Customer experience investments
In the mission to actively retain customers and boost their loyalty, brands must invest in correcting and upgrading user experiences. Worldwide spend on customer experience (CX) technologies is charted to reach US$641bn in 2022, according to IDC. Forrester’s recent Business Technographics® Software Survey saw 53 percent of European firms surveyed label CX tools as a high or critical investment for 2021, with just over 60 percent intending to increase CX investment spend.
Also read: CX in APAC region 2022
When shopping for CX solution providers, buyers can find themselves bamboozled by noisy, saturated vendor landscapes, with each provider claiming to answer all problems with little differentiation to the rest of the market.
Further barriers to CX spend activity include high-price points, as well as the complicated tasks of achieving stakeholder buy-in and return on investment (ROI). “A wise CX investment must be ticked and tied from top to bottom,” says John Quaglietta, global vice president, office of customer experience at Talkdesk. He adds: “This includes how [the investment] benefits support revenue/expense/CX goals, how it is aligned to the CX strategy, how it is operationalized through the use case, and how it is integrated into the existing CX architecture.” In CX Network’s 2021 Global State of CX research the EMEA CX experts flagged ROI as one of their worst investment challenges and the second toughest challenge holding back CX projects, which were stronger rankings than the global average. Over half of the EMEA group admitted they feel rising pressure to prove ROI with CX investments.
This guide provides a snapshot of investment trends expressed by almost 2,000 CX practitioners in the CX Network community. Insights around making profitable CX spend decisions will help readers avoid wasting time and money on flawed investments that risk damage to corporate and individual professional reputations.
“A wise CX investment must be ticked and tied from top to bottom.”
John Quaglietta
Global vice president, office of customer experience at Talkdesk
About the research group:
Over the course of 2021, we asked our members to inform us on their investment plans for five separate CX solution verticals: contact centers, customer experience management platforms, data and analytics, digital customer experience and voice of the customer. Below is a brief snapshot of the CX professionals who contributed to this study.
- Number of participants
CX professionals
- Job function
Customer experience
- Seniority
All have influence over CX investment decisions
Industries
Geographies
Contact center investments
When asked about spend priorities for contact center investments, the following averages and trends emerged from our research group’s responses:
- US$0 – $250,000:
Average budget for contact center investments
- 0–6 months:
Average desired investment timescale
Industries with the strongest contact center investment appetite:
- Financial services
- Telecoms
- Public administration, education and healthcare
Contact centers are on the frontlines of bringing to life the customer loyalty hopes a brand has. According to Talkdesk’s most recent research report, The Future of Customer Loyalty, 91 percent of CX professionals say their contact center is a major driver of customer loyalty. As seen in CX Network’s 2021 Contact Centers report, to enhance audience retention contact centers must invest in equipping staff with the tools, training, resources and culture needed to create meaningful experiences and boost first-time resolution rates for customer enquiries. The contact center at Dialog Axiata, a Sri Lankan telecoms firm, has received recent tech upgrades including real-time speech and text analytics, sentiment analysis and employee churn prediction algorithms. Rekha Weerasooriya, senior general manager of CX and people development at the telecoms operator, notes: “There is a lot of technology that contact centers can adopt to deliver better experiences. It’s not necessarily done at a low cost, but it’s key in order to give better customer experiences, so customers will see you as an even better service provider.”
The average investment timescale given by our respondents was 0–6 months indicating a short-term approach to spend decisions. Ahead of spend decisions, brands should establish realistic timelines with defined targets such as whether the focus is on cheaper quick wins or long-term ROI and whether a point-solution or an enterprise-wide platform is desired. Génesis Miranda Longo, industry marketing manager for retail at Talkdesk, notes that if short term timelines are well managed and communicated, they can motivate teams to move swiftly and expedite the lead time to return on investment. She emphasizes that to maintain project momentum the investment’s business and employee benefits should be clearly communicated to stakeholders. “Tight timelines, when communicated well, can be positive forces of change. However, organizations should be careful to not use these tight timelines as “rushing” or forcing mechanisms,” says Longo.
When integrating ESPN’s chatbot into its contact center workflow, Micah Citti, customer service operations lead at the sport broadcaster, found employee feedback was crucial to making the right investment. He explains: “When you bring your agents into these sorts of processes they become champions of the customer, because the last thing an agent wants is to create more work for themselves.”
