Closing the-customer-experience-gap

Research Report
Sponsored by
CLOSINGTHECUSTOMER
EXPERIENCEGAP
How IT and Business Can Partner to
Transform Customer Experiences

sponsor url
SPONSOR PERSPECTIVE
JOHN WOOKEY
EXECUTIVE VICE
PRESIDENT
SALESFORCE
PLATFORM
At Salesforce, we understand that today’s customers expect a smarter and more
connected experience. A company’s ability to deliver this modern customer
experience has become the ultimate competitive advantage. It is no longer enough
to offer the best good or service. To exceed customer expectations, companies
need to leverage customer data.
Thanks to the influx of customer data from social media, e-commerce and
mobile devices, companies have more data on their consumers than ever before.
Yet, without the means to act on this data—or extract meaningful insights—
businesses are struggling to understand their customers any better than they did in
generations past.
Harvard Business Review Analytic Services has done a deep-dive into what conflicts
companies are encountering while attempting to deliver one-to-one customer
experiences and what factors are contributing to the successes of others. These
findings reveal that IT decision makers are currently more empowered than ever to
position their companies to place customer experience at the forefront.
This report has identified many barriers that prevent companies from gaining
a single view of the customer. From organizational silos and data integration
problems to data quality issues and inconsistent data collection, companies need
solutions to the problems that stand between them and delivering personalized
customer experiences. The successful companies that are using customer data to
tailor experiences have identified that a company customer-centric focus and the
use of emerging technologies are critical.
It is no wonder that the ability to easily analyze customer data and create
actionable insights is becoming valuable. A single view of the customer from a
single, integrated source of truth will prove invaluable as customers and technology
continue to evolve together.

3Harvard Business Review Analytic Services
HIGHLIGHTS
73%of business leaders say that delivering
a relevant and reliable customer
experience is critical to their company’s
overall business performance.
13%of companies have a single source
of customer intelligence today, and
30% are working toward that.
23%say they are able to act on all or most
of the customer data that they collect.
There is broad agreement in the executive and management ranks
that customer experience is a key competitive differentiator today.
Companies of all sizes and across all industries see the strategic
significance of superior customer experience expanding in the future.
Nearly three-quarters of business leaders (73%) said that delivering a
relevant and reliable customer experience is critical to their company’s
overall business performance today, and almost all (93%) agreed that it
would be two years from now.
However, very few companies have the necessary technology systems in place to
support the organizational and process changes required to reorient the business to
the customer. Delivering a superior customer experience requires flexible software
capable of ingesting and analyzing growing volumes of data in various forms, and
legacy systems are rarely capable of this task. As a result, there is a substantial
disconnect between the importance of customer experiences and the capabilities
of companies to deliver them. A mere 15% of business leaders rated their customer
service strategy and approach as very effective, while just over half (53%) said their
approach is somewhat effective. FIGURE1
These are among the findings of a new Harvard Business Review Analytic Services
study of 680 executives about customer experience management—research that
features in-depth interviews with several top-performing company leaders.
Increasingly, customer experience is the competitive differentiator as companies battle
for business in industries where products are growing ever more commoditized and
customers significantly more demanding—and IT is uniquely positioned to lead the
technology, process, and organizational transformation required to meet customers
where they are. “We must continuously improve our customer experience by, for
example, removing friction from our processes and adding new features to our
products,” said the customer experience leader at an international financial services
company in the midst of a global reorganization to improve customer experience
performance. “We need to make sure that our customers have an optimal experience
across various silos and products from start to finish.”
Data has a clear role to play in developing a superior customer experience—
and companies have access to more information on their customers than ever
before. Indeed, they are seeing an exponential increase in customer-related data,
driven largely by social media, mobile, and e-commerce. But these expanding
troves of customer information alone are clearly not driving customer experience
improvements—let alone innovation—in the vast majority of organizations.
CLOSINGTHECUSTOMER
EXPERIENCEGAP
How IT and Business Can Partner to
Transform Customer Experiences

