Why is customer experience so important?
Take Domino’s Pizza, which has been an early adopter of customer experience development. Domino’s recognized the benefit in delivering a seamless, enjoyable, and hassle-free experience no matter how and where their customers engaged with the brand. By providing personalized tools for the customer to order and track their dinner delivery in real time across all devices and channels, Domino’s has grown its digital operations to account for more than 60% of all orders, with almost two-thirds on mobile devices. This consumer-driven focus has also fueled 11 consecutive quarters of double-digit sales growth for the company. And its competitors are playing catchup.
The degree to which companies take the long view and commit to customer experience investment can and will determine their survival. It is for this reason that the Leapfrog Marketing Institute has deepened its research to explore customer experience development and planning in our past two studies.
In last year’s “CMO Digital Benchmark Study,” we learned that customer experience for marketers is not only complex, but is also still in the early stages of development. Said another way—the talk is not being walked. Specifically, close to 60% of marketers stated that the primary goal of the customer experience was to build better business outcomes—defined as lifting conversion, adding new customers, and increasing sales. But fewer than 20% of respondents stated that marketers owned the customer experience at their companies and almost 30% reported that the customer experience was not explicitly assigned to anyone.
In our third annual “Planning Report,” released earlier this month, our goal was to uncover how marketers are building their strategic and financial plans to make their brands more customer-centric, especially related to development of the customer experience. Our findings are surprising, though consistent, with the insights from last year’s study. Respondents this year include marketing and C-level executives from 119 companies—both B2C and B2B enterprises.
Given the active discussion and growing focus on customer experience, we expected a majority of respondents to have a dedicated budget for customer experience. The reality is only 38% of respondents have a dedicated customer experience budget. When the 38% with a customer experience budget were asked about year-over-year budget changes, the positive news is that 60% reported a budget increase, 20% had no change in budget, and only 7% had a decrease in their customer experience budget. In addition, nearly 10% now have their first customer experience budget, so while adoption is slower than expected, the trend seems to be positive.
For those companies with a dedicated customer experience budget, just over 50% stated that marketing is the largest owner of the customer experience budget, with a dedicated customer experience group next at 24%. In addition, 15% of respondents stated that customer experience budgets were shared or not explicitly assigned. These results seem to clarify the findings of last year’s study: Marketing typically takes the lead and ownership when companies create an explicit budget for customer experience.
But marketers now have the opportunity, and arguably the responsibility, to own the customer experience and budget—both the data/insights and the delivery in order to deepen the connection between the customer and the brand. Companies will not be able to survive for long without doing this. Devices, channels, and customer expectations are changing too fast for ownership to be decentralized. However, with fewer than 40% reporting dedicated budgets and unclear ownership and influence, the time is now for less talk and more action.