According to research by Sitecore, for every $1 organisations spend on improving the customer experience, they see a return of $3.1.
Meanwhile, Boston Consulting Group (BCG) suggests brands that create personalised experiences are seeing revenues increase two to three times faster than those that don’t.
Statistics like this go some way to prove the benefits of taking a strategic approach to digital marketing (which involves investment in customer experience technology) in order to drive ROI and business growth.
However, Econsultancy’s new report, The Business Case for Digital Investment in partnership with Sitecore, suggests that many organisations are still failing to take this type of approach, only investing when legacy systems fail or senior executives take charge.
Here’s more on what’s preventing organisations from spending on technology, and why investment is needed for a better customer experience. Subscribers can read the report in full.
Absence of strategy
Sitecore’s Customer Experience Maturity Model is broken down into three phrases of CX maturity: attract, convert, and advocate. Overall, Sitecore suggests that the majority of businesses are still in the first phase of maturity (adopting digital channels and identifying those most used by customers). What’s more, it also suggests that there is little movement beyond this phase.
Econsultancy’s survey – involving 241 respondents from the UK, Europe, Asia, and APAC – also backs up the finding that organisations lack a mature strategy. 44% of respondents reported still being in the ‘attract’ stage, lacking focus on engagement and optimisation.
Meanwhile, only 39% have a digital marketing strategy that is aligned to business, marketing and operational objectives. Worryingly, 18% also decide on investment based on the ‘person who shouts the loudest’. These companies are likely to be in the lowest stages of maturity, indicating a clear correlation between strategic investment and success.
Onus on CMOs
Proving the value investment in technology to the wider organisation remains a big challenge for many. 48% of respondents cited ‘lack of understanding and sponsorship’ as being quite a significant issue, while 32% said it was very significant.
Interestingly, most of the responsibility for securing investment falls on the CMO, as 40% of respondents said the chief marketing officer is more likely to be primarily responsible for creating the case for digital marketing and CX investment within businesses (more so than any other senior executive). In some ways, this is positive, as the research suggests that that companies are more likely to build investment cases in a rational way when it is led by the CMO.
However, for greater chances of success, a collaborative approach involving chief information officers and other senior executives is recommended. With the marketing department also likely to be the first to identify new opportunities in this area, it is important to create an open and communicative culture across entire organisations.
A limited view
In order to secure investment, of course, it is vital that companies are able to build a clear picture of the benefits (and submit this as part of a business case). However, research suggests that the majority of companies are only focusing on commercial gains, which in turn means they are only seeing half the picture.
72% of respondents say their main focus when assessing the case for procuring new systems is on increased business impact, while just 24% consider more complex questions of increased operational efficiency, and just 4% think about increased technology savings.
Even more enlightening is that, even with regards to commercial gains, a clear assessment is still not a common occurrence. Just 30% of respondents cite their ability to measure the top-line impact of optimised digital experiences as excellent or good, while 31% describe it as poor or very poor.
Considering that 55% of respondents claim to make technology investment decisions based on an objective business case and ROI, a better understanding of both the top-line and bottom-impact of optimised digital experiences is certainly needed.
Once this has been achieved, it’s also vital to understand external and internal costs – ranging from analytics to producing a single customer view – to help determine a complete picture of ROI and build a better business case for investment.
Find out more in Econsultancy’s report: The Business Case for Digital Investment in partnership with Sitecore.
Take a look at Econsultancy’s Customer Experience Training Masterclass.