In September 2012, Scott Brinker published his sophomore iteration of the Marketing Technology Landscape, a visual categorization of around 350 leading tools for marketers. For the first time, his research included a new category—Customer Experience (CX)—of which there were just six options.
Nine years later, Brinker’s visualization looks radically different.
The CX category has ballooned to more than 300 products and services—a 50X increase. The software segment is still growing, expanding 13.7% year on year.
Exploring Brinker’s most recent visualization—the Martech 5000 (2020)—reveals standalone tools for every CX pain point imaginable. One tool provides an AI-powered, self-service knowledge base. Another helps companies source, analyze, and understand customer feedback. A third offers analytics for a well-known chatbot. To reiterate: they provide analytics, not for all live chat products, but for one service in particular.
The glut of CX software is astounding.
Faced with literally hundreds of tech vendors, all promising better customer service, improved customer experience, and deeper analytics, it is easy for leaders to over procure. They add tools on top of tools, creating bloated technology stacks and eviscerating their budgets in the process.
To make matters worse, this isn’t a one-dimensional challenge. Resembling Aristotle’s Nicomachean Ethics, CX leaders can both over- and underinvest in technology. While overinvestment drives waste and bloat, underinvestment typically leads to poor financial performance.
What customer experience and service leaders need is a lens, a device through which to view, evaluate, and prioritize technology options on the market. Fortuitously, management consultancy Bain & Company provided just such an asset.
A lens for software selection
While customer experience is not a new function, it has developed at a breakneck pace during the past two decades. As evidenced by the rapid growth of increasingly specialized products, customer experience leaders now have the budgets and strategic autonomy to build large business units.
After laying the foundations in the 2000s and 2010s, leaders have turned their attention to more nuanced progression.
Modern leaders are leading with the assumption that the next decade of customer experience evolution will focus, not on the volume of experiences, but on the quality of attention. How can you deepen a customer’s experience? How can you strengthen their engagement? How can you elevate personalization to create individually-tailored journeys?
To understand what tools will move the needle, we can turn to Bain & Company’s latest categorization framework. Here, customer experience tools fall into four categories:
- Sense: Track, analyze, and understand your customers.
- Decide: Segment audiences, personalize communications, and prioritize customers.
- Act: Drive actions, engagement, and automation.
- Manage: Map customer journeys, source feedback, and monitor impact.
Although all four categories are crucial to creating an exemplary customer experience, there are some positioned to deliver outsized impact.
Consider the sense category.
For 18 months, the world has lived in constant flux and change. Working practices evolved at light speed. Personal routines changed overnight. Century-old industries disappeared. Brand new sectors appeared. Even companies with well-funded, mature customer analysis departments struggled to keep up.
As the dust settles, companies must understand the shifts in their audience and customer base. Without those insights, CX teams are interacting with silhouettes, hoping the real person resembles the customer they used to serve.
“To keep up with these evolving priorities at a decent level of specificity, companies are using sensing tools to listen to and track their customers,” wrote the Bain & Company researchers. Indeed, tools in the “sense” category show the strongest correlation between adoption and financial performance.”
Moreover, modern sense technology works across devices and customer circumstances. It gathers reams of new data and feeds it into a central data center. This information lifts the curtain on novel transaction methods, new content consumption behaviors, support request tendencies, and so on. Ultimately, it grants businesses a far more real, perceptual experience of their customer’s current disposition, replacing guesswork, assumptions, and conjecture.
Implementing CX technology
Although technology opens up new functionality and capabilities, it is rarely a silver bullet to organizational woes. Implementing a new tool will rarely, by itself, improve a company’s productivity or accelerate its growth. To drive impact, leaders must thoughtfully evaluate technology and drive a meticulous implementation.
But successful change starts long before the software selection process or implementation phase. Indeed, the impact starts with the underlying process, policies, and procedures.
1. How to create a firm CX foundation
Before investing in new sense technology, organizations need a strong Voice of Customer program. Without such a framework, there’s no way to understand new audience data.