“A poorly implemented chatbot is just going to make their lives harder, so having agent input is only going to make your [service] that much better,” he adds.
“Tight timelines, when communicated well, can be positive forces of change. However, organizations should be careful to not use these tight timelines as “rushing” or forcing mechanisms.”
Génesis Miranda Longo
Industry marketing manager for retail at Talkdesk
Buying criteria checklist
- Security risks:
Stress test compliance precautions to limit costly legal risks. Who will be responsible if government regulations are violated? Get ahead of risk management before it strikes.
- Scalability limits:
Has this vendor worked with organizations of your size? They may have previously handled a 100-seat contact center, but they may lack the capability to handle one of 1,000, or 10,000 seats.
- Ensure vendors respect your brand:
If you are a small business, ensure your vendor is eager to help you grow. If you are not important to them, you could be neglected in exchange for higher paying customers.
- Seek proactive vendors:
Search for providers with strong Artificial Intelligence (AI) and cloud capabilities. With the help of AI, companies can not only respond to customers’ needs seamlessly across channels with personalized, intelligent service, but can predict and prepare for their future needs.
Case study:
How Talkdesk achieved CX ROI in less than 12 months
How Talkdesk collaborated with a world leading food delivery company to help it achieve stakeholder buy-in and access returns in under a year of partnership launch.
Due to its various branches in 23 countries, one of the world’s leading food delivery companies sought a cloud-based, scalable, contact center solution that could connect its regional providers and partners, as well as to the local infrastructure.
Building a data-driven, compelling investment case
To better understand and align with the prospect, Talkdesk brought in its Talkdesk CX Strategy™ team. A group consisting of customer experience (CX) value consultants focused on supporting clients to build business cases for investing in Talkdesk.
CX Strategy worked with the prospect’s digital transformation project champion to define the brand’s use case, business challenges, key performance indicators, detailed process flows, technology footprint, as well as its CX and business goals.
The CX Strategy team conducted an ROI analysis by gathering regional data and analyzing it via Talkdesk’s tools, templates and frameworks. An efficiency gains benefit of €870,000 (USD 987,532) was identified along with a total annual saving of €1.5m. By improving call quality and routing, a 20 per cent reduction in average handle time could be obtained, equating to an annual cost reduction of €5,000 or 470 hours of agent time saved per year.
These projections were compiled into an executive presentation by the CX Strategy group, which accompanied a custom demo and recommendations on how the food delivery company could optimize its partnership with Talkdesk.
Results
Reflecting on the results achieved so far, Niki Lotte, senior marketer of products and services at Talkdesk, says: “In just under a year from initial calculations and partnering with Talkdesk, our customer saw a 25 percent reduction of transferred calls thanks to the Talkdesk features that enable better call routing to the appropriate agent, thus reducing average handle time by 15 per cent for inbound calls.”
She adds: “While just under our initial estimate, we have continued to partner with this customer — and all of our customers — to refine their Talkdesk operations and discover opportunities to enhance business value.”
“In just under a year from initial calculations and partnering with Talkdesk, our customer saw average handle time reduce by 15 per cent for inbound calls.”
Niki Lotte
Senior marketer of products and services at Talkdesk
Customer experience management platforms
The following averages emerged for spend priorities on customer experience management platforms.
- US$0 – $250,000: Average budget for contact center investments
- 0–6 months: Average desired investment timescale
Industries with the strongest CEM platform investment appetite:
- Financial services
- Telecoms
- Public administration, education and healthcare
Customer experience management (CEM) platforms support brands with organizing interactions with entire customer bases and mapping buyer journeys. CEM platforms emerged as the investment vertical attracting the most attention from the respondents. In comparison to the other product verticals, CEM platforms incurred the longest investment timescale from the EMEA participants. This indicates a more complex selection processes for this investment area in particular.
By centralizing information, these platforms provide the visibility to customize services to individual customer needs. They also minimize miscommunications by creating a single source of truth as well as eliminating tech and data silos that can complicate internal coordination.
This visibility on the end-to-end buying and selling process generates credible insights for business decisions and lays the foundation for automated workflows that can deliver personalized experiences at scale.
Julian Neo, managing director of DHL Express Manila and Brunei, says: “We have learnt that automation can be leveraged for mundane tasks and what this does is free up valuable time for our employees to do more meaningful work like connecting with the customers.”
