Pega Research has released its latest report titled: The four false narratives of customer experience (registration required). It highlights how the internal battle between IT and the Business Unit is impacting the customer experience (CX). The message will worry may organisations who are well into digital transformation plans that are designed to improve CX for users and customers.
According to Tom Libretto, chief marketing officer, Pegasystems: “This study demonstrates that while many organizations see the value of improving customer engagement, many still need to understand that they can’t just purchase technology such as analytics or AI and expect it to be a panacea to all of their problems.
“Instead, a new, more thoughtful, strategic approach is required. Companies need to look at their customers in a completely new way – as equal partners in a very complex, real-time relationship. They have to earn the right to that relationship every single day, which requires change at the very top of the business, driven by empowered C-level leaders who are willing to re-architect their core business around the customer.”
Pega calls out Four False Narratives
The Pega 2020 Global Customer Experience Study is based on a large response set. Pega had over 5,000 CX practitioners participate over 12 countries and 7 industries. With most reports having less than 1,000 responses, this gives the report more validity than many others.
The first surprise from the report is the four false narratives that it highlights. They are:
- CX doesn’t need executive sponsorship.
- CX should be run by IT.
- We are already customer-centric.
- Improving analytics is a priority, but not the top priority.
There is more detail on each of these in the report. However, just looking at them should give immediate cause for concern. For example, the thought that there is no requirement for executive sponsorship. Without that support, it is hard to prioritise changes and get the budget. This also makes it harder to get different departments aligned.
It is easy to see why IT thinks it is best placed to run CX. It is also the core of the analytics function with the data science team often part of IT. The problem is that neither is a customer facing function. This begs the question of how you can design an effective system with no direct contact with those who will use it.
CX requires constant investment and change
The way customers interact with organisations changes over time. Having advertising flyers pushed through a post box ceased to be effective for many organisations years ago. Only some real estate companies and local fast food companies with delivery services really see a return on it.
Email advertising is regularly marked as spam, especially in businesses. Online advertising is rife with fraud and is constantly being hijacked by cyber criminals. This has resulted in the rise of the Ad Blocker which is causing some sites to ban access unless people turn ad blocking off. Social media, once the projected saviour of the advertising industry, is also struggling with reputation and proven returns.
This means that CX needs to be a fluid thing, not something that once coded, just gets updates and a refreshed UI. If it doesn’t adapt to the way consumers look for data, they won’t connect.
Respondents to the report highlighted a lot of this. There are concerns about a consistent experience across channels. There was also significant concern over the long-term viability of any CX solution. IT systems are still, in the main, designed to run and be in place for the medium to long term. CX has to adapt to changes in the market and especially changes forced by competitors. 58% of the respondents said that their CX will be outdated in just two years.
Analytics will save us – long live analytics
The report quite rightly takes a close look at analytics and what they offer. Organisations have invested heavily in getting a better understanding of the cost of capturing and converting a customer.
Many organisations are moving their customer engagement away from the wider broad blast approaches to personalised approaches. These require more access to data in order to correlate what a customer does and how best to “catch them” at the right moment for conversion. But, the spectre of every more restrictive access to online data through privacy laws adds to the challenges.
This is where analytics, in particular, have a real benefit. Yet few organisation have real-time analytics solutions in place. It can be argued that marketing doesn’t need to be real-time but that depends on how much you want to personalise across multiple channels. The better the integration of systems, data and customer profile, the easier it is to ensure they get the best and most accurate experience.
One question always comes up with analytics and that is: “Can AI do this better?” The report addresses the role of AI and singles out healthcare. It is currently lagging behind other industries. One reason for this is regulations, especially around data sharing and use. Another, and one that was surprisingly not mentioned in the report is cost. Healthcare in many countries is data rich and cash poor. This makes implementing machine learning and AI tricky if only because of the problem of attracting the right skills.
Enterprise Times: What does this mean?
The core thrust of this Pega research is that organisations must tear down the walls between these two parts of the business if they want to be customer centric. The reality is that tearing those walls down is hard. Internally, many digital transformation projects struggle for time, money, direction and innovative thinking.
IT has been under pressure to be more customer focused for at least two decades. The problem it sees is the need to balance stability of core systems with demands for new applications. It often resorts in a new UI to make applications “easier to use” rather than innovation. This creates friction with business units who have flocked to the cloud and Software as a Service (SaaS) vendors. This has created other problems for IT especially around data privacy and security.
Customers don’t care about internal struggles. They want fast and reactive solutions. Systems that are responsive to their requests and work across any device and method of engagement they choose. They also care about privacy and those big companies that have failed to realise this have suffered after data breaches.
If organisations are going to become seamless and deliver the best-of-breed adaptative CX, it has to start, as Pega points out, with a C-level sponsor. Without that, internal politics will continue to degrade the CX.