4 Closing the Customer Experience Gap: How IT and Business Can Partner to Transform Customer Experiences
THE GOOD NEWS IS
THAT THE CORPORATE
LEADERS AGREE ABOUT
WHAT IT WILL TAKE TO
DIGITALLY TRANSFORM
THEIR ORGANIZATIONS
AROUND THE CUSTOMER
The good news is that the corporate
leaders agree about what it will
take to digitally transform their
organizations around the customer—
culturally, organizationally, and
technologically. It requires explicit
executive support, a clear strategy, a
customer-centric culture, alignment
and integration, investing in and
partnering on new technologies and
skills, and empowering employees to
deliver and innovate around customer
experience. And, as evidenced by the
early adopters who are already making
these changes required to deliver
superior customer experiences, the
efforts pay off not only in terms of
improved customer experience quality,
but also in competitive advantage and
corporate growth.
The Keys to Customer
Experience Transformation
Business leaders are clear about the
most important factors in delivering
superior customer experiences today.
Topping the list is creating a customer-
centric culture, cited by nine out of
10 respondents. FIGURE 2 “Customer
experience has to be a priority, but
more than that, it has to be built into
the organizational culture, or it can
be set aside when other priorities
emerge,” said the president and CEO of
a U.S.-based credit union, noting that
it is something that both employees
and business partners must espouse
and bring to life every day. “Customer
experience is something we have to
focus on all the time to make sure
that we never let it slip, because we
always have new employees, new
systems, new vendor relationships. The
customer experience has to transcend
all of that as a key focus.”
Well over 80 percent of respondents
also said that having management and
leadership buy-in, visibility into and
understanding of the end-customer
experience, and a clearly communicated
customer experience strategy were
critical components of delivering a
winning customer experience. Yet less
than half of them rated their companies’
performance in any of these areas as
very effective.
But what companies are really
struggling with is customer data and the
Three-quarters of companies are not
able to act on the majority of data they
collect, owing in large part to disjointed
systems and data integration issues.
Organizational silos, lack of funding,
cultural resistance, and availability of
skills are preventing most companies
from creating a single source of customer
intelligence available throughout the
enterprise—long the Holy Grail for
customer experience improvement.
IT leaders can play a critical role in
breaking down the organizational and
technology silos holding customer data
hostage and working with experienced
vendors and consultants with the data
and analytics capabilities and next-
generation technologies required to
build a robust foundation for customer
experience in the future. They must
also work in partnership with customer
experience leaders to tackle the larger
strategic issues holding companies back.
Organizations must have explicit
executive buy-in, and their leaders need
to develop, communicate, and execute a
clear and cohesive customer experience
strategy. The structural, technological,
and process reengineering required in
order to deliver a single customer view
is easier to deliver when the appropriate
customer values, incentives, and
direction are in place. Those companies
with leaders that have not bought into
the value of an integrated and all-
encompassing customer experience
foundation find their efforts lack
the clarity, budgetary support, and
organizational structures to drive
customer-focused transformation.
FIGURE 1
CUSTOMER EXPERIENCE EFFECTIVENESS
How effective is your company in delivering a relevant and reliable customer experience?
Veryeffective
Somewhateffective
Notveryeffective
15%
10 20 30 40 50 60 70 80 90 100
SOURCE: HARVARD BUSINESS REVIEW ANALYTIC SERVICES SURVEY, APRIL 2017
53%
32%

company—an industry not known
for satisfied customers—said creating
a customer-centric culture takes a
targeted effort. “One of our challenges
is bringing customer centricity into
all levels of the organization. Most
of our organization is made up of
engineers; understanding customers
is not something they are taught,” he
said. “When we hire someone, we
spend a great deal of time and money
to get them to the place where they
understand what is important [to the
customer]. Once you have a customer-
centric culture in place, it’s easier.
That’s a much more powerful tool than
just training.”
technology foundation required to make
sense of it all and distribute the resulting
insight throughout the organization.
Data and systems integration and
visibility across the enterprise, giving
employees the power to deliver and
innovate around customer experience,
and aligning IT decision-making
with customer experience demands
were all cited as extremely important
in delivering a superior customer
experience. Yet only around a quarter
of respondents said their companies
perform well in these areas.
The chief customer officer (CCO) at
a multibillion-dollar institutional
investment and benefits provider is
beginning to address some of these
issues by breaking down barriers
between customer experience and IT
strategy and execution. “We realized we
weren’t moving fast enough, so our CIO
handed 36 of his technologists to me,”
said the CCO. “You can’t get meaningful
customer work done if there are
functional lines getting in the way. So we
have arranged ourselves entirely around
the customer under one structure. We
make all the decisions—and we’re on the
hook for the outcomes.”
Having senior leaders define ideal
customer experiences and translate
those into a well-thought-out strategy
is also key. Ideally, executives convert
these intended outcomes into a
“detailed and prioritized customer
experience initiative road map that
incorporates a well-thought-out data
strategy, integration of databases, and
tools to provide a single view of the
customer, the means of delivering
the right intelligence to the frontline
employees to manage customers’
experiences, and staff training,” said
the senior vice president of strategic
analytics for a marketing services firm.
“When such an exercise hasn’t taken
place, customer experience is only
a ‘temperature-checking’ exercise
without the ability to quantify how
improvements in key engagement areas
translate into improving customer
experience and connecting those gains
to economic results.”
Creating a customer-focused culture is
easier in some industries than others.
The head of process and technology
innovation for a software development
FIGURE 2
THE MOST IMPORTANT FACTORS TO DELIVERING AN
EFFECTIVE CUSTOMER EXPERIENCE
How important is each factor in delivering a relevant and reliable customer experience?
How eﬀective is your organization in this area? [PERCENTAGE INDICATING 8,9. OR 10 ON A SCALE OF 1-10)
•IMPORTANCE
•EFFECTIVENESS
Acustomer-centricculture
Management/leadershipbuy-in
Visibilityintoandunderstandingoftheendcustomerexperience
Aclearlycommunicatedcustomerexperiencestrategy
Clarityaroundcustomerexperiencevalue/ROI
Dataandsystemsintegrationacrossallchannelsandproducts
Visibilityofdataacrossallfunctionalareas
Employeeswhoareempoweredand/orautonomousindeliveringorinnovatingaroundcustomerexperience
AlignmentbetweenITdecisionsandcustomerexperiencedemands
90%
45%
88%
49%
87%
35%
86%
34%
79%
29%
78%
25%
77%
26%
76%
31%
76%
25%