With these platforms representing a long-term commitment, buyers should seek partners that offer a balance of stability, security and flexibility. A vital due diligence step, according to Dialog Axiata’s Weerasooriya, is clarifying the members of staff involved in your on-boarding. She explains that vendors often showcase the business development team for pitches at the acquisition stage, “… but when it comes to an implementation team, they might outsource that to different partners hence the promise vs. delivery might not exactly translate do you have signed on for”.
Weerasooriya advises: “Make sure that you [get to] know who your implementation team is, [what their prior success rate is] and that you sign off with clear outcomes in mind.”
Buying criteria checklist
Rich account management tools:
To enhance your business’s end-to-end synchronization, CEM platforms should house extensive fields for client account information such as purchase history, permission requirements and social interactions locations.
Connect experiential and operational data:
This integration can reveal which engagement tactics drive an uplift in purchase sizes or positive customer sentiments. A finding like this can optimize service recovery and sales approaches, as well as merchandizing strategies.
Digital experience investments
When asked about spend priorities for digital experience investments, the following averages and trends emerged from our research group’s responses:
- US$0 – $250,000: Average budget for contact center investments
- 0–6 months: Average desired investment timescale
Industries with the strongest digital experience investment appetite:
- Financial services
- Telecoms
- Manufacturing
Since the onset of Covid-19, digital access has played a vital role in individuals’ livelihoods. As a result, it has become mission critical for brands to provide high-quality and reliable digital experiences. As customers become more comfortable with remote services businesses with poor digital performance will likely struggle to maintain or grow their market share. This gravity is acknowledged in the respondent data - in comparison to the other product verticals, digital experience investments attracted the largest budget size from EMEA participants.
André Grandt, customer experience chapter lead and transformation officer at Roche, maintains customer centricity is the golden rule for digital CX success. He says: “…stay as close to your customers as you can. The needs of your customers is your destination, and your customers are the pilots of the transportation. Get to know your pilots the best you can, and they will take you to where you need to go. They can also tell you shortcuts as well.”
Looking at the spend behaviors of our research group, similar to other categories, short termism is present with digital investment timescales.
Talkdesk’s industry marketing manager for retail, Longo, notes: Setting short timelines, though optimistic, can cause teams to rush through the process and fail to get buy-in and involvement from all relevant stakeholders (whether they are obvious ones or not).” This lack of foresight often triggers last minute complications because certain stakeholder requirements have not been accounted for, budget issues or other business units are separately evaluating rival technology providers. Proper communication and strategic alignment across the enterprise is vital for streamlined CX investment decisions.
When assessing digital experience investments, K V Dipu, head of customer service at Bajaj Allianz General Insurance, recommends first classifying customer needs into two groups: stated and unstated.
“While stated needs are obvious and well-articulated, the latent ones are signposts we need to look out for,” he explains.
“The last step, which is normally the first step for many, is to launch the right digital solution. It is extremely important to fit the solution to the need and not the other way round.”
He adds: “The temptation to latch on to the latest tech buzzword in town and then force-fit that system to a need should be completely overcome.”
“Setting short timelines, though optimistic, can cause teams to rush through the process and fail to get buy-in and involvement from all relevant stakeholders (whether they are obvious ones or not).”
Génesis Miranda Longo
Industry marketing manager for retail at Talkdesk
Buying criteria checklist
Quantify requirements and vendor performance:
To quantify which requirements are mission critical use a scale to assign importance values based on the needs of your customers and internal stakeholders. Then, score each vendor’s performance out of 10. To calculate the vendors’ requirement score: multiply each requirement’s importance value by the vendor’s performance value. Add up the vendor’s scores for each requirement to calculate which vendor has the strongest overall offering.
Formula for quantifying vendor performance
- Stress test demos:
Mitigate the risk of overpromising and under-delivering to your stakeholders by conducting thorough background checks and a proof-of-concept with solution providers, Dialog Axiata’s Weerasooriya notes.
Demo environments are at risk of being engineered to appear perfect. Always test with your own data to get an accurate reading of the service’s capabilities.
Data and analytics investments
When asked about spend priorities for data and analytics investments, the following averages and trends emerged from our research group’s responses:
- US$0 – $250,000: Average budget for contact center investments
- 0–6 months: Average desired investment timescale
Industries with the strongest data and analytics investment appetite:
- Financial services
- Telecoms
- Manufacturing
Data and analytics can provide an in-depth understanding of customer behavior and signals. By continuously deploying a data-driven test-and-learn approach, brands can intuitively expand offerings.
