Optimizing The Digital Customer Experience Marketers Must Adopt And Embrace Continuous Optimization

Commissioned By Qubit

Optimizing The Digital

Customer Experience

Marketers Must Adopt And Embrace

Continuous Optimization

Table Of Contents

Executive Summary ... 3

Shift Focus From Engagement Channels To Customer Engagement To Boost Customer Experience ... 4

Poorly Optimized Customer Engagements Result In Failure To Delight Customers ... 6

To Succeed, Organizations Must Adopt And Embrace Continuous Optimization Techniques... 7

Close The Gap By Building And Continuously Assessing A Road Map ... 12

Key Recommendations ... 13

Appendix A: Methodology ... 14

Appendix B: Demographics ... 14

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Executive Summary

Today’s customers are highly demanding. Empowered with multiple digital means of engaging with brands and their competitors, they expect to find information and purchase products at any time and from any location. But there is a problem. Brands are struggling to compete in the new digital age of the customer. The delivery of great customer

experience is a businesswide task that relies upon

unprecedented real-time collaboration between teams and departments. Taking this approach to a competitive level demands that marketing and eCommerce professionals adopt a continuous optimization approach.

Continuous optimization strategies enable competitive differentiation by maximizing the opportunity of every customer engagement across the entire customer life cycle and across all interactive channels. Any move toward continuous optimization requires the stitching together of disparate technologies and siloed customer data

engagement points with a seamless flow of data and insights between tools, applications, and teams.

In January 2015, Qubit commissioned Forrester Consulting to evaluate the current state and strategies of organizations and how they are moving toward delivering on the essential components of continuous optimization. We conducted an in-depth survey with 150 digital marketing and eCommerce decision-makers in France, Germany, the UK, and the US.

The online survey was supplemented with five in-depth phone interviews with senior marketing decision-makers at eCommerce organizations. The study revealed key components of the state of continuous optimization that include a unified technology architecture and customer profile. These both contribute to a brand’s capability to optimize every single customer engagement to deliver an evolving, meaningful, and ultimately optimized customer experience.

KEY FINDINGS

Forrester’s study yielded three key findings:

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customer, firms are realizing they cannot simply improve customer experience “at the margins” or in a channel vacuum. Customers are effortlessly moving through digital and nondigital channels, engaging with brands on their terms. Surveyed digital marketers understand that in order to win, serve, and retain their fickle customers, creating a seamless, consistent, and personalized experience is the key to meeting their needs.

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Organizations are finding that delivering this seamless, consistent, and personalized customer experience is much easier said than done. Surveyed marketing leaders understand that they must address technology and data requirements, analytics competencies, and organization challenges to deliver on their customer experience aspirations.

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preferences are ever-changing, firms must not rest on the laurels of past tests, analysis, and improvements.

Marketing and eCommerce pros understand the need to create an environment of perpetual learning and

refinement via the adoption and employment of continuous optimization. To maximize value from

continuous optimization, organizations must first close the digital intelligence maturity gap.

Continuous optimization is a strategic, analytics-driven approach that leverages customer insights and is focused on constantly learning from and optimizing every customer engagement to enhance the overall customer experience.

Shift Focus From Engagement

Channels To Customer Engagement

To Boost Customer Experience

In today’s business ecosystem, customers are in the driver’s seat. They are increasingly empowered as they become more connected. The challenge for organizations today is to ensure that business-to-customer interactions meet

customer experience requirements. Customers engage with brands across multiple touchpoints throughout the buyer life cycle (see Figure 1). Customers know that they want to be able to engage with a brand on their terms — whether that’s by browsing the aisles at a big-box electronics retailer or conducting price comparisons via a mobile app. To compete on experience, organizations must create a seamless and relevant customer experience across all potential interaction touchpoints.