data to drive customer experience
efforts, giving their employees and
partners access to the tools and insights
needed to create a superior customer
experience. FIGURE3 They are more likely
to be using emerging technologies and
creating personalized and omnichannel
experiences. They are more likely to use
data to predict and anticipate consumer
needs, understand lifetime value, and
track customer advocacy.
From a demographic standpoint,
these leaders are more likely to be
based in North America, be the larger
organizations, and have both B2B
and B2C business models. They are
more likely to be found in business or
professional services, financial services,
and technology industries. Customer
experience laggards were more likely to
be smaller companies or those with an
entirely B2C approach.
Unlike those identified as followers (the
53 percent with somewhat-effective
customer experience practices) and
laggards (the 32 percent with less-
effective customer experience practices),
nearly all customer experience leaders
have a clear and coherent customer
experience strategy that is understood
by all employees.
But perhaps what really sets apart
leaders—and even followers—is that
they believe there is no time to waste
in transforming to deliver a superior
customer experience. They are
convinced customer experience is key
to performance today, while laggards
believe this will be the case in two years’
time. Thus, they have already begun
the hard work of defining customer
experience outcomes, developing
new customer-centric strategies, and
rethinking people, processes, and
technologies to deliver better customer
experiences and improve overall
performance.
The Need for Speed and Agility
What many leaders are working toward
is the ability not just to deliver a reliable
and relevant customer experience,
but also to quickly respond to changes
in customer or market dynamics.
“Customer demands are growing, and
the need for speed is increasing,” said
the credit union CEO.
What Sets Customer Experience
Leaders Apart
That CCO who has his own dedicated
customer experience technology
resources works in a company that is
investing $50 million in a three-year
customer experience transformation
in a recently deregulated, intensely
competitive industry. “Our leaders have
resolved that the future of our industry
is our customer,” he said.
A closer look at the customer experience
leaders identified in this report—the
15% of respondents who described their
customer experience as very effective—
reveals some fundamental differences
between these forward-leaning
organizations and others. They are
more likely to have a customer-centric
culture and a single source of customer
intelligence. They are more capable
and agile in leveraging their customer
7.18
5.55
FIGURE 3
CX LEADERS PRIORITIZE CULTURE, STRATEGY, SKILLS,
AND DATA ACCESS
How eﬀective is your organization in delivering on/achieving each of these factors?
[RATED ON A SCALE OF 1 TO 10, WHERE 1 IS NOT AT ALL EFFECTIVE AND 10 IS EXTREMELY IMPORTANT/ EFFECTIVE]
•LEADERS
•FOLLOWERS
Acustomer-centricculture
Management/leadershipbuy-in
ClearlycommunicatedCXstrategy
Employeesempoweredtodeliver/innovateCX
StaﬀaccesstoCXdata/tools
PartneraccesstoCXdata/tools
Allemployeeshavegoodanalyticsskills
8.78
7.24
8.72
7.37
8.42
6.53
7.75
6.31
7.54
5.86
6.93
5.61
BASE: BEST IN CLASS N=100, FOLLOWERS=364

THEPACEOFCHANGE
ANDSHIFTINGCUSTOMER
DEMANDSARESOME
OFTHEBIGGEST
CHALLENGESTO
DELIVERINGASUPERIOR
CUSTOMEREXPERIENCE
FIGURE 4
CUSTOMER EXPERIENCE LEADERS’ RESPONSIVENESS
Do you agree with the following statement: My company is able to quickly build new and
innovative customer experiences in response to market changes.
•STRONGLY DISAGREE
•SOMEWHAT DISAGREE
•SOMEWHAT AGREE
•STRONGLY AGREE
1% 42% 44%
2% 18% 55% 11%
17% 39% 25% 5%
10%Leaders
Followers
Laggards
end-to-end delivery of new features to
our customers difficult. It requires the
involvement of a number of other parties
to accomplish,” he said. “That’s the
biggest impediment to delivering fast
improvement to customers. It requires
alignment, and alignment inevitably
requires more time and planning.”
The Customer Data
Universe Expands
The volume of accessible customer
data has grown significantly over the
past two years, with much of the new
data potentially useful to companies
that seek to build more agile and
responsive customer experience
practices. Unfortunately, much of it
remains unused.
Social media, mobile, and e-commerce
or website data have seen the highest
levels of growth. The expansion of
third-party, partner, and beacon data
has been more modest, although
customer experience leaders report
substantially higher rates of growth in
these three areas, as well as in machine
or sensor and e-commerce data.
Most companies, however, are failing to
leverage the growing mountain of data
at their disposal. Just under a quarter of
respondents (23%) said they act on most
or all of the customer data they collect,
while a similar number (23%) said they
act on very little or none of it, and the
remainder use some of it. FIGURE5
The vast majority of customer
experience leaders (86%) said—as did
two-thirds of followers—that their
companies are able to quickly build new
and innovative customer experiences in
response to market dynamics, while the
majority of laggards remain flat-footed
in this fast-changing marketplace.
FIGURE4 Forward-looking companies have
invested in new technologies capable
of consolidating and analyzing key
customer data and have reorganized to
be able to act on that customer insight in
a more nimble way.
The pace of change and shifting
customer demands are some of the
biggest challenges to delivering a
superior customer experience, according
to the vice president of customer
experience of a software solutions
provider for logistics terminal operators.
In fact, that’s one of the reasons
his company created the customer
experience role two years ago. The
company has always been extremely
customer-focused, but his role is to
ensure that continues to be the case
as the software solutions grow in
complexity and as customers ask for
more from the company.
Staying ahead of the competition
and would-be disrupters is crucial
and requires a new approach. “Our
ability to create change rapidly as it
relates to a better customer experience
across this large organization requires
a very agile approach and mindset,”
said the institutional investment
and benefits company CCO. At the
software development firm, a flattened
organizational structure enables more
rapid response to shifts in customer
demands. “Most IT services companies
are hierarchical,” said the company’s
head of process and technology
innovation. “We adopted a matrix
structure primarily to enable increased
communication and empower
employees.”
One global financial service company
is replacing its structure with outcome-
oriented teams, according to one of its
customer experience leaders, who is
leading a team focused on customer
journeys. Even so, responsiveness and
rapid innovation remain a challenge.
“We still have legacy and current
IT infrastructure, which makes the

