Evidence indicates that CX budgets could increase in 2023, despite the economic conditions. But customer experience leaders need to be more prudent with their investments than ever before.
With 2022 coming to a close, customer experience leaders will be deep in planning for the coming year. And while this comes against a backdrop of economic uncertainty, early results from MyCustomer’s CX leader survey indicate that the vast majority of customer experience leaders expect their 2023 budgets to either be remaining stable or even increasing.
These findings reflect similar results reported by Forrester - whose research revealed that a whopping 82% of CX leaders predict that their budgets will rise in the next 12 months. But while this is heartening to hear, the economic uncertainty means that CX leaders need to be more prudent with these investments than ever before.
As Forrester vice president Rick Parrish has noted in a recent blog post: “CX leaders must invest to maximize the ROI of their CX programs. Those who don’t will find their budgets slashed — especially if economic troubles persist.”
So where should customer experience leaders focus their investment in the coming year? We asked a panel of CX commentators for their thoughts on what should be prioritized in 2023 budgets.
Invest in optimising your digital customer experiences
Driving growth for your brand is going to be tougher in 2023 than 2022," warns Rajesh Midha, CEO of Bottle Rocket. "With a recession forecast, customers will have less discretionary spending money to play with, making customer experience more important for businesses looking to maintain market share. Customers searching for good value in inflationary times will gravitate towards the businesses that make the buying experience a pleasure. Consequently, we’ll likely see a customer experience contest between rival brands who recognize that continued investment in CX is required just to stand still. With less opportunity for growth, CX initiatives that focus on better conversion, engagement, and retention will win the day.
"In particular, CX leaders will continue investing in their digital experiences in 2023, despite a possible downturn. Digital experiences within a holistic omnichannel marketing strategy allow customers to more deeply experience a brand, whatever their preferred channel. During the pandemic, customer experience became almost entirely online as CX leaders threw money at digital to catch up their capability and meet customers where they were. Now, in a tough market environment, we will see an emphasis on optimizing those digital customer experiences. Heads of CX recognize the business value of decreasing churn and they’ll be looking to refine their digital infrastructure to achieve this. By investing in optimizing “buy-flow”, for example, the shopping journey is immediately smoothened and a brand will see more customers returning as a result.’
Focus on customer journeys
“Brands must balance the creation of efficient experiences for non-revenue generating interactions, e.g. cancellations, refunds, returns, collections, that will see a surge of demand, with value-generating interactions,” says James O’Hare, MD of LINK Mobility UK
“As such, they need to make tangible improvements to the customer journeys, like introducing self-service models that remove 90% of the routine inquiries and service demands, creating the bandwidth to deal with the more complex and potentially more emotional 10%.
"Without a centralized data model, companies are unable to capture the demand and constant changes in customer needs."
Of course, organizations with poor data sharing and collaboration systems in place will never be able to fully capitalize on their customer data banks – a point that those organizations polled seem well aware of, with 67% of companies stating that they are changing the way they store/structure customer data to improve their CX capabilities.
Andrew Stevens, Principal at Quadient, notes: “It is vital for organizations to focus their investment into making better use of their customer data. As we enter a period of economic turmoil, customers will become more selective about where they spend their limited cash, and so will choose the business that truly understands and knows their needs. In many organizations, customer data is siloed between teams, making it time-consuming and expensive to access key information across different channels. In practice, this can mean customer service teams are unable to access a customer’s communication preferences or purchase history, and these ‘blind spots’ can lead to irrelevant marketing communication and nuisance calls. To avoid this, organizations should invest in technology that supports an omnichannel strategy."
An investment in centralized data models appears to be one recommended course of action, allowing information to be collected in one place so it can be easily shared and used by people throughout the organization.
“A centralized data model is critical – it provides greater efficiencies, less risk, and greater levels of normalization. Without a centralized data model, companies are unable to capture the demand and constant changes in customer needs,” suggests Ari Lightman, professor of digital media and marketing at Carnegie Mellon University in Pittsburgh.
The virtues of centralizing your organization’s data are also supported by the survey respondents, with 37% stating that they are in the process of introducing a centralized data model, and 29% saying that they are planning to implement one.
Focus on the basics…
“When you’ve been in business long enough to have lived and worked through a recession (or two) you have your own personal experience to fall back on when it comes to the best strategy to successfully get through this next one,” notes Justin Finnegan, EVP of services at Conexiom.
“First, when the economy slows, an organization must prioritize its investments around those structures and processes that keep existing customers happy. Times of recession are also times of de-risk for businesses, where undefined and untested initiatives should take a back seat to what is known and proven. An enduring way of maintaining customers and creating loyalty is prioritizing their orders, guaranteeing they feel satisfied and are never left guessing about the status of your products or services.
“Companies that deliver to their customers - when everyone else is making them wait - stand out in the best way. And a satisfied customer will spread the word - potentially bringing in new customers along the journey.”
…Or be ambitious and explore immersive CX
“2023 will be the year that immersive experience moves right to the core of the CX offering for progressive businesses. Innovating in this space – and integrating those innovations seamlessly into the CX journey – will be the winning move for businesses across all sectors,” predicts Michael Chadwick, head of strategy and experience at Cheil UK.
“Digital acceleration triggered by the pandemic has already led to a huge uptick in real-world applications of immersive tech to customer experience (such as AR, virtual product demos and service), but now is the time for businesses to truly commit to this new frontier of customer interaction. Why? Because leaders in every category will be driving paradigm shifts in CX by doing so. And, just as importantly, because the next generations of consumers will expect it. This is not future-gazing, but today’s reality – businesses are investing and scaling in this area now.
“When looking at this space, it’s easy to focus on the tech side of the conversation – but actually the main thing businesses should focus on is the human need that the technology can help meet. The key question to ask at this point is: how can immersive interactions help our customers, and make their lives better?
“There are two main answers to that question. On the one hand, immersive solutions can take brand engagement to a whole new level by adding hugely impactful experiential elements to the mix – making brands more fun, more entertaining, and indeed more accessible. On the other hand, the potential of immersive CX can answer a less spectacular but just as critical need: making the customer experience as simple, seamless and efficient as possible.
“This is where the word ‘integration’ becomes crucial. Too many immersive CX applications to date have felt disconnected from the core customer experience - add-ons or sideshows rather than truly integral to a customer’s interaction with the organization. Immersive CX elements must integrate with all the other touchpoints and channels we have to ensure customer convenience: the ability for us to interact with a brand from whatever device we happen to be using at any given time, in the right way, through the right channel, and with the right level of immersion. As customers, we need to be able to dive deeper when it’s useful for us – think virtual try-ons and AR service support – but keep it simple at other points, and not be forced into immersive interactions when they’re superfluous.”
Originally published at MyCustomer.com