To support this, organizations are continuing to invest in improving digital customer experience to shift the experience from being channel-focused to a holistic customer engagement. They understand that a sound customer experience strategy (and the vital technological architecture necessary for execution) has broad and deep implications. Digital marketing and eCommerce

professionals revealed that they are investing in digital customer experience to:

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an organization’s investment in digital customer experience is revenue growth (see Figure 2). Marketing leaders also expect customer acquisition gains (31%), differentiation from emerging (31%) and traditional competitors (21%), and cost savings from an improved digital customer experience (29%).

“The biggest gain we’re seeing is in profitable revenue via quality acquisition and increased retention. Roughly 80% of our customers are new, so we need to continually differentiate our brand to potential customers, and then ensure relevance and value to retain these customers. By investing in key drivers of customer experience, we’re seeing measureable results.”

- An executive for a men’s apparel retailer

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enhancing customer experience. Knowing how, when, where, and by which method or device a customer is

engaging with your brand is one of the building blocks to delivering a great customer experience. A third of

respondents are leveraging digital to gain better customer insights. Without these insights, firms will be unable to personalize their customers’ experience to their unique needs.

FIGURE 1

Consumers Use Multiple Touchpoints To Engage With Brands Throughout The Customer Life Cycle

Source: Forrester Research, Inc.

Web (se arch, comparison shopping, etc.)

Company website Social (social network, revi ews, community, etc.)

Mobile (apps, mobile Web) Tablet (apps, Web)

Branch/store In-store devi ce (kiosk, associate devi ce, etc.) Call center Digital content (video, editorial, etc.) External digital touchpoints Branded digital touchpoints Traditional touchpoints E xp lo re Buy E_n g_a g_e Dis cove r

AN OMNICHANNEL CUSTOMER ENGAGEMENT FOCUS DELIVERS GREAT CUSTOMER EXPERIENCE AND BUSINESS VALUE

Firms recognize that a sound customer engagement strategy will result in a better customer experience. By shifting from a channel-focused approach to a fluid customer engagement strategy, firms will be better equipped to (see Figure 3):

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two-thirds (64%) of organizations identified greater personalization as a key component of their customer experience strategy.

“Personalization is a key corporate objective. Utilizing data to create a personalized experience is the single biggest focus for our organization.”

– eCommerce director for major online shopping retailer

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more firms know about their customers, the better they can target them and drive more meaningful engagements. Sixty-four percent of marketing leaders identified more targeted marketing as a key way their digital customer experience strategy influences customer engagement.

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continues to delight customers will ensure repeat engagement. Over 60% of respondents also highlighted this as a key attribute for their digital customer experience strategy. A savvy marketer will capitalize on this loyalty and leverage brand and product tastes to serve up complementary products to increase upsell and cross-sell opportunities.

FIGURE 2

Organizations Leverage Customer Experience Strategies To Drive Revenue Growth And Gain Better Customer Insights

Base: 150 digital marketing and eCommerce decision-makers at organizations with more than 500 employees

Source: A commissioned study conducted by Forrester Consulting on behalf of Qubit, January 2015

FIGURE 3

Sound Customer Experience Strategy Drives Customer Engagement

Base: 150 digital marketing and eCommerce decision-makers at organizations with more than 500 employees

Source: A commissioned study conducted by Forrester Consulting on behalf of Qubit, January 2015

Poorly Optimized Customer

Engagements Result In Failure To

Delight Customers

While marketing leaders acknowledge the impact of a sound customer engagement strategy on customer experience, most are not in a position to optimize engagements at scale. In fact, more than three-quarters (76%) of the marketing leaders surveyed indicated that the majority of their digital customer engagements are not optimized today. To optimize engagements at scale, organizations must address and remedy data, organizational, and technology challenges.