FIGURE 6
SINGLE SOURCE OF CUSTOMER INTELLIGENCE ELUDES
MOST COMPANIES
Do you have a single, reliable source of customer intelligence across all products and
activities today?
13%
Yes,singleCIsourceacrossall
productsandactivities
30%
No,activelyworkingon
creatingsinglesource
7%
Don’tknow
22%
No,havenotbegun
toaddressthisissue
28%
No,evaluating
requirements
forsinglesource
Leaders are collecting and acting
on more data than their rivals are.
Notably, they also are more likely to
immediately put it to use. Four out
of 10 said confidently that they are
able to quickly act on the data they
do use to make enhancements to the
customer experience, compared to just
11% of followers and 5% of laggards.
But they too have plenty of room for
improvement in extracting the full value
of the customer information they are
gathering.
A Single Source of Truth
Remains Elusive
Despite—or, in part, because of—these
new and expanding data sources,
companies are still struggling to create
a single source of customer intelligence.
Just 13% have it today, and 30% are
actively working on it.FIGURE6
Leaders are more likely to have
achieved a single customer intelligence
source. However, three quarters of them
admit that they are not yet where they
would like to be.
The performance marketing manager at
an online fashion retailer said data and
systems integration has made creating
a single source of customer truth a
FIGURE 5
COMPANIES DO NOT ACT ON THE MAJORITY OF CUSTOMER DATA
How much of the customer data that your organization collects are you able to act upon?
3% Allofit
20%Mostofit
Don’tknow 4%
Very littleofit 21%
50%Someofit
Noneofit 2%
ALL/MOST OF IT SOME OF IT LITTLE/NONE OF IT
43%
24%
12%
41%
54%
48%
10%
18%
36%
•LEADERS
•FOLLOWERS
•LAGGARDS

challenge, although it is something they
are actively developing.
At the terminal technology provider,
consolidation of systems with its
parent company and also with a newly
acquired company has to date thwarted
such efforts. “It’s an ongoing process to
rationalize and clean up the data across
systems as we continually evolve,”
said the company’s vice president of
customer experience. Ultimately he
would like to begin correlating CRM
and financial data to start looking at
customers in new ways—in terms of
profitability and demand for support
services—but that will take another
year or two.
There are a number of impediments to
these efforts, led by organizational silos,
lack of systems or data standardization
and integration, data quality issues, and
inconsistent collection of data. FIGURE7
Eliminating silos has been critical to
customer experience innovation at
the global financial services company,
where employees have reorganized
around the customer journey. “We
are able to see and manage the end-
to-end customer processes better and
take on more responsibility to improve
them,” says the customer experience
leader. “Before, it was difficult to even
realize the smallest changes to the
customer experience. Now it’s much
easier and faster to do.” The company is
redesigning and streamlining customer
journeys and also developing a tool kit
that other employees can use to gather
insights to make further improvements
to customer experiences.
Inadequate budgets, cultural resistance,
and lack of availability of skills are also
significant barriers to creating a single
view of the customer for a third of
respondents. “The proliferation of new
technologies means that it’s becoming
harder and harder to access expertise
in these platforms, and there is often
significant competition in the market
for staff and even vendor resources to
assist,” says the CCO of the institutional
investment and benefits provider.
“Forming partnerships with vendors and
consultants has been our initial strategy
to deal with the skills shortage, with a
strategy to grow more internal talent
over time.”
FIGURE 7
BARRIERS TO CREATING A SINGLE SOURCE OF
CUSTOMER INTELLIGENCE
What are the biggest impediments to creating a single source of customer intelligence?
[MULTIPLE ANSWERS ACCEPTED]
•CULTURAL BARRIER
•PROCESS/DATA BARRIER
Organizationalsilos
Lackofsystemsordatastandardization/integration
Dataqualityissues
Inconsistentcollectionofdata
Inadequatebudgets
Culturalresistance
Skillsavailability
Diﬃcultyextractingthedata/turningitintoinsights
DiﬃcultyprovingROI
Outdatedtechnology
Lackofanalyticstools/real-timeanalyticstools
Identifyingmeaningfuldatatocollectandanalyze
Lackofexecutivebuy-in
Customerprivacy/datasecurityconcerns
Increasingvolumesofdata
Datatimeliness
56%
48%
42%
40%
36%
34%
33%
31%
31%
31%
30%
28%
26%
26%
21%
17%

