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The customer-experience mandate:

Build lasting engagement with better

websites

 

Paul Burns

December 17, 2014

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TABLE OF CONTENTS

Executive Summary ... 3

The changing dynamics of digital marketing ... 4

Accelerating technology requirements ... 6

Architectural 0ptions ... 9

Fulfilling your requirements ... 12

Selecting the right partners ... 13

Key takeaways ... 14

About Paul Burns ... 15

About Rackspace ... 15

About Gigaom Research ... 15

 

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Executive Summary

Today, customers expect more than ever from the digital engagements they conduct with their favorite brands. Which means simple, functionally basic websites are no longer enough.

While digital customers still need a fast and easy way to find information about available product lines, business hours, and addresses, they want much more: video testimonials of products in action, real-time inventory and shipping times, and assurances that their internet purchases are safe and secure. They also crave less-tangible features. They want engagement. They want to do business with companies and brands that understand them and cater to their unique needs. In return, they reward these businesses with loyalty, referrals, and increased spending.

Businesses wanting to build lasting relationships between brands and customers must offer immersive, seamless web experiences that attract and engage customers. CIOs need to understand the new standard and new expectations for digital marketing, and IT leaders need to provide updated platforms for web content management (WCM), ecommerce, social media, analytics, and rich content. They also need these platforms to run on flexible, high-performance IT infrastructure so that customers can get lost in the experience — even when traffic explodes without warning.

This report will help CIOs, IT leaders, and senior technologists understand how to deliver on this new mandate and enable customer-experience management.

Key highlights from this report include:

• Experience commerce — the growing need to deliver a fusion of the best interactive customer experience with seamless online commerce — is quickly becoming the competitive differentiator for online customer engagement.

• Enabling marketing to own and drive customer-experience management is now a core IT responsibility.

• IT leaders must provide updated web platforms and support them with flexible, high-performance IT infrastructure.

• Delivering on the experience commerce mandate means IT leaders must utilize updated web-content management (WCM) platforms, use big data analytics, integrate ecommerce with

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engaging digital experiences, choose the right partners, and reliably assess architectural requirements.

The changing dynamics of digital marketing

The last two decades have seen a momentous shift as businesses from all industries transition from brick-and-mortar transactions to digital forms of commerce. Sales and other interactions are now taking place on websites, mobile devices, and other digital fronts as customers graduate to more accessible and

personalized forms of product engagement. In the third quarter of 2014, the U.S. Census Bureau reported that online sales had increased 16.2 percent year-over-year. The evolution of ecommerce has fueled customer expectations and demands, which in turn are driving new technology requirements within IT organizations.

An exceptional online experience is now critical for building ongoing relationships between brands and customers. The number of businesses designing and building ecommerce platforms continues to grow as they realize the importance of providing a dynamic and meaningful online experience.

Competitive differentiation is also essential for successfully attracting new business. Businesses only have seconds to impress and engage customers in digital environments. The probability of visitors leaving a webpage is at its highest during the first 10 seconds of interaction, so powerful first impressions are key. Consumers today are tech-savvy, independent, and often impatient, and they expect a highly streamlined ecommerce experience across devices.

Customer-experience management

Digital marketing, ecommerce, and the growing need to deliver the best customer experience online have given rise to a new approach to customer engagement called experience commerce. New technology is driving opportunities for more meaningful customer interaction that closely ties digital marketing with the customer experience. One popular example is big-data analytics, which has enabled businesses to deliver personal recommendations according to customer behavior and buying preferences.

Companies around the world are taking experience commerce to new levels. Pinterest, an online company primarily focused on discovery and exploration, has extended its platform with capabilities that

demonstrate the powerful potential of experience commerce. With the introduction of “product pins,” businesses can provide real-time pricing, availability, and outlet information to Pinterest users through pinned products. Users then receive automatic notifications when their pinned products drop in price.

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Businesses with experience commerce tools, like product pins, gain customer engagement as well as valuable insight into customer response.

Customers are demanding richer, more personalized forms of engagement than ever before, and

marketers are looking to IT for support. Businesses want to take advantage of big data to deliver personal recommendations on their brand’s ecommerce platform, and they need the ability to deliver rich media across multiple channels and devices.

Expectations for digital marketing to produce tangible, measurable results are at an all-time high. Advanced technology is the only way to support this evolving approach to customer engagement. Today, IT leaders must do more than simply enable websites for consumer purchases. They must focus on developing and managing WCM and ecommerce solutions that deliver a fulfilling, engaging customer experience. Enabling marketing to own and drive customer-experience management is now a core IT responsibility.

