If organizations want to be leaders in customer experience, they must start with data, Forrester and Deloitte found.
The secret to winning on customer experience is data, a Forrester and Deloitte report found. While data is critical to achieving positive customer experiences, companies face challenges with accumulating and handling this data, according to the report.
Deloitte's What is the secret to winning on customer experience? report, conducted by Forrester, surveyed 425 customer data decision makers in the US to determine how companies are competing and winning at delivering positive customer experiences.
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In the next 12 months, the top priorities at organizations include improving customer satisfaction (85%), winning new customers (82%), increasing profitability per product/service (81%), and improving data management and activation (80%), the report found.
To help organizations best take control of their data, the report compiled the following three key takeaways, which unveil the challenges and benefits of data-driven business decision making.
Three keys to winning the customer experience
1. Complex data structures affect customer experience
With data coming from so many sources and housed in a variety of in-house tools, companies have trouble keeping track of all their data.
On average, organizations said they have 17 different technology applications leveraging customer data and use an average of 28 different data sources for generating customer insights and engagement, the report found.
The reason for these disparate data sources include company acquisitions, organizational silos, pathwork of existing systems, competing priorities, growing customer expectations, and more. All of these factors contribute to the fact that only 38% of companies said they know where all of their customer data is stored, according to the report.
In trying to determine the maturity levels of respondents' data management practices, the report named 33% of respondents as leaders, another 33% as transitioners, and 34% as laggards. These findings show that the majority of respondents are still on the road to data management maturity.
2. Collecting and connecting data are key challenges
Data management is also difficult for organizations because they have trouble adequately collecting and connecting data, the report found.
Across maturity levels, companies lacked real-time report capabilities (45% leaders, 42% laggards) and the required technology to perform tasks related to customer data management (39% leaders, 44% laggards), according to the report.
The report also found that leaders, in particular, struggled with having poor quality, inconsistent, or inaccessible data (41%); while laggards said they struggled with data fragmentation such as integrating multiple sources of customer data into their own platforms (41%) and gathering siloed data from multiple systems (41%).
All of these data management and fragmentation challenges resulted in more time spent collecting data, inadequate analysis due to incomplete data, inaccessible data, and inefficient data management.
Additionally, companies cited the top three consequences of data management challenges including reaching the wrong customer, lower revenue, and increased security risk due to more vendors without access to data or analytics capabilities, the report found.
Data management strategies must be embraced by the whole organization, not just certain departments. Living in silos will get organizations nowhere, according to the report.
3. In-house data management promises visibility and control
The report found that the best way to reclaim control of customer data was to bring data management capabilities in-house.
More than half of leaders (57%) said they have implemented and are expanding in-house control. Even laggards (35%) said they plan to bring data control in house over the next 12 months if they haven't done so already, the report found.
Looking ahead at the next two years, more data will move in-house as fully outsourced management drops by 48%. And, data managed internally using a mix of commercial and homegrown tools will increase by 40%. Both of these predictions display effort on the companies' part to gain more visibility and control over data, according to the report.
Companies said they believe that greater visibility and control will bring higher quality, consistent, and accessible customer data (57%), improved customer experience (53%), and increased company revenue (48%).
Additional benefits of in-house data ownership included more effective marketing, access to consistent data across enterprise, increased knowledge of where data lives, and the realized value of data, the report found.
To guide organizations toward better data management practices, the report identified the following four next steps:
1. Conduct a data audit and create a data strategy
Before making significant decisions, companies should understand the inputs and outputs of their current data management strategies. Start by identifying use cases where data is generated or gathered, and map out where that data is stored. By seeing where all of your data is going, organizations can better see where they can consolidate and organize, the report found.
2. Prepare to make an investment in data management
Moving from an external service or licensing commercial software to bring data and staffing in-house can be costly. Organizations must consider the startup costs to the technical infrastructure necessary for bringing data management in-house. The company must also prepare for maintenance costs of the program along the way, according to the report.
3. Tie data value back to the customer
Before diving head first into in-house data management, companies should develop an ROI analysis for each stage of the data management program rollout, to ensure that the customer and business will ultimately benefit. The program should link to customer KPIs including customer satisfaction and revenue to justify ongoing investment, the report found.
4. Get started today
Meeting customer expectations is crucial for organizations, so business leaders should start planning and completing the above next steps sooner rather than later. Begin seeking out partners who can help the organization best execute productive data management strategies, the report found.
For more, check out How companies invest in digital transformation to improve customer experience on TechRepublic.
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