something—and then doing something
with it that’s valuable to customers—is
the real challenge.”
Similarly, the global financial services
company houses all of its own customer-
related data in a centralized data
warehouse but has not yet been able to
easily integrate behavioral data from
websites or social media. “We have to
go to several systems to get the whole
picture, and that can be tiresome,” said
the bank’s customer experience leader.
“In the future, we’d like to have all that
information in one place where we can
easily access it and cross-reference data
in various streams.”
The most important sources of
customer experience data are customer
relationship management systems (75%),
customer satisfaction surveys (53%),
social media tools (43%), feedback from
sales and retail staff (40%), email or SMS
(37%), and transaction data (34%). The
sources of data that are actually used
for customer experience are CRM (54%),
customer satisfaction surveys (52%),
websites (50%), contact center managers
(41%), and feedback from sales and retail
staff (31%). Very few companies are yet
using data coming in newer sources
such as mobile apps, internet-connected
devices, or wearables.FIGURE8
Creating a Platform for
Customer Experience Innovation
As important as breaking down
organizational barriers and acquiring
the requisite skills for customer data
gathering and analysis is putting in
place a technology foundation that’s
capable of delivering a single source of
customer truth. Even companies that
are committed to customer experience
improvement and innovation struggle
to integrate data in legacy systems
with new sources of customer data in a
streamlined and meaningful way.
Leading companies have invested in
databases and data warehouses that can
ingest both internal and external sources
of data across applications and channels,
but many have found that alone does
not solve the problem.
“It’s a struggle. We’ve got more data
than we can handle coming in from
different systems and sources, ” said
the CEO of a credit union, which uses
a data warehouse to pull in data from
various internal and third-party sources.
“Just because you pour it all into the
same container doesn’t mean you can
draw connections between disparate
data. There’s more than enough
information, but getting it all to mean
80%
60%
40
20
0
FIGURE 8
MOST IMPORTANT/MOST USED SOURCES OF CUSTOMER DATA
What sources of data are most important to delivering a superior customer experience, and what sources of data does your company
currently use to deliver a superior customer experience? [MULTIPLE ANSWERS ACCEPTED]
•IMPORTANT
•CURRENTLY USING
WEARABLES INTERNET
OF THINGS
OTHER
3RD-PARTY
DATA
ONLINE
REVIEW
DATA
PARTNER
DATA
MOBILE
APPS
FOCUS
GROUPS
POS
SYSTEMS
ERP
SYSTEM
CONTACT
CENTER
SYSTEMS
TRANS-
ACTION
DATA
SOCIAL
MEDIA
TOOLS
SALES
STAFF
FEEDBACK
EMAIL/
SMS
WEBSITE CUST.
SAT.
SURVEYS
CRM
SYSTEMS

FIGURE 9
UNDER HALF USE DATA TO ANTICIPATE AND PERSONALIZE
In which of the following ways do you leverage customer data to deliver or innovate
around the customer experience? [MULTIPLE ANSWERS ACCEPTED]
Improvedcustomerinsightforemployees
New/innovativecustomerengagement
Streamliningcustomer-facingprocesses
Improvingcustomerresponsiveness
Informnewproduct/servicedevelopment
Customized/personalizedCX
Identifyingcross-sell/upsellopportunities
IT/recordintegrationforcustomerpicture
Automate/introduceself-servicetoCX
Predicting/anticipatingcustomerengagement
Createomnichannelexperience
60%
55%
46%
43%
43%
42%
41%
39%
39%
37%
21%
finding and integrating new technologies
into a data platform.”
Increasing the Return on
Customer Data
Companies are most likely to leverage
customer data to deliver improved
customer insight to employees, engage
customers in new or innovative ways,
streamline customer-facing processes,
and improve customer responsiveness—
all important data-driven improvements.
FIGURE9 But those may soon become table
stakes as customers seek out companies
that can anticipate their needs and
customize experiences for them.
Approximately four out of 10
respondents said they have used or
will use customer data to customize
However, being able to ingest and analyze
such new sources of customer insight and
use that to inform and update a single
source of customer intelligence will be
a key competitive differentiator going
forward. Ingesting new sources outside
enterprise systems “is vitally important,”
says the credit union CEO. “We need to
use those small seeds of information
that may be easily overlooked. The key
is to have a very flexible system that can
ingest a variety of data in many forms. It’s
difficult to require normalized data from
each source.”
Legacy CRM systems—particularly
proprietary or highly customized ones—
are seldom a fit for such purpose. The
institutional investment and benefits
provider threw out its proprietary CRM
platform, replacing it with a software-
as-a-service option that, in conjunction
with a marketing automation system,
serves as the company’s technology
hub of customer insight. All other
applications and sources of data exist as
spokes feeding into that central source of
customer intelligence. “Over the years,
large organizations build up overlapping
technologies, and, very often, the
customer comes last. You have to strip
away those layers so that the customer
record has primacy. I’m not sure anyone
can get there by adding new platforms
into legacy systems structures.”
Figuring out how best to stitch together
these expanding sources of customer
data is itself becoming a competitive
advantage, says the CCO. “Our CRM and
marketing automation platforms are
the only systems connected to our data
warehouses and insights platforms, and
they are then used to deliver any type
of data or insight to any other platform
within the ecosystem seamlessly on
an as-needed basis. This approach
offers a lot of flexibility, simplicity,
and efficiency as we deal with ever-
increasing data sources and insights.”
The key is having “a data-rich,
aggregated dashboard that remains
consistent yet open to new forms of
data—the customer insight visualization
platform,” says the vice president of
IT at the software solutions provider
for logistics terminal operators. The
technology powering the dashboard
must be capable of elegantly weaving
together disparate data sources, he says.
“Success requires an ongoing process of
THETECHNOLOGY
POWERINGTHE
DASHBOARDMUST
BECAPABLEOF
ELEGANTLYWEAVING
TOGETHERDISPARATE
DATASOURCES

