customer, and they’re the ones driving the experience and determining the journey.”
Building skillsets for CX success
Yet it wasn’t technology Australian organisations were most worried about when it comes to improving customer experience. People and skills were rated the most important building block for marketers to create great CX experiences (78 per cent), just ahead of overall strategy (75 per cent) and company culture (75 per cent).
According to Vance, Australia is the only country to rate talent over technology in similar reports conducted worldwide.
Ownership of customer experience was also raised, with respondents predicting the rise of dedicated customer experience teams (from 6 per cent now to 17 per cent). Equally, ownership of the customer across the whole organisation is expected to rise from 20 per cent this year, to 29 per cent in five years’ time.
“What is clear is that CX being delivered across the organisation is the trend, it’s just marketers don’t know how to get it across the total business,”Vance said.
For Caie, people, knowledge and skills are the things that will unlock the technology, data and insights available to brands today about their customer.
“If you don’t have anyone to do that, creativity will disappear and we’ll become just like each other,” he claimed. “If the whole organisation doesn’t feel a part of that, there is going to be trouble. It may hide itself under significant marketing spend or digital investment, but it will catch up with you.”
Partnering for CX improvement was also seen to be an opportunity, and survey respondents reported data as the top building block (61 per cent), ahead of technology (52 per cent), systems and processes (48 per cent) and organisational structure (36 per cent).