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Accelerating technology requirements

Traditional approaches to website development simply can’t support the new requirements for customer-experience management. IT organizations have been building websites from scratch, which is expensive and leads to maintenance and upgrade challenges. As they add new websites and environments, they have found few ways to perform centralized management or integrate multiple sites for holistic, cross-platform control.

Today, IT leaders are re-platforming websites and using purpose-built solutions to enable customer-experience management. Many have adopted commercial and open-source WCM platforms to streamline the time-consuming and costly processes of designing sites and managing extensive content libraries, as well as to simplify collaboration and administration across digital environments. The percentage of websites managed with WCM systems grew by 61.4 percent from 2011 to 2014. IT leaders are also

purchasing and integrating updated ecommerce platforms that support mobile devices and utilize elastic, scalable backend infrastructure. IT organizations are upgrading these platforms frequently to keep up with new capabilities that enhance customer engagement.

The necessary IT infrastructure for delivering these new platforms plays a critical role, and IT

organizations must accelerate infrastructure updates to keep up. The growth of rich, customized, and dynamic content requires more than the typical vanilla infrastructure used to host standalone websites. Similarly, the possibilities enabled by big-data analytics require capable infrastructure to perform data-intensive calculations and correlations. The world of experience commerce is dynamic, and backend infrastructure must support both intentional and unintentional demand fluctuations to provide a smooth, high-performance end user experience.

The struggle for IT to keep up

Enterprise IT organizations are already stretched thin by existing responsibilities, and their constrained budgets offer little flexibility. Many are also tied down to fixed rather than flexible infrastructures. Customer-experience management presents a new set of challenges for these organizations.

IT organizations need high-performance hardware throughout the IT stack, including storage, in order to sustain fast load times and maintain a satisfactory end user experience. They need expertise in designing and implementing new architectures that support requirements for a highly consistent end-user

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organizations must ensure that all touch points — both mobile and web — live up to new standards across distributed points of access.

The fact is that many current infrastructure platforms, whether onsite or hosted, are not sufficient to meet these new demands. For example, a single dedicated server may handle a large amount of web traffic for a standalone website, but it isn’t suited to the queries and processing needed to serve up personalized content based on prior purchases. Fixed infrastructure can’t scale out with dynamic

fluctuations in demand and can’t deliver rich media to a mix of browsers and mobile applications across geographic locations without first being architected into a content delivery network (CDN).

Technology is improving rapidly, and modern infrastructure, including cloud-computing environments, can provide important benefits for IT organizations moving toward customer-experience management. Virtualized cloud environments provide the elasticity needed to scale infrastructure resources with consumption-based economics. They also provide the agility to rapidly adjust capacity according to unexpected fluctuations in demand. By incorporating new forms of infrastructure into their web platforms, IT can achieve the performance, availability, and consistency they need to deliver an exceptional online experience.

Technology requirements for supporting customer-experience management

Several core dimensions to customer-experience management are driving the need for new IT infrastructure.

Experience commerce. Infrastructure expertise is becoming an increasingly valuable asset for

designing and supporting experience commerce. IT leaders must ensure that infrastructure is available to support their growing requirements. For example, a website that delivers personalized recommendations while customers browse an online catalog must have a highly tuned architecture to deliver massive amounts of data simply, quickly, and on a global scale.

Performance. Customer expectations for a fast, consistent online experience are driving the need for performance at every layer of the IT stack. Up to 40 percent of online shoppers will abandon an

ecommerce site after only three seconds of load time. Maintaining fast load times is crucial for both customer satisfaction levels as well as online sales conversions. The ability to scale the underlying infrastructure in accordance with demand is essential.

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manage this data in real-time without affecting the performance of other systems. Businesses will need to perform storage audits to satisfy regulatory requirements and troubleshoot service issues, so an accurate log of customer transactions and data is essential. IT organizations must also establish replication to ensure the preservation of their most important data assets.

The distribution of rich media content to website visitors is a growing challenge of experience commerce. Video, audio, and images not only require large amounts of storage capacity, they also require highly capable storage systems that enable performance, security, and reliability. Whatever type of storage system is chosen — direct attached, shared SAN, dedicated SAN, or NAS — must support the expected number of simultaneous users as well as unexpected fluctuations in demand.