analyzing customer data to create more
personalized and anticipatory customer
service, sales, and product development
processes. As the online retail
performance marketing leader said,
one of the biggest customer experience
priorities is “anything that helps us
with personalization, because we are
moving toward a one-to-one approach to
customer experience.”
One reason more companies are not yet
prioritizing personal, predictive, and
omnichannel customer experiences
may be the disconnect between the
capabilities required to deliver those
kinds of singular customer experiences
and their level of mastery in those
areas. Ensuring that employees and
partners have access to the customer
data and analysis, creating automated
or streamlined business processes, and
having a single and reliable source of
customer intelligence were all deemed
critical, yet less than a quarter of
companies rated themselves as effective
in those areas. FIGURE11
For those with the right technology
architecture in place, providing
customer intelligence to employees and
partners can be a more straightforward
exercise than it is for those still
struggling with disparate customer data
and systems. But even then, there must
be clarity around how to act on that
insight. “Information needs to be both
robust and actionable,” said the senior
vice president of strategic analytics for
a marketing services provider. “[Even]
more important than giving staff access
to customer data or presenting analysis
is prescribing rules or means to make
smarter decisions via those data and the
derived intelligence.”
Customer experience excellence requires
“giving the right person the right data
at the right time,” said the credit union
CEO. “Too much data is useless, and
trying to match what I might need
now and what I have access to can be
difficult.” The credit union has made
significant progress identifying and
highlighting the next best action for
call centers to take with an individual
customer, for example. “Keeping a
consistent look and feel of the platform
allows team members to continue to
or personalize experiences for
individuals, while just 37% said they
use it to predict or anticipate customer
needs, and just one-fifth said they
are using customer data to create an
omnichannel experience. FIGURE10
Leaders, however, are more likely to
use data for predictive and personalized
customer experiences and to create
cohesive customer experiences
across channels. Indeed, the business
leaders interviewed for this report
were mapping customer journeys and
reorganizing around the customer
experience to create more seamless
omnichannel interactions. They were
FIGURE 9
UNDER HALF USE DATA TO ANTICIPATE AND PERSONALIZE
In which of the following ways do you leverage customer data to deliver or innovate
around the customer experience? [MULTIPLE ANSWERS ACCEPTED]
Improvedcustomerinsightforemployees
New/innovativecustomerengagement
Streamliningcustomer-facingprocesses
Improvingcustomerresponsiveness
Informnewproduct/servicedevelopment
Customized/personalizedCX
Identifyingcross-sell/upsellopportunities
IT/recordintegrationforcustomerpicture
Automate/introduceself-servicetoCX
Predicting/anticipatingcustomerengagement
Createomnichannelexperience
60%
55%
46%
43%
43%
42%
41%
39%
39%
37%
21%

But the biggest and most significant shift
will be in the use of advanced predictive
analytics to drive data-driven customer
experience decisions. FIGURE12
The senior vice president of strategic
analytics for the marketing services
provider is increasing investment in
technologies that offer more control
to the customer, including augmented
reality and self-service systems as well
as AI. Of course, emerging capabilities
such as advanced analytics, process
automation, or chatbots cannot
transform customer experience in
isolation. Only companies that put
in place the cultural, structural, and
technological foundations to take
advantage of such new approaches will
extract the full value from them.
“If you want to be an experience-led
business, any technology that can
provide a more personal and more
contextualized experience is going to
be very important in the future,” said
the CCO of the institutional investment
and benefits company, which is already
placing small bets in the areas of machine
learning and robotic process automation.
“One of the most important skill sets
of the future will be taking these new
modular technologies and integrating
those for single customer view, channel
focus on using the solution to generate
insights rather than focusing on the
tools,” adds the vice president of IT for
the software solutions provider. “The
key technology skills involve managing
the integration of multiple data sources,
obfuscating the complexity from the
customer experience managers.”
Automating and streamlining as much
a possible to free up employees and
partners to engage more effectively
with customers is also crucial. “We try
to automate as much as we can, from
sales to delivery and all the way to our
long-term support service,” says the vice
president of customer experience at the
software development firm. “It’s very
important because that enables us to
provide excellent customer experience
at an effective cost.”
The Future of CX: Advanced
Analytics and Artificial
Intelligence
A significant strategic shift is coming
in terms of the tools companies use to
deliver superior customer experience.
Website and email channels, which
are more dominant today, will become
much less business-critical. Meanwhile,
mobile apps, chatbots, and other
AI-driven tools will grow in importance.
FIGURE 11
KEY CUSTOMER EXPERIENCE CAPABILITIES/EFFECTIVENESS
How important is each factor in delivering a relevant and reliable customer experience?
How eﬀective is your organization in this area? [PERCENTAGE INDICATING 8,9. OR 10 ON A SCALE OF 1-10]
•IMPORTANCE
•EFFECTIVENESS
Ensuringstaﬀhasaccesstothecustomerdataandanalysisitneedstodeliverasuperiorcustomerexperience
Havingautomatedorstreamlinedbusinessprocessestofreeupemployeestodeliverasuperiorcustomerexperience
Havingasingle,reliablesourceofcustomerintelligence
Ensuringourstrategicpartnershaveaccesstothetoolsanddatatheyneedtodeliverasuperiorcustomerexperience
71%
24%
69%
23%
63%
22%
53%
20%
THEBIGGESTANDMOST
SIGNIFICANTSHIFT
WILLBEINTHEUSEOF
ADVANCEDPREDICTIVE
ANALYTICSTODRIVE
DATA-DRIVENCUSTOMER
EXPERIENCEDECISIONS

