Business leaders can make the ‘return to work’ transition more impactful by investing in technology that will help them better understand customer needs, create a more personalized experience, and enhance loyalty.
According to a new survey from ESI ThoughtLab and ServiceNow, companies that have made the most progress toward customer experience goals like these have made significant investments in foundational technology. For example:
- 53% of CX leaders have invested heavily in cloud platforms compared with just 12% of beginners.
- 31% have invested heavily in mobile devices and apps compared with 9% of beginners.
- 30% have invested heavily in digital payments compared with 14% of beginners.
- Conversely, more beginners (18%) have invested heavily in AI and robotic process automation than leaders (17%).
Following this start-with-the-basics approach appears to be paying off. Not only have leaders made substantially more progress toward CX goals, but they’re more likely to report a higher return on CX technology investments than beginners.
As a result, they are also likely better poised to keep and grow customers in this time of economic uncertainty.
Here are takeaways from three companies that pulled off big CX wins in different ways.
Build your cloud foundation
It’s no surprise that cloud platforms are the technology in which the highest percentage of leaders have invested. After all, more than 50% of respondents to the ESI/ServiceNow survey said that legacy IT systems were the biggest blocker of CX progress. Cloud systems not only solve that problem, they generate the highest returns. Yet the vast majority of companies have yet to make the commitment.
“Catching up is not fun,” says Shep Hyken, a longtime CX consultant and author of several books, including “The Amazement Revolution.” “If you need to improve immediately, my advice is to find a cloud partner that can help you scale up quickly.”
illycaffe, the Italy-based coffee maker, embraced the cloud as part of a broad digital transformation launched by CEO Massimiliano Pogliani two years ago. With that foundation in place, the company has been building out an “experience hub”—an integrated set of websites, apps, and other digital channels that manage every type of customer interaction, from a first-time shopper’s purchase at one of its 269 cafes to a restaurant owner requesting help with an espresso machine.
[Read also: How to please customers at scale]
“Many companies think CX is about e-commerce, or it’s a communication channel to interact with your customers,” says Pogliani. “For me, it has to be embedded in everything.”
illy is making more moves to make good on the promise. The company recently rolled out a loyalty program that will form the core of its mobile experience, and is working on a new global payments system. And new IoT-based features may soon handle diagnostics and maintenance on espresso makers for illy’s B2B customers, hints Pogliani. “Rather than react, we’ll be able to anticipate.”
But none of it, he adds, would be possible without the platform. “Cloud services let you shift your focus from managing technology to ‘what can I do to improve the experience?’”
Many companies think CX is about e-commerce, or it’s a communication channel to interact with your customers. For me, it has to be embedded in everything. — illycaffe CEO Massimiliano Pogliani
Focus efforts on what helps customers the most
Other companies have learned the inverse lesson of CX tech: sometimes less is more. When The Melt, a San Francisco–based chain of grilled-cheese sandwich shops, launched in 2011, it invested big in digital CX features.
Its app used geo-fencing so orders weren’t bagged until customers got within two blocks of the store. If you shared your Spotify stream, one of your favorite songs might come on the sound system while you ate.
But the formula was flawed from the start, says CEO Ralph Bower, who took over the top job in 2016. The menu was too limited, the geofencing often didn’t work well, and the music feature was rarely turned on at many stores.
“Some of the technology that we saw as features were dissatisfiers, not satisfiers,” says Bower, a fast-food industry veteran and former president of Popeyes Louisiana Kitchen and CEO of Pei Wei Asian Kitchen. The all-important Yelp review average languished in the mid-3s.
It wasn’t that digital CX didn’t have potential—it had simply distracted the company from serving customers’ immediate needs. At Bower’s direction, the IT group wound down the gimmickry and focused on robustness and on streamlining the ordering process on the mobile app. The chain also redoubled efforts to provide friendly, helpful service, even providing more than 16,000 free meals to first responders and healthcare workers during the COVID-19 crisis.
Bower’s back-to-basics approach is paying off. Melt’s Yelp reviews now average 4.7, and sales are now exceeding pre-pandemic days—far better than most restaurants are faring.
ROI compounds with sustained investment
If there are key intangibles for leveraging tech to create great CX, determination might top the list. As the survey shows, the ROI on CX investments increases both with time and through integration with other tools. For example, companies at the beginning of their CX journeys report an ROI of 17% for CX analytics, while CX leaders achieve double that return. More generally, leaders report a higher ROI across a broad range of technology investments.
There are also opportunities to make an impact without a big investment. For instance, just 12% of companies said they’ve invested heavily in social media, yet 29% said they were getting a high or very high return.
For Chairish, a digital marketplace for high-end furniture and antiques, social media delivered big returns at exactly the right time. At the onset of the pandemic, the company quickly made all of its 500,000 SKUs searchable on Pinterest and ramped up new content on Instagram. “People have a lot more time on their hands,” explains Chairish President Anna Brockway. While Chairish does not spend on paid advertising, organic social traffic is up 160% over last year and sales are up more than 70% from a year earlier.
Social media, Brockway says, “makes sure Chairish is top of mind when people are thinking about beautiful homes. It’s like standing next to the hoop, so when a buyer is ready to take a shot, we are whom they think of first.”