Customer experience (CX) and customer journeys are no longer the abstract marketing concepts they were only a few years ago. Gartner recently found that in 2010, only 36% of companies competed on mostly CX. By 2016, that percentage grew to 89%. The trend is set to continue – Gartner predicts that by 2018, over 50% of organizations will implement significant business model changes to try and improve CX, including customer journey orchestration.
These new-world marketing practices allow brands to form and sustain relationships with customers by moving beyond single touchpoint personalization to a cross-channel omni-channel journey. And, they’re working — companies are investing in CX because of its impressive ROI potential. According to IBM’s 2017 CX Index, omni-channel shopper spend is between 50% and 300% more than single-channel shoppers. By providing a consistent experience across channels, brands can increase ROI, reduce churn and increase lifetime value in the long-term. Gone are the days of competing on price alone. Brands now must use CX as a competitive advantage to differentiate themselves and deliver marketing value.
The benefits of an engaging customer experience are increasingly clear. As a result, interest in using customer journeys to shape CX is growing across a variety of markets. These firms are starting deliver unified messaging on all channels for a consistent customer journey. Certain industries are further along, while others are still getting their feet wet.
Which Sectors are Heading the Charge?
Our recent State of the Customer Journey 2017 report studied the customer journey space. We analyzed customer interaction data from over 2 billion journeys delivered on our Customer Journey Hub. 2014, 2015 and 2016 data was correlated for 6 leading industries: retail, automotive, travel, healthcare, education and insurance.
As the graph shows, the retail industry has the largest volume of customer journey interactions tracked by Kitewheel. Retail customer journey interactions grew by over 100% in 2016 alone.
Close behind is the insurance sector, which grew from 3% of total interactions tracked by Kitewheel in 2015 to 32%. Travel, healthcare, automotive and telecommunications are also growing, yet show a significantly smaller volume. Across these leading industries over the next few years, we’ll see a constant one-upping. Marketers must best their competitors’ CX and journey strategy if they want to stay in the game.
Let’s dig a bit deeper into why retail and insurance are diving headfirst into CX and customer journeys.
Retailers: Customer Journey’s Early Adopters
As the clear cross-industry leader in CX, major retailers dominate the customer journey space. The most savvy businesses are constantly innovating their digital, in-person and cross-channel experiences to provide seamless delivery for their customers. This drives more sales and Starbucks is a prime example. This brand took the time to reimagine real-time customer engagement regardless of interaction touchpoint. AdAge calls this innovation a necessity.
Retailers have invested in CX for several years. Since, this industry showed significant maturation in their use of CX. In particular, retailers dramatically reduced social media use in favor of channels like email, websites and targeted advertising. This diverse omni-channel mix is shown on the graphs below, and indicates that retailers are looking for ways to derive value from existing customer bases, rather than spending heavily on less attributable acquisition channels like social media listening. EConsultancy found that investing in mobile, email and social media together saw an average of over 30% more sales than companies that only focused on one or two of these channels.
Considering this industry’s development, retailers cannot build a competitive edge on just innovative products and low prices. CX is a necessity and retail marketers are using journeys to achieve it with strong results. Forrester found that leading companies invest in CX, which allows them to grow 14% faster than the laggards. This potential has and will continue to drive many retailers to take action in this space.
Insurance is Right Behind the First Movers
While many praise retail’s use of customer journeys, insurance is the industry to watch. Perhaps more than any other industry, insurers have a vested interest in gaining insights into customer needs and behaviors. Wizu explains that the increased regulation and commoditization of the insurance market, along with diminished customer loyalty and ease of switching, creates a major challenge for insurers. Typically, this industry is known for its undistinguished customer experience. In addition, most insurers know why a customer is contacting them (to process a claim, to ask a question, etc.). According to Call Miner, this market demands an exceptional and efficient CX to set vendors apart in a crowded market.
To do so, the more creative insurers turn to CX and customer journeys to deliver long-term competitive advantage. In particular, this industry is well positioned to take full advantage of journeys using emerging channels like the IoT. This tool can track behavior or health metrics to inform how they best serve their customers. IoT is the primary driver of the increase in journey interaction volume on our platform. If executed correctly, this exciting channel allows for clear differentiation.
Other Industries Grow Their Customer Journey Interaction Volumes
The travel industry also consistently focuses on delivering a strong CX utilizing the customer journey. Customers in this sector expect real-time updates and context-aware interactions. They demand high quality service every step of the way. According to Adobe, only 38% of travel brands said they’re committed to digital and physical CX integration. This is due to the complex nature of the purchase journey. The Drum found that modern customers browse on average 38 websites before making a purchase.
As Henrik Kjellberg, President of low-cost OTA Hotwire sums it up well.“The customer journey becomes ever more complex, with shopping and purchasing done over multiple devices. Learning how and when to capture the customer is becoming increasingly difficult”. Worse still, the majority of travelers have little brand loyalty and will switch offerings based on CX. This industry, along with healthcare, telecommunications and automotive, would be wise to look to trends in other industries, like retail and insurance, for best practices in CX adoption and execution.
More companies are testing the waters in this burgeoning space and beginning their first data-driven, cross-channel engagement projects. Over time, customer journey interaction volumes will continue to increase. Regardless of industry, CX is the most crucial element of a successful marketing program. Businesses must adapt accordingly.