effectiveness with customer satisfaction
surveys (56%) than any other method,
followed by customer retention or repeat
sales (42%). EXHIBIT13
While customer satisfaction is one
metric that leaders use to take the
temperature of their transformation
efforts, it is typically not the sole
measure relied upon—or even
the most important one. Leaders
are considerably more likely to
look at metrics such as customer
lifetime value, customer advocacy,
and customer retention than their
counterparts—an approach that
better positions them to develop and
implement more targeted and fruitful
alignment, and the delivery of contextual
customer experiences. That’s the
real challenge—but it’s also the real
competitive advantage.”
New Ways to Measure
Customer Success
Even as it becomes clear that companies
that want to win on customer experience
must embrace new organizational,
technological, and process changes,
many business leaders continue to rely
on outmoded approaches to measuring
customer value.
Companies today are more likely
to measure customer experience
FIGURE 12
THE SHIFTING CX TECHNOLOGY TOOL KIT: ADVANCED PREDICTIVE ANALYTICS AND AI
WILL TAKE THE LEAD
What are the most important systems or tools your company uses to deliver a superior customer experience today? And which will be most
important two years from now? [MULTIPLE ANSWERS ACCEPTED]
•TODAY
•TWO YEARS FROM NOW
45%
Voicerecognition
Augmented/virtualreality
Imagerecognition
Intelligentagents/chatbots
Roboticprocessautomation
IoTtechnologies/sensors
Sentimentanalysis
Location-basedapplicationsAdvanced/predictiveanalytics
Self-servicetools
Mobileapps
Socialmediaplatforms
CRM
Email/SMS
Website
25%
5%
-15%

much effort it takes for a customer to
get something done with us, and how
we can reduce that.”
The Customer
Experience Payoff
Of course, what really matters to any
business is the bottom line. Customer
experience efforts are only a priority
insofar as they benefit the bottom line.
And it’s becoming clear that they do.
Leaders are outperforming others on
the customer experience leadership,
cultural, and skills fronts, which
explains why they are also more
effective on the process, technology,
and organizational alignment fronts.
FIGURE 14
That has led these organizations
to outperform their rivals and see
stronger revenue growth than their
competitors. A coordinated, clear,
and fully integrated customer-centric
transformation yields not just improved
customer experience quality but also
business growth.
The leaders interviewed for this report
were convinced that their customer
experience focus was critical to their
overall performance and would
continue to be so for the foreseeable
customer experience strategies and
tactics going forward.
“Surveys are only one piece of the
puzzle,” explained the credit union
CEO. “Identifying actual behavior is far
more important and gives us insight
into what customers actually do versus
what they say they do.” The online
fashion retailer uses a combination of
information from surveys, focus groups
and individual interviews, CRM data,
and online behavioral data to monitor
and adjust customer experience
efforts. “The combination enables us
to overcome the shortcomings of any
one method and build a more holistic
view of results,” said the company’s
performance marketing manager.
Net promoter scores and customer
satisfaction figures give the
institutional investment and benefits
company common metrics to compare
across business units and against the
competition, but they serve as only a
“high-level read on how we’re [doing]
with customers,” said the company’s
CCO. “Beyond that, we focus on
the metrics that matter. Unsatisfied
customers can stay because they don’t
see alternatives. Satisfied customers
still leave. So for us, the key metrics
are things like customer friction: how
FIGURE 13
HOW LEADERS MEASURE CUSTOMER EXPERIENCE
EFFECTIVENESS
How do you measure the eﬀectiveness of your customer experience strategy and tactics?
[MULTIPLE ANSWERS ACCEPTED]
•OVERALL
•LEADERS
60%
40
20
0
180
160
140
120
100
80
60
40
20
0
17% 22% 27% 27% 27% 32% 42% 56%
LIKES IN SOCIAL/
CUSTOMER SENT.
ANALYSIS
TOTAL
TOPLINE
SALES
CUSTOMER
LIFETIME
VALUE
CUSTOMER
ADVOCACY/
REFERRALS
NET
PROMOTER
SCORE
REVENUE
PER
CUSTOMER
CUSTOMER
RETENTION/
REPEAT
SALES
CUSTOMER
SATISFACTION
SURVEYS
159
133
119
future. Their biggest concerns were not
whether the efforts put into customer-
focused transformation would pay off,
but the challenge of making sure that
customer experience efforts remain a
top focus.
“There are always strategic choices
to be made, and other priorities
can overshadow the benefits of
improving the customer experience.
Nonetheless, we aim to improve
the customer experience whilst, for
example, replacing legacy systems,”
said the customer experience leader
at a financial services company. At
the online retailer in hypergrowth
mode, “a lot of things are happening,”
says the performance marketing
manager, noting that the launch of a
new collection can take precedence
over consolidating and analyzing
customer data. “Getting resources to
lock up the effort is always a challenge.
It’s not a matter of buy-in. There is
complete alignment and agreement
that this needs to happen. But things
are happening so fast, it can be hard
to keep up with everything.” The vice
president of customer experience at the
terminal technologies provider agreed.
“Overcoming competing priorities is
the biggest challenge we face on all
customer experience fronts.”
Ongoing vigilance will be important
for all companies. Even leaders that
may be ahead of their rivals in their
customer experience delivery have
by no means achieved mastery. They
have plenty of scope to improve their
data usage through a single-source of
customer intelligence system. They
too suffer from budgetary constraints
and the continually growing deluge of
customer data.
“There will always be new data
elements, and tools are getting better
and better,” said the credit CEO.
“We’re doing reasonably well. But
it’s something we can never become
complacent with. It’s a journey.” And
as it is one without a foreseeable end,
what the best companies can do is map
out a direction and pave the way for
ongoing improvement and innovation.
“Anyone that says they’re done with this
is mistaken, particularly as technologies
continue to evolve at a breakneck
pace,” says the CCO of the institutional

