Being a CEO today is very different than it was even just a few years ago. It’s hard to think of one industry that hasn’t been disrupted by a newcomer who has completely changed the business model and as a result, customer expectation. Customers’ choices are no longer limited by geography and they have access to more information and influences over their buying decisions than ever before. Add on top of that the expectation that the Brands they buy from share their values and put their corporate muscles behind that belief. It takes a lot to understand all of this about your customer and deliver an experience that makes them choose you the first time they purchase and the next time too.
These shifts have caused Brands to react to find the quickest, easiest, fastest way to solve their immediate problem: how to survive and grow in the Experience Economy. For almost a decade, Big Data has been talked about as that silver bullet. Simply make every digital interaction trackable, pile on Customer Service data, add a little CRM power, connect that with another mound of financial data and the result is more data than we’ve ever had before. Now take that data and build AI-enabled customer experiences so it’s fast and compared to hundreds of head count, relatively cheap, and then sit back and let the money pour in. Here’s the problem: that’s not happening for most companies. In fact, businesses are failing at an alarming rate with a study from the John M. Olin School of Business at Washington University estimating that 40 percent of today’s Fortune 500 companies on the S&P 500 will no longer exist in 10 years.
This was the basis of the study we sponsored with Harvard Business Review Analytical Services – Beyond Big Data: Why Small Data Integration is the Key to CXM Success. We wanted to understand where companies were in their digital transformations and Customer Experience (CX) initiatives and if they felt they were reaching their goals. Here’s the abridged version of the report: No, most companies are not seeing any benefit from their CX projects. The reason? They don’t know their customer or why their customers do what they do. But what about all that data, you ask? Bottomline: It turns out it’s not the silver bullet we wanted it to be.
What Harvard Business Review did uncover in this study is that there is a small portion (15%) of CX Leaders that have been able to create CX strategies that are successfully achieving critical business goals such as revenue growth, customer loyalty and successful introduction of new products. These Leaders are collecting different data: both big and small data, derived from research using trackers and surveys, mobile diaries, online communities, and focus groups, to create a 360-degree picture of their customers to inform their CX strategy.
As the CEO of FocusVision I’ve been able to work with Fortune 500 companies every day looking to fuel their understanding of how their customers think, feel, and act to align their organization for the challenges and opportunities that they face. From my seat, here’s how I think today’s CEO can lead their business to success:
- Make data a company-wide priority: Most companies think they can allocate data collection to the Chief Information Officer, the Chief Marketing Officer, the Chief Experience or Digital Officer. This almost always fails. Customer data needs to be part of the CEO mandate that has alignment and responsibility across the leadership team. This eliminates data siloes and ensures CX organizations are building close ties to the business, focusing on key drivers of value to the business and pushing that throughout the organization. One of the reasons companies fail in their shift to a data-driven business is the business’ resistance to change the way data is gathered and used. Although data is collected, it lives and then dies in a PowerPoint, and doesn’t make it to the right channels to really effect the interaction with the customer. The mandate needs to include how that data is used to inform CX to affect true change throughout the company.
- Make the right investments: Funding the right projects, technology and resources required for the big/small data integration needed to understand your customer is crucial and will require a budget, commitment and alignment from the board, C-suite, across leadership and down into the organization to be successful. A lot of companies are starting AI projects but it’s another case of technology for the sake of technology and not informed by the right customer data. AI strategy needs to be based on data insights and that collection needs to happen before the use case for AI can be defined to truly affect the customer experience.
- Think long-term: If it really was fast and easy, everyone would be doing it. The CEO needs to mandate the development of longer term CX strategies with clear objectives around revenue growth, customer loyalty and product innovation to really drive a company-wide initiative. Creating the customer-obsessed, data-driven culture that makes truly understanding the customer and using that understanding to build exceptional experiences needs to be a cornerstone of the business strategy. If you think about Amazon and Netflix, the reason they’ve been so successful is because they’ve built a recommendation engine into their business model. In order to be successful in integrating data insights into your business model, it needs to be automated. Specifically, in the area of small data, I believe that we will see more innovation happening on this side of the data collection industry so that human data becomes automatically ingested in the CX workflow.
With the right priorities and alignment, today’s CEO can drive transformation that will set their company up to survive and thrive no matter what happens. When a company knows how their customers think and feel and why they do what they do, then they can make the right decisions to become essential to their customer’s lives.