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Architectural 0ptions

Effective customer-experience management depends largely on whether IT organizations incorporate state-of-the-art infrastructure architectures that support the requirements of rich media, dynamic

content, web and mobile devices, and big data analytics. Backend infrastructure must provide the desired levels of performance, resilience, and availability, and should scale to support fluctuating demand. It should also provide a highly secure environment for customer transactions and other sensitive data. New architectures should focus on aligning costs and economics with the value returned by the web platform. At a detailed level, the architectural needs of web platforms can vary significantly. However, these requirements deviate along some well-known dimensions, including price, performance, and scale, so a relatively small number of reference architectures can support a very large variety of digital marketing systems.

High-level architectures

The following descriptions demonstrate two architectures that enable customer-experience management. Keep in mind that these options represent two ends of a spectrum. A more detailed experience commerce strategy is needed to arrive at the corresponding architectural plan.

Cost effective, reliable. A cost-effective, reliable architecture is ideal for small and medium

businesses (SMBs) that want to achieve more than 99 percent uptime on their platforms without compromising economic efficiency. This architecture typically includes:

o Two-tier cloud-based architecture — cloud databases with reliable storage plus separate servers for display logic and shopping cart logic

o Content delivery networks

o Management capabilities, including monitoring and backup

o Cloud-based load balancing to support unexpected events

o Third-party payment gateway for credit card information

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High-performance, large-scale. Some companies require a high-performance, large-scale

architecture that supports dynamic scaling for steady high demand as well as unexpected spikes. This architecture typically includes:

• Multiple tiers, with web and application logic as well as load distributed across multiple systems

• A mix of infrastructure — dedicated hardware for high-performance databases plus elastic cloud

application servers for economics and/or bursting

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• Advanced controls, including APIs to manage infrastructure services and VLANs to securely partition traffic

• High-performance, large-capacity block storage

Keep in mind that traditional infrastructure, whether on-premises or hoste, may not support these architectures. Having the right infrastructure platform is critical for supporting today’s digital marketing initiatives. As their needs grow, businesses may also move from basic to more advanced architectures. This means the infrastructure platform should support both current needs and future needs as well.

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Fulfilling your requirements

When preparing to engage in customer-experience management, IT organizations should consider their own specific requirements within four categories. They should also evaluate whether using a partner will be more effective than a do-it-yourself approach.

1. Expertise. Architecting a web platform that enables customer-experience management requires multiple types of expertise. Architectural expertise is a necessity, as well as management and operating expertise. Many businesses also need platform-design expertise to deliver a holistic ecommerce experience that encourages brand engagement across marketing fronts.

2. Experience commerce. IT organizations must assess what type of backend infrastructure they’ll need to support modern web platforms. This means determining the amount of backend compute and storage required for highly consistent performance. IT should also factor in which systems they need to enable personalized forms of customer engagement, including rich-media delivery, databases, data queries, and analytics to drive customization. Experience with a variety of WCM and ecommerce platforms, along with experience integrating them with related systems, is crucial.

3. Fast response times. Online consumers are distributed across many geographic regions.

Businesses must consider the location of their audience as well as the types of devices they will use to access their ecommerce platform. A large amount of bandwidth may be needed to deliver content to distributed endpoints with the speed and consistency customers demand. Latency can be even more critical, requiring services such as CDNs with points of presence close to website visitors. Experience with CDN integrations is important for achieving fast response times.

4. Storage. The right storage performance and capacity is essential for managing customer data in ecommerce environments. IT organizations must assess the types of digital assets they’ll be managing, including data related to customer transactions and behavior as well as data generated by underlying systems. Storage infrastructure will need to accommodate the growth of these assets, so IT

organizations should plan accordingly. They must also determine whether they have the experience required to keep up with new storage technologies, changing performance demands, and high availability requirements for modern sites.

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Selecting the right partners

The challenge of meeting all these requirements makes enterprises look increasingly to outside expertise for help designing and implementing architectures that support new digital-marketing demands and enable customer-experience management. Selecting the right partner can mean the difference between success and failure.

Businesses must look beyond basic requirements to determine whether partnering could optimize platform design, development, and delivery. Creative advisors are a valuable resource, even for IT organizations that have design experience of their own. These consultants specialize in designing engaging platforms that provide a user-centric online experience across media devices, and stay up to date on the latest design patterns.