investment and benefits provider. “Our
goal is to lay a solid foundation and
create a technology environment that
will serve us well in the future.”
Call to Action
There is no debate: Customer
experience is and will continue to be
a key differentiator for all companies.
While there are significant cultural,
organizational, and technological
barriers to customer experience
transformation, there is also clarity
around the requirements to overcoming
them. Customer experience leaders will:
• Have unambiguous executive
support for customer experience
transformation
• Develop a clear customer experience
transformation strategy built
on desired customer experience
outcomes
• Create a customer-centric culture
throughout the enterprise
• Break down customer data and
organizational silos
• Align IT priorities with customer
experience demands
• Invest in next-generation customer
technology that can deliver a single
source of customer insight across
functions
• Partner with vendors and consultants
with experience and skills required to
collect, analyze, and act on expanding
volumes of customer data
• Empower employees to deliver and
innovate around customer experience
These efforts to reorganize around
the customer will only become more
important as customer requirements
evolve and expand and sources of
customer data continue to increase.
Those companies that are not able
to adapt to meet customer demands
with agility and speed will quickly
lose customers—and revenue—to
competitors that do.
7.43
5.90
FIGURE 14
LEADERS’ CX PROCESSES ARE MORE EFFECTIVE
How effective do you feel your organization is in delivering on/achieving each of these same
factors? How effective is your organization’s performance on each of these same attributes?
[RATED ON A SCALE OF 1 TO 10, WHERE 1 IS NOT AT ALL EFFECTIVE AND 10 IS EXTREMELY IMPORTANT/ EFFECTIVE]
•LEADERS
•FOLLOWERS
Understanding/visibilityofendCX
ClarityaroundCXvalue/ROI
SufficientCXprocess/systemsbudgets
ITdecisions/CXdemandsaligned
Datasystemsintegratedacrosschannels/products
Datavisibilityacrossallfunctionalareas
StreamlinedprocessesfreestaffforCX
Single,reliableCIsource
8.26
6.61
7.84
6.29
7.55
6.28
7.52
6.06
7.46
5.78
7.22
5.78
7.09
5.52
BASE: BEST IN CLASS N=100, FOLLOWERS=364

METHODOLOGY AND PARTICIPANT PROFILE
A total of 682 respondents completed the survey, including 367 who are members of the
Harvard Business Review Advisory Council. All the respondents had knowledge of their
organization’s CX across channels, business lines, and products.
SIZE OF ORGANIZATION
ONLY ORGANIZATIONS WITH 100 OR MORE EMPLOYEES TOOK PART IN THE SURVEY
37%
10,000 +
EMPLOYEES
29%
1,000 – 9,999
EMPLOYEES
34%
100 – 999
EMPLOYEES
SENIORITY
21%
EXECUTIVE
MANAGEMENT OR
BOARD MEMBER
32%
SENIOR
MANAGEMENT
30%
MIDDLE
MANAGEMENT
17%
OTHER
LEVELS
KEY INDUSTRY SECTORS
14%
MANUFACTURING
14%
FINANCIAL
SERVICES
13%
TECHNOLOGY
9%
CONSULTING
7%
OTHER
JOB FUNCTION
15%
OPERATIONS/
PRODUCT
MANAGEMENT
10%
SALES/BUSINESS
DEVELOPMENT
9%
MARKETING/
COMMUNICATIONS
9%
HR/TRAINING
7%
OTHER
REGIONS
35%
NORTH AMERICA
34%
EUROPE, THE
MIDDLE EAST,
AND AFRICA
23%
ASIA/PACIFIC
8%
SOUTH/CENTRAL
AMERICA

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