ORGANIZATIONS ARE HINDERED BY DATA,

ORGANIZATIONAL, AND TECHNOLOGY CHALLENGES In this “age of the customer”, insights are needed to drive optimized actions within moments of engagement. However, omnichannel optimization programs fall flat if a firm cannot track customers by stitching together data from multiple customer touchpoints. When leveraging data and analytics to enhance the customer experience, survey respondents highlighted that the biggest challenges hindering progress toward improving digital customer experience are (see Figure 4):

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inability to tie together customer data as the biggest obstacle when leveraging data and analytics to enhance the digital customer experience. This forces organizations to engage customers in a channel-based manner, rather than with a holistic customer-engagement focus.

“The biggest roadblock for us is connecting different customer touchpoints to construct a continuous engagement experience for each customer.”

- An executive for a high-end women’s apparel retailer

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resources. Thirty-five percent of the respondents cited

lack of investment in the technology and analytics needed to improve a customer experience strategy as a main challenge they’re facing when leveraging data to enhance their digital customer experience. In addition, 31% of respondents cited organizational/cultural shortcomings

that stop them from embracing data-based decisions to enhance digital customer experience.

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third of organizations surveyed that are looking to leverage data and analytics to enhance their digital customer experience are struggling to keep up with the volume and variety of data that that flows in.

Marketing leaders also run into significant technology and measurement barriers when effectively executing their customer experience strategy (see Figure 5). Marketing decision makers told us they struggle with:

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than half (51%) of those surveyed said finding the right technology partner is their biggest challenge when executing their digital customer experience strategy. This is not surprising, given the suite of services and support

FIGURE 4

Disparate And Poorly Integrated Data Sources Are The Biggest Challenges When Leveraging

Analytics

Base: 150 digital marketing and eCommerce decision-makers at organizations with more than 500 employees

Source: A commissioned study conducted by Forrester Consulting on behalf of Qubit, January 2015

necessary to carry out an impactful digital customer experience strategy.

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technologies are unable to keep up with the demands of increasing data volume and variety necessary to drive real-time customer insights. Over 40% of digital marketing and eCommerce leaders indicated that one of the biggest challenges they face when executing their digital

customer experience strategy is poorly integrated legacy systems.

“We struggle with developing, managing, and serving up the content necessary to provide tailored experiences. We can’t keep up.”

- An eCommerce and CRM leader for a high-end men’s apparel retailer

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conflicting KPIs between departments stifle execution of their customer experience strategy.

To Succeed, Organizations Must

Adopt And Embrace Continuous

Optimization Techniques

The delivery of great customer experience is a

businesswide task that relies upon unprecedented real-time collaboration between teams and departments. Taking this approach to a competitive level demands that marketing and eCommerce professionals adopt a continuous optimization approach. Continuous optimization strategies maximize the opportunity of every customer engagement across the entire customer life cycle and across all

interactive channels. Almost all organizations surveyed see some value from optimization techniques, and many have near-term plans to increase the employment of these techniques. An overwhelming majority of survey

respondents (89%) indicated they have plans to connect and optimize engagements to deliver richer customer experiences in the next 12 months.

“Adoption of these optimization techniques builds a superior customer experience. My company’s site has over 200,000 products spanning 170 countries. Continuous optimization techniques create a personalized journey with ‘less effort,’ serving up content that best fits the customer. I’ve seen a lift in KPIs like average order value (AOV) as a direct result.”

- A digital marketing director for an eCommerce fashion retailer

When asked about the value in specific optimization techniques, survey respondents revealed they see value from (see Figure 6):

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journey on their website by utilizing web analytics to monitor and track the customer’s online behavior. The large majority (86%) of respondents see value in this technique. Several marketing leaders interviewed

referenced their ongoing initiatives to better segment, test, and optimize customer behavior throughout the

engagement funnel. All respondents interviewed alluded to the requisite expertise of proper analytics to support these initiatives.

FIGURE 5

Customer Experience Partnerships Are Also A Challenge

Base: 150 digital marketing and eCommerce decision-makers at organizations with more than 500 employees

Source: A commissioned study conducted by Forrester Consulting on behalf of Qubit, January 2015

“Creating a single view of our customer online and offline touchpoints, will allow for more

personalization and predictive modeling. Device analytics is critical, as our sales continue to shift more online.”

