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“The world’s most valuable resources is no longer oil. It’s data.”
As digital technology advances, we are seeing an explosion of data, which is being generated by countless sources, ranging from IoT devices to social media feeds to online transactions. In fact, approximately 90% of the data available today was created in the last two years alone.
Digital technology is also reshaping customer expectations. Today’s consumers expect highly personalized brand experiences that respect their privacy while delivering value in terms of time or cost savings.
In my role at Microsoft Advertising, I spend a lot time thinking about data and how we as marketers can leverage this limitless resource to create the kinds of customer-centric experiences that consumers expect.
Introducing the Customer Experience Quotient
We recently partnered with Advertiser Perceptions to get a better understanding of how well marketers are 1) understanding the customer journey and 2) marketing to the customer based on that understanding.[i] As part of our study, we surveyed and interviewed more than 200 marketers from companies and agencies of all sizes across all industries. Their capacity to understand and market to the customer journey is what we call the “Customer Experience Quotient”—or CXQ for short.
It turns out that about 20% of marketers are doing both very well, regardless of company size, marketing focus, or vertical. These marketers are creating impactful customer journey touchpoints that are fueling the marketing flywheel—meaning that the more customer touchpoints they create, the more actionable data they acquire to create even more personalized touchpoints. It’s a virtuous cycle that is helping them drive revenue and expand the gap between themselves and their competitors.
We found that these “High Performers” have three key traits that are enabling them to fuel the marketing flywheel with customer-centric touchpoints. And if you develop these traits, you too can harness data to improve your CXQ capabilities.
- Implement an effective data strategy
All the High Performers in our study have an effective data strategy that incorporate some key components.
First, they have the right talent. High Performers have an intentional strategy to understand every touchpoint between their brand and their consumer. We found that 91% have a fully dedicated lead—whether a customer journey officer or chief strategy officer—designated to understand and market to the customer journey.
Second, we found that High Performers tend to invest more in their digital marketing plan overall. We found that 71% of High Performers are more willing than their counterparts to invest in emerging channels such as native advertising and platforms like Snap.
Finally, we found that High Performers are twice as likely to leverage cloud solutions to overcome customer decision journey marketing barriers. They prioritize combining internal and external data because they know that data integration is the holy grail for a comprehensive customer view. It’s not always easy to get this, which is why High Performers often rely on martech partners, agencies, and DMPs.
- Tap the power of Artificial Intelligence (AI) and Machine Learning (ML)
As the customer decision journey gets more complex and less linear, marketers must look to smart technologies to help anticipate customer needs. High Performers are three times more likely to use AI for personalization, dynamic pricing, custom content generation, chatbots, and more.
High Performers are also taking advantage of ML, which is a subset of AI, to predict consumer behavior. They are anticipating what consumers plan to do in the future and then using those insights to market to them. Other areas where High Performers are using ML include lead scoring, A/B website testing, site optimization, personalization, and informing multi-touch attribution.
High Performers are seeing multiple benefits from their use of AI and ML, including increased revenue and sales, improved ability to act on customer data, and better performance and ROI. And because these technologies complete tactical work on their behalf, marketers have more time to focus on other areas such as messaging, privacy, and inclusiveness.
- Prioritize trust and privacy
When we think about today’s world, trust, privacy, and the protection of data are some of the most important issues we face. In the last year, in almost all our studies, trust and privacy were cited as top concerns.
High Performers know this and place a premium on brand trust. In fact, they’re nearly five times more concerned than their counterparts about consumer backlash around consumer privacy.
They’ve responded in multiple ways like avoiding cookie tracking, focusing instead on first-party data. They’re moving away from deterministic, cross-device tracking to probabilistic data models. They’re creating internal standards for data collection that comply with guidelines such as the California Consumer Privacy Act. And they’re being more open with consumers, giving them greater control of their data and helping them to understand the value exchange when they are asked to provide data.
Benchmark your CXQ capabilities
To increase your CXQ aptitude, take time to assess where you are on the journey compared to High Performers. Ask questions like:
- Do we have dedicated talent focused on understanding and marketing to the customer journey?
- Are we prioritizing the collection and use of internal and external data?
- Have we unified this data in the cloud to provide a consolidated view of the customer?
- Are we using AI and ML to maximize this data?
- Are we prioritizing privacy and data protection?
- Are we predicting next best action and marketing to the customer journey?
Once you’ve identified gaps, seek out ways to increase your CXQ aptitude. Work with agencies and martech providers to do the things you can’t. Embrace cloud technology and work with partners and solutions that are already using AI and ML. Put privacy and data protection practices into place.
The reality is that we are no longer in the age of digital marketing. We are marketing in the digital age. Bear that in mind as you think about your customer experience strategy.
[i] Microsoft and Advertiser Perceptions study of 213 marketers and agencies in the US & UK, December 2018–January 2019