Trends in the Customer Experience Management Market
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- Justina Lawrence
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1 Trends in the Customer Experience Management Market Organisations Wanting to be Truly Customer-centric Must Actively Manage the Customer Journey July 2015
2 Contents Introduction... 4 Customer Experience Management: A Powerful Concept... 4 End-user Organisations: Only Concerned with Unique Benefits... 5 CXM Solution Vendors: Five Clusters and Counting... 6 Frost & Sullivan s View: Active Management of the Customer Experience... 7 Hot CXM Trends in Unification and Single View... 8 Context is King... 9 Culture and Employee Engagement Qualitative and Practical Insight Real-time Insight Intelligence and Optimisation Testing and Spontaneous Innovation Globalisation Cloud, the Customer Experience Wraparound How Organisations make CXM Decisions Front-ended CXM Focus Areas Strategic Role: Growing Shareholder Value CXM: The Modern Solution Paradigm The Last Word Advice to Vendors Advice to End-user Organisations Featured Vendor Profiles Medallia Company Background CXM Coverage (Solution Paradigm) Product Overview Strategy/Value Proposition
3 SDL Company Background CXM Coverage (Solution Paradigm) Product Overview Strategy/Value Proposition Sitecore Company Background CXM Coverage (Solution Paradigm) Product Overview Strategy/Value Proposition Legal Disclaimer The Frost & Sullivan Story
4 Introduction Customer Experience Management (CXM) is a concept that has been misused a great deal in recent years, causing confusion in the marketplace. Fundamentally dissimilar solutions are branded as CXM, making it difficult for end-user organisations to gain an overview of the market without analysing each solution in detail. Market participants have even been unable to agree on a single abbreviation to represent the concept. When it emerged about years ago, Customer Experience Management was commonly abbreviated CEM. That abbreviation is still in use, although CXM is gaining ground alongside CX, which simply stands for customer experience. There is no real difference between CXM and CEM, but using different abbreviations is clearly not helpful to end users who are struggling to understand the concept and to promote its benefits in their organisations. This Market Insight is relevant to end-user organisations that want to adopt a CXM solution, and to solution vendors that want to engage with them. Frost & Sullivan aims to clarify the real benefits provided by CXM solutions, to illustrate the latest trends in CXM, and to offer advice to end users and vendors on how to procure and promote CXM solutions. Customer Experience Management: A Powerful Concept CXM has been championed by the analyst community, but it is an ill-defined concept amongst end users. Research conducted by Frost & Sullivan suggests that fewer than % of organisations employ a corporate definition of CXM, and even organisations that publicly recognise the customer experience as a central corporate strategy element fail to define what CXM means in practice. Even the most educated market stakeholders have different takes on CXM, and it is constantly evolving as they firm up their opinions. Increasingly, marketing professionals refer to customer experience as the customer journey, because they stop considering customer interaction as an isolated event but rather as a complex cycle of interrelated events that may begin months before a customer makes a buying decision. 4
5 End-user Organisations: Only Concerned with Unique Benefits Most C-level budget holders have a no-nonsense approach to IT solutions, caring very little about what the solution is called and what its specifications are, and caring very much about the benefits that the solution can generate. Vendors have done a good job of explaining the benefits of their solutions in functional terms, and they have excelled at placing their CXM solutions in the context of organisation transformation and process re-engineering. What they have often failed to do, however, is spell out their unique benefits in relation to their customers customers and quantify those benefits. This has hampered their ability to gain traction with many budget owners. Non-C-level business buyers and influencers respond well to the functional benefits highlighted by vendors. Influencers are well attuned to CXM being a catch-all, and they routinely use the concept to describe a host of desired outcomes: Operational effectiveness: Modelling and analysis, without speaking to the customer, to more effectively improve the experience and target customers, making processes more efficient. Business benefits: The process of turning customer relationships and experience into business benefits. All touch points and interactions: Managing the customer experience across all touch points and interactions. Segmentation: Differentiating customers and targeting them with better services and products, and a better experience that surprises and delights. Pure customer focus: Doing the right thing to the right customer at the right time. The importance of the brand: The customer s experience encompasses the performance of products and services and impression created by employees. Providing an experience tailored to individual needs that matches the brand ambition. Value creation and destruction: A comprehensive picture of where value is created and destroyed. Measurements across customer touch points, reflected in financial, process, and satisfaction key performance indicators. 5
6 CXM Solution Vendors: Five Clusters and Counting CXM solution vendors are just as unable as end users to agree on a single definition of CXM. Vendors claiming to offer CXM solutions cluster into at least 5 groups, depending on the breadth of the solution and the degree to which it requires organisation-wide integration. Perhaps not surprisingly, vendor CXM definitions are heavily influenced by their heritage, varying greatly among vendor clusters. Vendors effectively shoehorn CXM definitions into existing comfort zones a practice that is confusing to end users and does very little to promote innovation and maintain alignment with rapidly evolving end-user demands. Exhibit 1 illustrates how the key concepts used to define CXM differ between the 5 clusters of CXM solution vendors. Abbreviations are defined in the text that follows. Exhibit 1: CXM Market: The 5 Clusters of CXM Solution Vendors, Key Concepts Source: Frost & Sullivan The vendor section of this study includes an overview of the main vendors marketing CXM solutions and an explanation of how Frost & Sullivan assigns them to 1 of the 5 clusters. CXM, as a concept for IT solutions, was invented by the cluster of traditional operational support system and business support system (OSS/BSS) vendors. Addressing telecom operators, these vendors focus on the holistic view of the production networks, convergence, consistency, and real-time characteristics. 6
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