More and more, brands and business execs are realizing that delivering a great customer experience is the key to winning and keeping customers—and more and more, whether you are selling a house or car, managing a supply chain or providing financial services, digital delivery of that experience is playing a significant role.
New research from the National Center for the Middle Market (NCMM) shows customer experience digitization is re-shaping the marketplace for middle market firms—and although execution is difficult, the rewards far exceed the challenges.
“The biggest challenge to digitizing the customer experience is capturing the financial return from the company’s investment,” said Thomas A. Stewart, executive director of the National Center for the Middle Market, in a news release. “Customer experience digitization is not streamlining processes digitally—it involves digitizing what customers see, feel, touch and do.”
Companies understand the importance of digitization, but efforts to make this happen have encountered a bumpy road. The study found that 74 percent agree that digitizing the customer experience is essential to growing or transforming the business to meet future business goals, 70 percent believe it’s the key to company growth, and 69 percent know that it’s essential for delivering a seamless customer experience.
However, many middle market companies have been slow to integrate digital solutions due to costs, and not being able to capture the financial return from the investment, as well as internal conflicts between digital and analog parts of the business. In fact, customer experience ranks second only to quality as a source of competitive advantage.
The research identifies four clusters of companies:
- Those who are not actively digitizing the customer experience
- “Defensive” companies that are doing what they need to do to keep up
- “Advanced” firms with strong digital CX aspirations but spotty capabilities and platforms, and
- A group of “strategic digitizers.” Companies in this group have a specific strategy for digital integration and have invested greatly in the necessary tools and talent to bring this strategy to fruition.
“For many companies, digitization of the customer experience is reactive, or just ‘happening’ without a clear path to drive it forward,” said NCMM managing director Doug Farren, in the release. “By developing a strategic path, middle market companies will have countless opportunities to transform the way they do business, which in the end will help them not only retain happy customers, but also achieve their growth goals.”
The study found that only 38 percent of middle market companies claim to be highly effective at digitizing their customer experience, and only 12 percent have achieved an end-to-end digital experience on all platforms. Generally, digital integration has grown quicker for managing back office functions and business analytics than for customer facing business functions, like sales and marketing.
The data substantiates that digitally strategic companies grow at a quicker rate. In fact, firms reported nearly 10 percent year-over-year revenue growth and 4.6 percent year-over-year employment growth, compared to non-digital firms who reported 4.7 percent revenue growth and 2.7 percent employment growth.
There is a strong correlation between the size of a company’s investment and a successful digital customer experience. The report revealed that 80 percent of middle market companies surveyed are currently investing in digitization and are being directed toward customer experience and interaction.
The National Center for the Middle Market surveyed 400 strategic decision makers from middle market companies who share responsibility for managing the customer experience. The Center designed the survey to understand how middle market companies view the customer experience, uncover what actions they are taking to digitize that experience, evaluate the impact of digitization, and understand the obstacles to customer experience digitization. Respondents completed the 20-minute, self-administered survey online between August 16, 2017 and August 28, 2017.