In 2018, brands have high standards to live up to when it comes to customer experience.

The most disruptive companies of the digital age, from Amazon and Uber to Netflix and Spotify, have succeeded in large part by delivering an unparalleled customer experience. They don’t just offer a service; they make that service more straightforward, tailored and convenient than anyone had thought possible.

This sets a high bar for other companies in the same sector hoping to compete, and it raises consumer expectations for what constitutes a good customer experience.

The good news is that new technologies like AI, machine learning and adaptive personalisation, together with effective use of data, can enable any brand to provide a next-level customer experience. However, marketers have a technology problem.

Bridging the Customer Experience Gap’, a new report by Econsultancy, produced in partnership with Zone and Cognizant, has found that marketers’ technological infrastructure frequently falls short of the level required to enable a truly great customer experience – and marketers are well aware of it.

The research, which surveyed more than 1,000 businesses to explore the extent to which companies are meeting consumer expectations for customer experience, revealed a variety of obstacles preventing marketers from delivering the best possible experience.

But how prevalent are these issues, and what are marketers doing to tackle them?

Marketers recognise the importance of technology – but systems are letting them down

The good news is that marketers fully recognise the importance of technology to delivering a great customer experience (CX).

When asked to highlight the three most important capabilities for being able to deliver a first-class customer experience, 45% of marketing respondents placed technology in the top three – making it the second most-valued capability for delivering great CX, after strategy (55%). 30% of marketers believed that it was either the most or the second-most important capability.

However, organisations’ technological capabilities are still quite a way from living up to the standard that marketers believe they need for the best customer experience. When asked to rate their company’s capabilities in various areas in terms of its ability to deliver a first-class CX, 44% of respondents rated their technological capabilities as “Okay” or worse, with just 21% considering their organisation’s technological capabilities to be “Excellent”.

Graph showing marketers' responses to the question: How do you rate your organisation’s capabilities in the following areas in terms of its ability to deliver a first-class customer experience?

And when asked which of a range of obstacles they regard as the most significant barrier to a better customer experience, nearly a quarter (23%) of marketers cited “Legacy technology and infrastructure”. Technology woes were the most-cited barrier in the way of customer experience, above siloed organisational structure (cited by 19%) and lack of focus on customers’ needs (cited by 15%).

Mark Evans, Marketing Director at Direct Line Group Insurance, spoke to Econsultancy’s research team about the challenges of dealing with legacy systems while trying to deliver a superb customer experience.

“It is a real challenge to keep things simple for customers when dealing with the complexity of legacy infrastructure,” he said.

Full personalisation is the holy grail, but [it] adds yet another layer of complexity. Delivering a seamless end-to-end customer experience is much easier in a greenfield context, but with legacy systems you never completely crack it.” – Mark Evans, Marketing Director, Direct Line Group Insurance

Some businesses, however, are managing to take steps to break away from legacy systems and processes. Margaret Jobling, Group CMO at Centrica, told Econsultancy that, “We are very much sold on the importance of the customer experience; it’s something we value and recognise.

“We also know that as a legacy business, we have some legacy processes, thinking and systems that we are trying to break away from. Eighteen months ago, we changed the business to a single P&L so we could think about the customer from end-to-end, and make teams more horizontally integrated.”

Where are the problems? Disjointed platforms and back-end tech

A little over half of marketing respondents (54%) to Econsultancy’s survey agreed with the statement that, “We have the technology we need to deliver great customer experiences.” However, more than a quarter of respondents (28%) somewhat or strongly disagreed with this statement, with close to a fifth (18%) remaining neutral.

Where are marketers identifying problems with their technology systems when it comes to delivering a brilliant customer experience? Aside from legacy infrastructure, one of the most widely-identified issues was disjointed tech platforms: a full two thirds (66%) of marketers agreed with the statement, “Our technology platforms are not sufficiently joined-up to deliver great customer experiences.”

Column graph showing marketers' level of agreement with statements related to their technological capabilities.

Without a joined-up tech infrastructure, marketers will inevitably struggle to gain a 360-degree view of the customer across numerous different touchpoints, as well as to deliver automation and personalisation through the right channels at the right time – all important components of a best-in-class customer experience.

The data access layer which underpins applications is also vital for ensuring that systems function effectively, which means that marketers’ back-end capabilities need to be up to scratch. However, only half (51%) of marketers agreed that, “We have the back-end tech capabilities required to produce brilliant customer experiences” – with more than a quarter (28%) disagreeing or strongly disagreeing that their back-end capabilities were where they needed them to be.

Data difficulties

When it comes to delivering a great customer experience, effective use of technology and effective use of data tend to go hand-in-hand. However, as the report author points out, “As with technology, it is clear many organisations still need to work out how to exploit data fully.”

Only around half (56%) of respondents to Econsultancy’s survey rated their organisation’s data capabilities as “Excellent” or “Good”, and nearly a fifth (19%) rated them as “Poor” or “Very poor”.

Half of marketers surveyed (50%) are ambivalent about their ability to access the data they need across organisational silos, remaining neutral, somewhat disagreeing or strongly disagreeing in response to the statement, “We are able to access the data we need across organisational silos to derive actionable insights”.

Close to a quarter of respondents (23%) also do not believe they have the marketing analytics needed to optimise against key CX metrics, while a further 20% are ambivalent.

Column graph showing marketers' level of agreement with two statements about data and analytics.

What are marketers doing to tackle these problems?

Fortunately, a large percentage of marketers plan to tackle their shortcomings in the realm of technology and data by increasing investment in those areas.

When asked which out of a range of areas they are investing in in order to improve the customer experience, 55% of marketers reported that their organisations are increasing investment in marketing technology. 55% are also upping their investment in data, while 51% are increasing their level of investment in infrastructure.

Graph which indicates whether marketers are increasing, maintaining or decreasing their investment in six areas related to CX: data, marketing technology, infrastructure, processes, CX experts and artificial intelligence.

Many marketers are also pushing the boat out further with investments in artificial intelligence and machine learning – innovations that, as previously mentioned, can transform the customer experience by learning from and adapting to customer behaviour, personalising interactions, analysing and spotting trends in huge datasets, powering chatbots and virtual assistants, and more.

Nearly two fifths (39%) of marketers surveyed by Econsultancy say they are currently “harnessing artificial intelligence and machine learning to improve the customer experience”, and more than a third (36%) of marketers have plans to increase their level of investment in AI.

On the subject of investing AI to improve the customer experience, Centrica’s Margaret Jobling told Econsultancy that, “the potential there is phenomenal and, like other businesses, we are experimenting to build our knowledge and see where the value exchange is. We are looking at how we operationalise and production-ise it.”

Overall, while the figures might seem to paint a gloomy picture of organisations’ technological capabilities with regard to CX, it is evident that marketers know exactly how important technology is to the customer experience.

While many may still be saddled with legacy systems and unable to be as agile as they would like, investment in technology and data is on the rise, and major brands like Barclays are demonstrating that large, established organisations can be just as capable as new, agile start-ups of delivering an excellent customer experience.

Download the full Bridging the Customer Experience Gap report for insights from thousands of consumers and marketers, plus commentary from senior marketing experts, into how effectively brands are delivering on customer experience.