A hosting partner is another necessity for businesses that lack the modernized infrastructure to support customer-experience management. Gaps in existing infrastructure, such as slow storage systems,

inflexible hardware, and the lack of a CDN are all reasons to partner with a hosting provider. Additionally, a hosting partner can help IT overcome gaps in expertise related to management and maintenance of backend infrastructure.

Choosing the right hosting partner to support customer-experience management has never been more important. IT organizations will need different types of hosting services. Some businesses require content delivery, while others simply require backend infrastructure. Many will want to take advantage of new hosting services, such as cloud computing, for scale-out architectures and elasticity. Cloud hosting can also improve management agility and lead to higher rates of utilization and associated cost savings. Businesses should consider their higher-level requirements as well, such as expertise and experience. Some hosting providers are mature enough to act as strategic partners to the business. They often have experience deploying thousands of solutions — from simple, small sites to complex, global platforms — and can assist businesses in choosing the right services. They can also give more detailed advice on what infrastructure will align with the guidelines set out by creative advisors.

Every business should look for two essential attributes in a hosting partner. First, the provider should offer the right infrastructure backbone for supporting customer-experience management on a global scale. Second, the provider should also have features and capabilities that enable enterprises to expand their web platforms to accommodate customer growth, support changing demands, and take advantage of new

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Key takeaways

Experience commerce is quickly becoming the new standard for online customer engagement, as digital marketing, ecommerce, and the growing need to deliver the best customer experience online are now focal points and competitive differentiators for the business. IT leaders have a new responsibility to provide updated web platforms, and they must support these platforms with flexible, high-performance IT infrastructure.

To deliver on their new mandate — enabling customer-experience management — IT leaders must:

• Utilize updated WCM platforms that streamline and centralize the process of designing, developing, and managing sites in multiple digital environments

• Integrate ecommerce with rich, engaging digital experiences across web and mobile devices • Use big-data analytics and other experience commerce tools to deliver highly personalized,

customizable forms of customer engagement

• Assess architectural requirements, eliminate gaps in infrastructure — especially storage — and accelerate the adoption of updated infrastructure to support new web platforms

• Choose the right partners, including creative advisors that specialize in designing user-centric online

experiences, and hosting providers that offer the right infrastructure backbone on a global scale. Today’s businesses need more than a simple website to provide an engaging, fulfilling online experience. They must realize the need for customer-experience management to build the types of lasting

relationships that drive repeat sales and yield greater returns.

With the right approach to customer-experience management, IT organizations can unlock the true value of experience commerce and deliver an online experience that transforms the way businesses engage and sell to their customers.

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About Paul Burns

Paul Burns is a Gigaom Research Analyst and the president and founder of Neovise, an IT industry analyst firm launched in 2009 to focus on cloud computing. Burns also writes articles for industry publications, speaks at industry events, and is quoted by a variety of media organizations.

Burns has over 25 years of experience in the IT industry, driving strategy for enterprise software solutions through product management, competitive analysis, and business planning. He has held a series of leadership positions in marketing and R&D, and he was research director of the IT service management practice at another industry analyst firm. Burns earned both a B.S. in Computer Science and an M.B.A. from Colorado State University.

About Rackspace

Rackspace® (NYSE: RAX) is the #1 managed cloud company. Its technical expertise and Fanatical Support® allow companies to tap the power of the cloud without the pain of hiring experts in dozens of complex technologies. Rackspace is also the leader in hybrid cloud, giving each customer the best fit for its unique needs — whether on single- or multi-tenant servers, or a combination of those platforms. Rackspace is the founder of OpenStack®, the open-source operating system for the cloud. Based in San Antonio, Rackspace serves more than 200,000 business customers from data centers on four continents.

About Gigaom Research

Gigaom Research gives you insider access to expert industry insights on emerging markets. Focused on delivering highly relevant and timely research to the people who need it most, our analysis, reports, and original research come from the most respected voices in the industry. Whether you’re beginning to learn about a new market or are an industry insider, Gigaom Research addresses the need for relevant,

illuminating insights into the industry’s most dynamic markets.

 

Visit  us  at:  

research.gigaom.com.

© 2014 Giga Omni Media, Inc. All Rights Reserved.

This publication may be used only as expressly permitted by license from Gigaom and may not be accessed, used, copied, distributed, published, sold, publicly displayed, or otherwise exploited without the express prior written permission of Gigaom. For licensing information, please contact us.

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