- eCommerce executive for a menswear retailer

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customer’s attitudes and perception toward a brand is crucial to gain customer insights on how to best optimize the customer experience. Some 85% of survey

respondents see value in optimizing the customer experience using inputs directly from the customer feedback.

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across multiple touchpoints, using multiple devices at any time and from anywhere. So understandably, 83% of organizations are seeing the value in leveraging mobile optimization techniques.

“Our top priority is to make our entire site mobile-optimized. We recognize that there are multiple outlets to purchase what we sell, so if we’re not providing what they want experientially, they’ll leave.”

– Head of marketing for a fashion retailer

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targeting as the process of serving tailored content to website visitors based on their characteristics, behavior, and interaction history. Marketers see value in both rules-based targeting (81%) and algorithm-rules-based targeting (78%) to improve the digital customer experience.

“We’re applying behavioral targeting with regard to serving new versus existing visitors. While we know little about our new visitors, we are able to create and tailor a welcoming visitor experience [using attributes from an IP address]. This enhancement led to a 17% lift in purchase conversion for new visitors.”

- A digital marketing director for an eCommerce fashion retailer

FIGURE 6

Tangible Data Is Used In Understanding Continuous Optimization Strategies

Base: Digital marketing and eCommerce decision-makers at organizations with more than 500 employees

Source: A commissioned study conducted by Forrester Consulting on behalf of Qubit, January 2015

Organizations Gain Significant Value

From Continuous Optimization

Forrester asked survey respondents to assess how well-integrated their digital customer experience is. Analyzing the results, Forrester was able to segment respondents into two categories:

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supports a unified view of the customer and optimize for omnichannel customer engagement.

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the customer and partially optimize for omnichannel customer engagement.

So what have those organizations that are further along the maturity spectrum done to reach this state? The linchpin is a robust data architecture that stitches together the disparate data sources and facilitates an agile and dynamic

environment that allows for real-time analytics, insights, and action, with action being the true differentiator. Continuous optimization requires organizations to ingest large volumes of both structured and emerging data, tied together from various inputs, and inform both automated and human optimization methods, all in real time. While this is a tall order, organizations with mature customer experience are seeing immediate and sustained impact in working toward this ideal state.

The survey revealed that more organizations with mature customer experience are seeing significant benefits from a well-executed continuous optimization strategy (see Figure 7):

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customers to a brand will always be a key objective for organizations. The first moments of engagement that a customer has at the beginning of the relationship are long-lasting and crucial. A well-executed continuous optimization strategy gives a brand a competitive

advantage at this crucial juncture by providing a relevant, rich experience to those customers. Eighty-four percent of the mature respondents expect to see benefits in

customer acquisition as a result of continuous optimization techniques.

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mature customer experience strategies expect to see revenue gains from employing a continuous optimization strategy. This can come in the form of customer loyalty

and retention and improved cross-sell and upsell opportunities.

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lifts in the most important KPIs. Over 60% of mature organizations expect to see improvements in ROI, ROMI and/or ROCE as a result of a sound continuous

optimization strategy.

“We plan to invest heavily in continuous optimization over the next year. Optimization efforts have led to the biggest ROI over the last few years, yielding 15% to 20% return”

– eCommerce director for major online shopping site

ORGANIZATIONS WITH MATURE CUSTOMER EXPERIENCE PRACTICES ARE ABLE TO DELIVER A PERSONALIZED EXPERIENCE

Customers demand the ability to bounce across the channel labyrinth at their leisure and expect a seamless, consistent experience. The ability to associate a channel engagement or interaction with a specific customer (versus an

aggregated level like segment) is paramount for

personalization. Whether they use a live chat session, a call FIGURE 7

Mature Organizations See Gains In Revenue, Customer Acquisition, And ROMI

Base: 150 digital marketing and eCommerce decision-makers at organizations with more than 500 employees

Source: A commissioned study conducted by Forrester Consulting on behalf of Qubit, January 2015

“What benefits have you seen or might you expect to see from a well-executed continuous optimization strategy

focused on improving customer engagement?”

