The Cambridge Dictionary defines an “inflection point” as “a time of sudden, noticeable, or important change in an industry, company or market.”
2023 does feel like an “inflection point” kind of year. Market conditions are difficult. COVID is still around and even the tech industry does not seem to be immune to these headwinds.
The customer experience industry is also facing a tough year. So what customer experience challenges do we need to deal with in 2023? Are there specific issues we will have to face in CX? Is 2023 going to be the year where we look back and say to ourselves “that’s when it all changed?”
Let’s look at the customer experience challenges we face in 2023.
But first, some key takeaways.
- CEO’s should be involved more in “big picture” CX
- They can do this by getting involved in qualitative research on what an organization’s customer & employee experience should be
- Customer satisfaction has declined in the U.S. But it’s strong in APAC
- APAC invested a lot in CX, more than other territories
- 50% of APAC brands felt that the biggest obstacle holding back their efforts were digital skills and capabilities. But it’s not only an APAC problem, many firms worldwide still operate at a low level of CX maturity
- Part of the solution is to make CX teams smaller and more agile
- Decentralize CX and integrate it with customer-facing and marketing business functions
- These smaller teams can place more emphasis on storytelling, with help from marketing
- Working with long-term CX partners also helps reduce talent gap
- Linking CX innovation to customer retention is a good way to help CX teams start proving ROI
Customer Experience Challenges – Should CEOs be “Chief Experience Officers”?
CEO, as most people know, stands for “Chief Enterprise Officer”. But should it? Is that emphasis correct in today’s integrated digital world?
The prime function of a CEO is to see the big picture. CEO’s need to make big strategic decisions based on the information given to them by the rest of their business.
But if they are not connected to customer experience, can CEO’s make those decisions? Or, more accurately, can they make the best decisions? Most CEOs make their strategic decisions based on numbers or metrics. Or KPIs or OKRs…However if a CEO is not connected to the experience of their customers, they are missing a crucial data point.
It may help CEOs to think more about the types of experiences customers have when interacting with their organization. Employee experience is also a huge factor in this. Especially with regards to talent acquisition. But there are few CEOs involved with either employee or customer experience. So while a title change may be too radical, a change in emphasis might be the solution to this disconnect.
A CEO’s time is limited. So no one would advocate that a CEO should be poring over wire frames. But they should be more involved in the big picture around customer experience. A solution could be that a CEO is more involved in qualitative research around what a customer experience should be. Providing leadership to a steering group whose sole purpose is to consider these big questions. This would give the CEO access to more data points that would help them make better strategic decisions.
Customer Experience Challenges – A Lot Of Customers Are Not Happy. Is CX Broken?
Customer experience is an “inflection point”. At least in territories like the U.S.A., U.K, Europe and Japan.
Customers tend to be less patient, sometimes less civil and they do not forgive subpar experiences.
The U.S. overall customer satisfaction index is at its lowest point in 17 years, as of Q3 2022. Many organizations in the territories like the U.S. have blamed this decline on the pandemic. When the truth is lack of investment and innovation are more likely to be the cause. This is borne out by customer satisfaction scores in other territories.
APAC in particular has shown strong customer satisfaction scores. According to the XM Institute, Vietnamese consumers were most satisfied with a 90% satisfaction rate. India has an 89% satisfaction score and Thailand is not far behind on 87% satisfaction.
By contrast although the U.S. has a 79% satisfaction rate according to XM Institute, it is also dropping year-on-year. Germany is down by 1.5%.
So, why is there such a difference?
Why Is CX In APAC Different To Everywhere Else?
The answer is, in part, money. APAC businesses invested a huge amount into CX in response to the pandemic.
In APAC, the pandemic brought a huge surge of new digital customers. Online behavior shifted fast. According to Adobe’s 2022 APAC In Focus report, 77% of surveyed practitioners experienced a surge of new customers. 76% saw new and changing customer journeys.
