The Future of your Brand’s Success: Customer Experience Analytics
Brands have more data at their fingertips than ever before, giving them insight to personalized every step of the customer journey. Incorporating customer data touchpoints to improve their customer experience is essential in creating differentiation in today’s market. Even during a pandemic, consumer expectations are higher than ever: they expect to get what they want when they want it.
Brands need to be able to identify those critical moments within the customer journey to create a great experience in order to communicate effectively with consumers. This means that the marketing, analytics, UX/UI, and IT teams must be fully in sync to be able to utilize the data and data analytics tools. Being able to cultivate and identify the customer intent will amplify data and analytics strategies and drive new and better experiences for customer satisfaction.
For too long, brands have focused internally on their business functions—product, supply chain, customer service, and so on—to solve this problem.
Some organizations take a product focus and use customer experience data (like customer feedback) to generate value for themselves as airlines in developing loyalty programs and therefore improving customer retention. By leveraging customer analytics, airlines, and OTA (online travel agents) started to use data to drive dynamic pricing and reward their best customers with miles and points. Then if you look at the hospitality industry and their customer needs, they focus on extracting sustainable value using customer engagement and analytics to benefit guests. By surveying and tracking requests, they can anticipate the needs of guests for future stays at their properties – such as Marriott and Hilton.
As you can see, customer experience (CX) and CX strategy isn’t about anyone’s individual business function. Thinking this way can lead to brands having no idea what type of experiences customers find valuable versus annoying. You may never uncover a potential customer struggle through the pipeline unless you take CX improvement seriously.
Instead, the root of customer experience understands how the customer relates to your entire brand. Gaining that understanding, and using it to shape great experiences, is all about harnessing the power of customer data and analytics.
What Are Customer Experience Analytics
Customer experience analytics is the discovery, collection, and analysis of customer data for purposes of making better decisions via actionable insight, to the benefit of your customers and your business. These digital analytics allow for a more tailored hyper personalized experience for each of your customers.
Notice the definition of a customer experience analytics solution goes beyond just talking about KPIs—like email open rate, customer acquisition cost (CAC), % in-stock, or call center hold times. If customer experience analytics were just about the KPIs, the concept would be purely academic. You’d have a whole lot of information but wouldn’t be able to do much with it.
But in order to compete and win in this data-driven economy, brands must access and act on all their customer data with maximum speed, agility, and intelligence. That’s why the definition of CX analytics is bigger than just the numbers. To achieve customer experience analytics that truly makes a difference, organizations must rely on these three foundational pillars:
- Unifying customer data — Unification is about bringing together and matching granular behaviors across online and offline channels in real time, creating a single customer view. There are two dimensions of unification and play here. The first is bringing together the fully granular customer behavior data from all the different places where your brand touches customers—from the website, app, and social media through to direct mail, call center, and point of sale. The second is identifying who each individual customer is, and aligning their unique behaviors across all those touchpoints to a single customer ID. So we know who they are, and we know the history of their interaction with our brand, whether they’re receiving an email, placing an e-commerce order, or at the register in-store.
- Activating data in the real world — With the ability to activate data, businesspeople can orchestrate, test and measure experiences across all customer touchpoints. Every newly designed customer experience should be looked at as a starting point. Typically, it takes 4-5 iterations on that starting point to achieve the full value of a new experience. That’s why analytics play a role all along the way, allowing you to deploy, measure, refine and redeploy until your customers—and your business—gain maximum benefit from the personalized experiences you’re crafting.
Finding the Right CX Tools
Presented with the challenge of achieving the type of customer experience analytics described above, it’s tempting to go shopping for new technology as a solution. But the fact is, most organizations are already overloaded with tech tools. The average marketing department, for instance, has an astonishing 91 martech tools in use within their technology stack. According to Forrester, the average enterprise utilizes 5 different business intelligence (BI) tools (paywalled) alone.
The most challenging barrier to delivering on CX analytics that drives true customer-centricity is actually the need to integrate disparate systems. Integrating systems and data is a prerequisite to rendering the single customer view, along with analysis and activation capabilities needed to deliver great customer experiences. Getting it done—and orienting your technology around the customer as opposed to around your as-is operations—usually means a net reduction in tools as opposed to the addition of tools.
Achieving this goal to achieve your desired business outcome is all about re-evaluating your technology stack. While there’s no such thing as a perfect technology stack for everyone, there is certainly a tech stack that will be the best fit for enabling powerful customer experience analytics that put your customer at the center of everything you do.
As you plan your customer experience technology stack, be sure to prioritize the six core principles below to set yourself up for long-term success:
- Data democracy—It’s mentioned above and worth mentioning again. Businesspeople need firsthand access to the data required to make everyday decisions that improve customer experience and live up to the customer’s expectations.
- Self-service operations—Your customer experience teams will be far more productive and effective if they’re empowered with tools that let them own CX workflows from beginning to end.
- Full integration—You don’t want a marketer or business people spending cycles manually exporting, importing, or configuring data. Ensure your technologies include prebuilt data connectors—ideally real-time APIs—that make data ready for use at the moment it’s needed.
- Future longevity—A tech stack that won’t support your organization beyond three years from now is a short-lived analytics solution. Seek to implement technologies with features that fulfill today’s need as well as support tomorrow’s.
- Single customer view—To provide a seamless digital customer experience whenever (and wherever) a customer interacts, the organization needs a unified profile for each customer interaction.
- Centralized decision brain—Your technology stack should have a centralized decision-making function that can help automate analytics-driven customer experiences based on recent interactions and full customer behavioral history to ultimately reduce customer churn and nurture current customers to create customer loyalty.
The Benefits of Customer Experience Analytics
Over the last 20 years, customer acquisition costs (CAC) have grown 25% per year. That is very rapid, and very expensive, growth. Simultaneously, the average lifetime value of acquired customers has been either flat or on the decline, resulting in a lower average customer lifetime value. A tipping point has been reached where the dynamics of acquisition and retention are no longer sustainable: for many businesses, the value of a customer isn’t justifying the costs to acquire them.
A few key statistics illuminate why investing in CX analytics that drive better customer experiences is the answer to this challenge:
- 84% of consumers say experiences are more important than a brand’s product or services
- 66% of consumers prioritize experience over price
- 73% of consumers say a single extraordinary experience raises their expectations for all the other brands they interact with
- Brands who create the right types of experiences—those that are helpful and tailored to the individual—see a 20% lift in business impactm, read more on digital experience platforms.
For companies who can meet and exceed expectations for customer experiences, the opportunity is massive. With proper customer experience management, the customer customer lifetime value will grow, freeing up financial resources to invest in customer acquisition. Simply put, this equates to growth and greater market share. What’s more, by investing in delighting customers, and creating frictionless, helpful experiences, companies can raise the bar in the minds of their customers, enabling them to pull away from the competition with a lasting market advantage.