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As Bob Dylan coined back in the late 70’s, “for the times they are a-changin.’” When applied to the speed with which customer expectations change, we in the CX technology business know this song all too well.
We know that providing excellent customer experiences not only creates loyal customers, it also enables smarter business decisions.
According to McKinsey, companies that effectively organize and manage customer experience can realize a 20% improvement in customer satisfaction, a 15% increase in sales conversion, a 30% lower cost-to-serve, and a 30% increase in employee engagement.
Today, when it comes to providing customers with tremendous experiences, the classical approach of businesses buying piecemeal CX solution architecture has proven itself inefficient, expensive, and plagued in complexity.
Only a few years ago, CMS Wire cited that more than a third of marketing leaders relied on a best-of-breed stack over a single vendor suite. This stand-alone solution matrix resulted in an expensive web of disparate solutions needing integration of isolated data across multiple customer-facing applications.
Businesses were left hungry to see a return on their CX solution investment. And when that return didn’t materialize, they were left starving due to increased business costs to maintain and support these systems.
Today, Forrester recommends companies to “prioritize investments in normalizing and augmenting data from disparate systems and sources as well as customer analytics and tools.”
New business reality: Cutting costs without sacrificing CX
We’re now living in a new reality. With unstable economic headwinds and a looming recession, businesses that maximize revenue growth by tightening budgets and cutting the operational costs will be those best situated for the future. Yet, the biggest challenge is how to maximize operational efficiency without sacrificing on customer experience.
According to Forbes, the majority of CX leaders think their budgets will increase in 2023, but a fragile economy puts those budgets at risk. CX teams will have to do more with less and focus on projects with the highest return on investment.
Therefore, the new reality for every company is this: Optimize your operating margin.
No company in the world has mastered it completely. But according to McKinsey, by embedding customer experience within an organization and its operating model, companies can provide superior customer experience and realize tangible business impact.
We also know that the CX buyer is no longer the CMO, but rather the CFO with a focus on efficiency, automation, consolidation, and processes that will positively impact the bottom line.
Achieving this best-in-suite CX focuses on:
- A shift from best-of-breed to best-of-suite: the underlying applications must be interconnected to service the user and customer journeys in real time driving greater agility in business processes.
- Eliminate duplicative processes and simplify: reduce the costs of integrating a patchwork of solutions from multiple vendors.
- Industry expertise: focus on deep industry specialization rather than high level industry standards
- Top, bottom, & green: Focus not only on the topline & bottom line, but also on the green line impact.
Providing outstanding customer experiences is not the sum of seven clouds, but rather, by engraining CX into every functional area of the entire company, organizations can provide an unmatched, personalized customer journey that builds loyalty and trust.
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Make it happen: Examples of best-in-suite CX
Per McKinsey, the best-in-suite CX approach embeds customer-centricity in the daily decision making of those who have profit-and-loss (P&L) accountability, as opposed to outsourcing it to a standalone function.
Solutions should natively connect to a business’s cloud ERP through to the last mile of a customer’s experiences spanning e-commerce, sales, service, and marketing — all with the industry-specific best practices.
Forrester builds on that point in their 2023 CX report, encouraging businesses leaders to prioritize investments that also reduce operational costs such as document extractions, robotic process automation (RPA), and agent assist apps.
Here are a few concrete examples of how to achieve the new reality of operational success with best-in-suite CX:
- Make it human: Intelligent agents (IAs) make experiences more human for customers interacting in virtual environments. Often referred to as bots, chatbots, or digital workers, IAs, like ChatGPT or Maximus, use combinations of RPA, digital process automation, business rules, machine learning, natural language processing, and conversational AI.
- Make it easy to collaborate: With the integration of Microsoft Teams into CX solutions, organizations can better collaborate – saving time and money.
- Meet customer demand: Digital channels must be able to surge to meet customer demand. Looking at the 2022 Gartner Magic Quadrant for Digital Commerce, SAP Commerce Cloud is the only vendor to rank in the top quadrant for eight years consistently.
- Ditch clunky, legacy CRM: Walk away from input-heavy and output-poor CRM environments and move to a system that integrates across your entire ERP landscape and facilitates better decision making and the ability to bring cross-company vision to life.
- Avoid data and process duplications: Rather than integrate applications, choose vendors that are natively architected and connected. With data integrated across all customer-facing touchpoints into one system, businesses can eliminate duplicative data points and processes.
- Minimize functional silos: Customer experience is inherently cross-functional and top down. Keeping functional silos as dominant decision-making units may lead to the optimization of individual processes and customer touchpoints but not of the end-to-end customer journey. The risk is making ineffective improvements that don’t fully solve underlying customer pain points. (McKinsey)
At SAP, we offer a best-in-suite and industry driven approach to help our customers provide outstanding CX. By linking CX at the intersection of accounts receivables (finance, ERP) and revenue growth management (sales, service, and marketing), companies see faster time to value and lower TCO. And by linking front end data (sales and marketing) and back-office data (finance, ERP, commerce) businesses can improve upsell, customer retention, and overall customer lifetime value.
The only known certainty is that change is always imminent. But with the right infrastructure in place, connected from the front end to back end with deep industry specialization, your company will save on operating costs, and be well prepared for the next chapter of growth and change.