For example, say you roll out a new online behavior tracking system and it reveals your website dwell time is four minutes. On its own, that data point is meaningless. It’s neither good nor bad. But if you correlate that data to NPS or CSAT metrics, you can add context. Perhaps a higher dwell time leads to higher satisfaction. Or maybe it’s indicative of a frustrated customer journey.
But the technological factor of a Voice of Customer program is only half the equation.
Programs thrive when they have a strategic voice as well as a technological foundation.
“Your Voice of Customer program has to be part of the way your company makes decisions,” explains Jason Bradshaw, former Volkswagen CCO, and CMO turned customer experience author. “It needs to be part of the operating system or the DNA of your organization. Otherwise, new metrics don’t necessarily drive customer outcomes.”
2. How to select new sense technologies
Assuming an organization ticks all the preliminary boxes, they can move onto software selection. Faced with a barrage of tools and services, choice paralysis is real. Should you invest in sentiment analysis or facial authentication? Wearable sensors or in-store sensors?
Here, Bradshaw has a question to direct your search: “What piece of data is currently missing from your Voice of Customer program.”
Consider a weather forecasting company. With people visiting the website, checking the forecast, and leaving, they typically have very short dwell times and very high bounce rates. For most other businesses, that would be a sign something is going wrong. Not so here. What their Voice of Customer program needs is a way to evaluate customer satisfaction—NPS or CSAT surveys.
“The first question you need to ask is: what piece of data is fundamentally missing from enabling you to make fast decisions that amplify the performance of your business with your customer lens?” says Bradshaw.
Once they have identified a tool or category, the next step is integration.
“Installing more tools alone doesn’t increase customer lifetime value or make customers’ lives easier,” wrote Bain’s researchers. Their research discovered that the best returns follow from tools that are deeply integrated within a broader IT system or other tools.
For example, tools connected to an ERP system boast an 87% satisfaction rate compared to 73% from standalone technology.
Bradshaw, too, extols the virtues of integration and connection. But he challenges businesses to consider, not just how Voice of Customer services communicate with each other, but how they work with operational (sales, marketing, customer success, finance, and so on) services, as well.
The final consideration for new sense technology is blind spots. Ask potential vendors to explain where their data source can send organizations down the wrong path. Dwell time is a good example as it has different implications for different businesses. A budget grocery store does not want customers loitering. They want people in and out as quickly as possible. A high-end fashion brand, on the other hand, wants customers in their stores for as long as possible. Here, high dwell times correlate to higher conversion rates.
If a vendor is unwilling or unable to provide blind spot insights, it’s a red flag.
3. How to map and measure outcomes
“Measure what matters!”
That’s Bradshaw’s rallying cry for fellow CX professionals. It’s easy to get hung up on data and fetishize metrics for the sake of metrics, he says. But customer experience isn’t about studying time on-site or showroom traffic. It’s about customer outcomes.
Consider dwell time for a retail chain, he suggests. Say you discover that the best-performing stores with an NPS of 50 have a dwell time of five minutes. Don’t just report that. It’s meaningless.
“You need to go to the next level,” he says. “Connect to data and say, ‘These are the three things that set the stores apart. These are the three things that positively contribute to dwell time. These are the three things that positively correlate to a customer’s likelihood to refer.’ Just reporting a dwell time of five minutes doesn’t mean it’s a good experience.”
Don’t just report data. Connect to data to cull patterns that link to good customer outcomes.
Innovation, evolution, and adaption
It’s an interesting experiment to look back at the 2012 installment of the Martech 5000—then just the Martech 350.
Of the six customer experience tools listed, only a handful are still independently operational. Some are defunct. Others were acquired. Today’s CX landscape is wholly and significantly different from the one depicted in that illustration.
Likewise, the most recent iteration will be rendered irrelevant by the version arriving five or ten years from now. Leaders can not—and should not—seek to future-proof their technology stack. Instead, they should stay open to innovation, evolution, and adaptation. By remaining receptive to change, organizations can stay at the bleeding edge of great service, delivering the strongest experience possible.