Enhanced customer acquisition

84% 64%

Improved revenue _52% 81%

Increased loyalty and

retention 62%70%

Improved ROI, ROMI, ROCE 62% 46% Increased cross-channel integration 39% 54% Mature Somewhat mature

center exchange, or a click on a paid social advertisement, organizations must tie this behavior back to the customer.

Mature firms have a much greater ability to capture their customers’ movements as they engage across various channels, allowing for a more personalized experience (see Figure 8). Forty-one percent of organizations with mature customer experience strategies are able to apply a uniform segmentation schema across all touchpoints. Applying a uniform segmentation approach across all touchpoints fosters the seamless, consistent experience customers expect. Employing a uniform segmentation — one that ensures relevant and timely content is being served up consistently regardless of channel — is a key component of personalization.

MATURE ORGANIZATIONS ARE ABLE TO LINK CUSTOMER DATA ACROSS MULTIPLE CHANNELS AND TOUCHPOINTS

Since customers are engaging with brands via multiple channels and on multiple devices in a nonlinear manner, integrating the customer interactions to piece together their journey is a prerequisite for optimizing their experience. For example, it’s important to integrate (see Figure 9):

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connect customers as they move from the website to the mobile site at a much higher rate compared with

somewhat mature firms (81% versus 57%, respectively).

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greatest dispersion among the two cohorts. While

capturing and integrating social behavioral data remains a challenge based on privacy barriers, organizations with mature customer experience strategies are able to connect social data at a much higher rate. As customers move from the mobile site to social sites, 78% of mature firms are able to integrate these touchpoints, versus only 43% for somewhat mature firms.

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channel where the delta between both maturity categories is not significant. This is an intuitive finding, as most firms, irrespective of their position on the maturity spectrum, have invested in the ability to join the email marketing efforts with the website and mobile site practices. FIGURE 8

Integrated Firms Can Apply A Uniform Segmentation Across All Touchpoints

Base: 150 digital marketing and eCommerce decision-makers at organizations with more than 500 employees

Source: A commissioned study conducted by Forrester Consulting on behalf of Qubit, January 2015

FIGURE 9

Firms Further Along The Maturity Spectrum Can Easily Link Customer Data Between Many Channels And Touchpoints

Base: 150 digital marketing and eCommerce decision-makers at organizations with more than 500 employees Source: A commissioned study conducted by Forrester Consulting on behalf of Qubit, January 2015

“How easy is it for you to integrate customer data between each of the following touchpoints?”

(Respondents who selected 5 = very integrated and 4 = integrated)

Mature Somewhat mature

Websites -> mobile site 81%

57%

Websites -> mobile app _52% 76%

Websites -> email 84%

70%

Websites -> social 81%

54%

Mobile site-> website _57% 86%

Mobile site -> mobile app _65% 73%

Mobile site -> email _61% 76%

Mobile site -> social _43% 78%

Mobile app -> website _55% 70%

Mobile app -> mobile site _57% 78%

Mobile app -> email 57%_59%

Mobile app -> social _48% 78%

Email -> website _72%73%

Email -> mobile site _64%65%

Email -> mobile app _59% 68%

Email -> social _55% 68%

Social -> website _55% 68%

Social -> mobile site 70%

58%

Social -> mobile app _55% 70%

Social -> email 68%

Close The Gap By Building And

Continuously Assessing A Road

Map

Just as organizations continually optimize customer engagements, they should look to build a digital customer experience road map that continually adjusts to customers’ unique demands (see Figure 10). Enabling continuous optimization cannot be a discrete project; rather, it should be an ongoing analytics initiative guided by a strategic plan. Marketing leaders need to tailor their road map to their current level of maturity by:

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develop a vision for their digital customer experience strategy and understand how the technology stack,

ownership, metrics, and continuous optimization can support this vision.

