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Nov 9, 2022

2023 Will Be a Watershed Year for Customer Experience (CX)

We are approaching the end of the first full calendar year in which most people accept that consumer data belongs to the consumer rather than the property of the company that collects it. The “digital curtain” was finally lifted, as it were, spurred largely by Apple’s App Tracking Transparency privacy tool in its iOS 14.5 release and the announcement by Google that it would follow suit. Even with Google also announcing that it would extend support for third-party cookies on Chrome until 2024, the die has already been cast: In 2023, brands across every industry vertical with a customer-facing dynamic will give consumers more control over how their data is collected, stored and used.

The trend toward consumers having more control over first-party data will solidify for several reasons. First, brands will follow the tech giants and become more transparent, with opt-ins and explanations for how consumer data will be used. Second, because of the privacy changes, more consumers believe that their personal data belongs to them and that they – and they alone – can decide how it is used. Third, more brands will fundamentally grasp the concept of the data value exchange, in which consumers willingly provide additional first-party data when they trust that it’s in safe hands, i.e., that a brand will use it to enhance the customer experience, and not sell it to third parties or otherwise use it without a customer’s express permission.

With consumer control over data a central theme for 2023, we predict a few more dominoes will fall as far as putting the customer at the true center of a holistic, omnichannel experience. One-to-one marketing, for example, will become both necessary and simpler as an executable strategy. From an industry perspective, a renewed focus on first-party data and the value exchange will have retail companies and healthcare organizations re-think business models. And with the value of first-party data skyrocketing, we will see organizations finally giving data quality its due.

We will address each prediction in this space, starting with a little bit more about consumer control and the value exchange.

The Data Value Exchange

One thing to understand about Apple’s decision to provide an intuitive data sharing opt-in is that the decision wasn’t made in a vacuum. The writing has been on the wall that consumers have understood the value of their data for some time. Consider a Harris Poll survey from 2021 in which 66 percent of consumers surveyed said that they will give brands more information about themselves if the brand uses it to create a more valuable customer experience.

For the customer, that value is measured by consistent relevance across an omnichannel customer journey. A brand must recognize an individual customer across every channel and engagement touchpoint, demonstrated by the delivery of a frictionless experience. From the same survey, 82% of consumers surveyed said they are loyal to brands that demonstrate a thorough understanding of them as a unique customer, across all touchpoints.

A Segment-of-One Tipping Point

It stands to reason, then, that with an expectation for seamless omnichannel personalization, brands will further prioritize a one-to-one marketing strategy. Long held as an almost mythical ideal, one-to-one marketing in 2023 will cross the bridge between a concept and an executable strategy as it is now necessary to reinforce the capture of first-party data which is more valuable in return as data it is less accessible to competitors. Also, one-to-one marketing will become simpler to execute because consumers now explicitly see the value, and today’s technology enables it in ways that were impossible until now.

The transition will occur both because of its proven effectiveness with consumers, particularly with the millennial and Gen Z demographics, but also because technology has become far more sophisticated at segmentation. It is possible now to generate hundreds if not thousands of different segments, selections, offers and messages to package and send out that intelligently orchestrate a next-best action to a segment of one. Brands will realize that consumers simply no longer respond to age-based segments or other random data associations that are increasingly irrelevant to an individual customer journey.

With self-training machine learning models that dynamically segment audiences and find commonalities based only on what is true in the data, marketers are now able to generate millions of relevant, hyper-personalized interactions that truly reflect a market of one, vs. building an interaction model around a broad segment. In this way, the brand experience adapts to the customer – as the customer actively engages with the brand, inbound or outbound, on any channel.

An Outcome-Based Approach to Healthcare

From an industry perspective, the increased focus on a personalized experience centered around a customer will manifest itself in healthcare as a drive toward improving outcomes rather than simply delivering services. In 2023, there will be a tremendous acceleration of a value-based care model that is more aligned with the healthcare consumerism model. There will be an enhanced focus on improving outcomes, lowering costs and improving patient satisfaction, all at the same time by putting the customer at the center of a holistic healthcare experience.

To be successful with value-based care, healthcare organizations must have a deep understanding of a patient outside of a clinical setting. We must know all that is knowable about any one person and their situation, within the limits of privacy, to fully improve outcomes.  When roughly 80 percent of health outcomes are determined by a patient’s social determinants of health (access to a nutritious diet, economic stability, etc.), having a single patient view that recognizes those determinants is the key to orchestrating personalized experiences that drive improved outcomes.

Just as technology makes one-to-one marketing a reality, an enterprise customer data platform (CDP) capable of producing an accurate customer golden record using a healthcare organization’s own first-party data makes the single patient view a reality. For the entire healthcare ecosystem to adopt a consumer-centric model, data that is siloed across various systems of record must be integrated into a single view, giving marketers and business users a single point of operational control to improve engagement across the healthcare journey.

An Omnichannel Retail CX

In retail, 2023 will further separate the haves vs. the have-nots where the line of success will be drawn based on which brands will orchestrate a personalized, omnichannel experience centered around an individual customer. Based on the current hesitancy among brands to go “all in,” the expectation is that perhaps about 20 percent of brands will get the omnichannel strategy right. Those that do will have the same single point of operational control that will allow healthcare organizations to become consumer-centric. The difference, of course, being that the successful retail brands will instead be able to define and control experiences and customer journeys across the enterprise seamlessly and consistently – and in the customer’s cadence.

Take curbside pickup as an example. More brands are rolling it out because customers now expect the convenience, and they expect the seamless interaction between digital and physical channels. Many brands, though, stop at creating the experience. They may offer curbside pickup, but the totality of a customer’s actions and behaviors that led to the transaction are not aggregated into a customer golden record, and other opportunities to engage a customer with relevance at the time of the interaction may be missed. In a true omnichannel experience, a brand is poised to deliver a next-best action at any point in time.

Give Data Quality its Due

One final 2023 prediction relates to all that precede it, in that a value exchange, a one-to-one marketing strategy driven by dynamic audience segmentation and customer-centric omnichannel experiences all share data quality as an underlying requirement. Meaning that the organizations that succeed in differentiating based on CX in 2023 will be those that give data quality its due. Perfecting an organization’s own first-party data with advanced identity resolution processes, data cleansing and enhancement at the moment data is ingested from every source is vital to ensuring that organizations interact with the right customer, household or entity. Relevant, valuable interactions depend on the organization really understanding who the customer is, and that requires high quality data sets that are both accurate and timely.

In conclusion, 2023 will be a watershed year in the customer experience realm. Digital-first experiences now carry the day in every industry with a customer-facing dynamic, and consumers no longer tolerate it when brands discount the importance of blending physical and digital engagements into a singular, frictionless omnichannel experience across every touchpoint. In 2023 it will become crystal clear that time is running out for brands to transform CX or be left behind.

Steve Zisk 2022 Scaled

John Nash

Chief Marketing & Strategy Officer at Redpoint Global

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