Dive Brief:
- Only one-third of data collected by customer data organizations is used to make CX decisions, according to a survey released by the IBM Institute for Business Value and Adobe Tuesday.
- Brands are failing to read customer data and react accordingly, according to the study. The problem causes the most friction in cross-channel identity resolution, adapting to customer needs and delivering personalized content at scale.
- Underusing data can be a bottleneck for potential long-term CX improvements, too. Three-quarters of executives say most businesses are slow to respond to changing customer expectations, according to the survey of 1,000 global senior tech and marketing executives.
Dive Insight:
Businesses have access to massive amounts of data, but many are failing to put it to proper use in anticipating customer needs or personalizing experiences. That failure has an impact on the bottom line.
When brands fail to understand and act on customer intent, the resulting delays cost an estimated average of $29 million annually, according to IBM Institute for Business Value’s calculations.
The research found that companies that act with speed gain multiple advantages, including 13% lower customer acquisition costs, 6% higher customer retention rates and a 3 point advantage in net promoter scores.
Nearly 9 in 10 executives say customers expect companies to anticipate their needs before the customer expresses them, according to the survey. This is having an impact on strategy, as executives’ top near-term priorities are tech and integration, speed and personalization.
Other consumer surveys have found growing demand for personalization, too. Nearly two-thirds of consumers prefer tailored experiences, according to Qualtrics XM Institute research from October.
However, the wrong approach to personalization could contribute to companies sitting on an excess of unused data, according to Max Venker, VP of product marketing for XM for Customer Experience at Qualtrics. Brands need just the relevant data to understand the customer, not all of their information.
“It’s less about knowing their name or their birthday; and more about understanding where they are, the context of their situation, and what they need help with,” Venker said in the Qualtrics report. “With advances in real-time technology and AI, it’s possible to serve customers in an intelligent way that will blow traditional personalization efforts away.”
Personalization faces its own challenges, with 7 in 10 executives saying they are struggling with the balance of intelligent personalization against consumers’ trust and privacy demands, according to the IBM Institute for Business Value study.