However, the application of data and analytics in CX is fraught with challenges. As seen in the 2021 Big Book of Data and Analytics report, many brands struggle to overcome organizational data silos and the integration of data from diverse sources. Understanding how to overcome these problems is key to the success of any CX initiative that leverages data, such as automation. Sidney Madison Prescott, global head of intelligent automation at Spotify, says: “The dedication to ensuring data is accurate, complete and consistent is extremely important so data can be trusted for automation initiatives and business decisions. Whether it is being used by the C-suite to make monumental decisions at an enterprise level or by an analyst trying to optimize client management.”
Also read: Data & analytics in CX network APAC region
One of the first data-led investments our CX respondents should consider heightening customer visibility are data-centric hygiene projects such as centralizing repositories, mining data lakes and driving data integrity. High-quality customer and product data presents the first step to accurately optimizing buyer journeys.
Buying criteria checklist
Do not wait to have the perfect dataset – start small:
Look to areas of your database that have the integrity to inform personalization strategies. Connect these resilient areas of your datasets to get a clearer picture of customer needs.
Get references from existing clients:
Talk to friends or associates in similar industries who you trust for honest vendor reviews. Ask about adherence to timescales, budgets and service level agreements.
Future proof your decision:
Talkdesk’s Quaglietta encourages brands to seek CX partners “that don’t just meet your requirements today but will push you to innovate in the future.” He adds: “Don’t just consider the current features and functionality of CX technologies; dive into product roadmaps, company vision, and growth plans to ensure this partner will enable you to continue innovating and staying ahead of the curve for years to come.”
Voice of the customer investments
When asked about spend priorities for voice of the customer (VoC) investments, the following averages and trends emerged from our research group’s responses:
- US$0 – $250,000: Average budget for contact center investments
- 0–6 months: Average desired investment timescale
Industries with the strongest VoC investment appetite:
- Financial services
- Telecoms
- Manufacturing
Voice of the customer initiatives allow brands to uncover the true perspectives of their audience base. Instead of relying on gut feelings and internal assumptions, brands can make customer experience decisions based on VoC data. This evidence-based approach will increase an organization’s chances of delivering successful CX investments and valuable user journey improvements.
To rely on VoC platform insights brands must work on data integrity. Flimsy data management practices can lead to repositories holding outdated information on customers and the variables that influence client loyalty. Unawareness of which journey touchpoints hold added gravity could lead your brand to ignorantly frustrate customers. Equally your brand could miss opportunities prime for experience delight.
To the respondents with fast timelines in spending their VoC budget, McDonald’s head of customer experience Luka Popovac, recommends that as with any CX tech investment, practitioners should start small and examine the time-to-value vendors can provide. If there is a lack of clarity from a solution provider on what business value realized would look like for your business, Popovac notes that practitioners should consider this a red flag. As trustworthy VoC initiatives require the unification of different feedback sources, Popovac warns to avoid providers that impose significant contingencies on collaboration or integration with other vendors.
Buying criteria checklist
- Vendor location:
If you need face-to-face interaction and fast resolution in the planning and implementation stages, suppliers located far away from your units could cause a real problem. Remember to factor in differing time zones or a requirement for 24-hour support.
- Credit check:
Ensure your supplier is not at risk of suddenly going out of business, check they have a steady cash-flow and the ability to deliver products when you request them.
“Seek CX partners that don’t just meet your requirements today, but will push you to innovate in the future.”
John Quaglietta
Global vice president, office of customer experience at Talkdesk
Final remarks:
Ensure CX investment enthusiasm does not damage your due diligence
Regardless of the CX technology of focus, our respondents expressed a readiness to invest swiftly, with the most popular timescale to invest being zero-to-six months. Practitioners need to ensure that this enthusiasm does not dilute the strength of their planning and vetting strategies.
To mitigate the risk of CX investments, as well as assessing their compliance to industry regulations, CX professionals should evaluate a provider’s scalability capabilities and how interoperable their features are with the existing tech stack to prevent future roadblocks to growth.
Remember your business’s reputation will be influenced your supplier’s output, so choose wisely. Establish your criteria and goals before vendor selection starts with a clear awareness of which elements you are willing to negotiate on and which you are not. A targeted approach will increase your chances of making CX investment decisions that provide financial returns to your brand and higher customer satisfaction levels.