Meeting this huge surge in demand and users required investment. Which APAC businesses expect to embark upon. 59% of surveyed APAC respondents in Adobe’s report are stepping up investment in customer experience management. Ahead of both North America (57%) and Europe (53%).
Although North America, Europe and the U.K. are considered “more mature markets”, the pandemic fast tracked CX in APAC. There is investment and willingness to innovate in APAC that is not quite there in the same way (at least right now) in other territories.
But spending alone will not help APAC companies, there is another huge challenge to overcome. And that challenge, which is a worldwide phenomenon, is the talent war.
Customer Experience Challenges – The Talent War + A CX Skills Shortage = Trouble
Skills shortage is a particular problem for APAC businesses. In Adobe’s 2022 APAC in focus survey, 50% of APAC brands felt that the biggest obstacle holding back their efforts were digital skills and capabilities. This extended through to gathering customer data. Only an average of 18% of respondents admitted to customer insights across new customer journeys, pain points and purchase drivers.
These two issues overlap, but they are not only APAC problems. In fact there is a CX skill shortage almost everywhere.
According to Forrester’s 2022 “State of customer experience teams” report, many firms worldwide still operate at a low level of CX maturity. There are key skills shortages in storytelling, design thinking and data literacy. The Forrester report suggests that this low maturity restricts most CX teams to simple “find and fix” work.
This is another clue as to why customer satisfaction scores in more “mature” markets are falling. Businesses are, on the whole, serving better experiences. But they are only working on quick fixes, rather than really innovating on the experiences they actually offer.
Forrester’s analysis says that 25% of below-average brands will improve. But 50% of above-average brands will either decline or stay the same.
There are different solutions to these problems, both in APAC and worldwide. One is to make CX teams smaller and more agile.
Smaller More Agile Teams?
Decentralizing CX can help to achieve this. Then, the next step is integrating CX with customer-facing and marketing business functions. These smaller teams can place more emphasis on storytelling. Plus, with help from senior leadership, they can act as entrepreneurial incubators. Splitting a big CX team into lots of small teams helps spread customer obsession through the business. Which speeds up innovation.
Brands also have to pursue experiences that will make them unique. Rather than box-ticking exercises that make them look like every other brand out there. Small teams with storytelling skills will achieve that differentiation.
In the APAC region, and beyond, companies can beat the skills shortage. They could work with long-term CX (technical and storytelling) partners.
At MAQE we have been helping companies improve their commerce experiences for a decade. We are data-driven, and we have insights into the different regulatory environments in APAC that can make CX innovation quite challenging.
But 2023’s market conditions also bring another challenge for CX teams. Proving ROI (return on investment).
Customer Experience Challenges – CX Has To Be Able Prove Itself To Survive
With market conditions set to be tough (but this will vary by region), every business unit or team has to prove return-on-investment. Customer Experience is no different.
This is bad for some CX teams. 54% of them even told Forrester that they could not prove the ROI of their projects.
While C-suite must be more plugged into customer experience efforts, CX teams also should be better able to feedback results to C-suite. This helps leadership to see the value of CX and then invest in it. There is proof that investment into CX helps companies thrive in even tough markets. So CX teams can help the wider organization, if they can measure their efforts.
In APAC this will also be a concern, but viewed through a different perspective. With the large investments into CX during the pandemic paying off, there will be pressure to justify further investment in CX innovation. CX teams in APAC need to help C-suite understand that further innovation is needed to stand-out in a competitive market. Linking CX innovation to customer retention is a good way to tie CX efforts to a wider company metric.
Talk to MAQE
Do you need a customer experience partner to weather the storms of 2023? Talk to MAQE. We are experience experts who have been creating omnichannel experiences for a decade. We conduct qualitative research to help you find unmet needs. Then we create solutions to solve them. We can help your brand tell better stories so it stands out from the rest. Get in touch via firstname.lastname@example.org.