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Once organizations have defined their strategic plan, they should assess each component of their strategy across the enterprise to get a sense of maturity and areas for improvement.

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and analytics projects that enhance their customer experience strategy strengths and address any gaps that were identified during the assessment.

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learn lessons to clarify and update their strategic plan and the road map.

FIGURE 10

Develop A Digital Customer Experience Road Map That Continually Assesses Maturity

Source: Forrester Research, Inc.

Plan: Build vision, road map, and

plans. Developing: Unite existing skills, tech, and data. Competence: Deploy new skills, tech, and data. Mastery: Integrate into enterprise systems.

Continually assess and benchmark progress. Score digital intelligence maturity:

Identify digital intelligence strengths and gaps. S tr a te g y R o a d m a p

Prioritize digital analytics projects.

Technology stack S tr a te g ic c o m p o n e n ts

Ownership and support structure

Metrics and KPIs to understand and drive engagement Approach to optimizing customer engagement Technology

Ownership Metrics and KPIs

Optimization A s s e s s m e n t

Modify strategy based on current-state

assessment. Assess current state of

Key Recommendations

The road to delivering continually optimized customer engagements is long and challenging. But the potential upsides that help to drive business KPIs and competitive advantage are worth it. To succeed, digital marketing and

eCommerce leaders must:

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affects and leverages all aspects of a digital analytics program. A successful strategy means leveraging the right technology; making the right investments in staff and partnerships; implementing the right metrics and KPIs that are relevant and actionable and building the right organizational culture that values data as a strategic asset.

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The biggest gains go to early adopters. The way to attaining a mature capability cannot be left to self-learning projects that take years to complete. Accelerate the adoption of continuous optimization by seeking strategic relationships with external partners such as enterprise services providers, agencies, and consultancies. Leverage their experience and skilled resources to demonstrate the value, build the strategy, and implement solutions, while you build your digital intelligence road map.

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change in the way analytics and optimization teams work together with business partners. Firms must use the opportunities provided by a new generation of user-friendly analytics and optimization tools to deliver appropriate self-service analytics and reporting capabilities directly into the hands of business users. To back up this

approach, digital marketing and eCommerce leaders should partner with the business to optimize the customer engagement touchpoints that drive business value.

Appendix A: Methodology

In this study, Forrester conducted an online survey of 150 retail and wholesale trade, travel and hospitality, and financial services and insurance organizations in the US, UK, France, and Germany to evaluate their current digital marketing strategies and how they are moving toward delivering on the essential components of continuous optimization. Forrester supplemented the online survey with five in-depth phone interviews with senior marketing decision-makers at eCommerce organizations. The study was completed in January 2015.

Appendix B: Demographics

Survey Demographics: Location And Department

Base: 150 digital marketing and eCommerce decision-makers at organizations with more than 500 employees Source: A commissioned study conducted by Forrester Consulting on behalf of Qubit, January 2015

FIGURE 12

Survey Demographics: Revenue And Position

Base: 150 digital marketing and eCommerce decision-makers at organizations with more than 500 employees Source: A commissioned study conducted by Forrester Consulting on behalf of Qubit, January 2015

“In which country do you work?”

France 17% Germany 17% UK 17% US 49%

“Which of the following departments do you work in?”

Advertising, marketing, or customer experience 61% eBusiness/ eCommerce 39%

“Using your best estimate, how much of your organization’s revenue is generated online?”

1% to 9% 3% 10% to 24% 12% 25% to 49% 35% 50% to 74% 37% 75% to 99% 7% 100% (all online) 6%

“Which of the following most closely describes your position?”

Most senior marketin g

decision-maker in the company

41%

Executive in marketing (e.g., VP, director, reporting to senior marketing decision-maker) 43% Manager of marketing reporting to an executive in marketing 16%