A new McKinsey survey on business strategy for a post-pandemic era reveals the quickening pace of digital acceleration. Top-decile, tech-endowed companies – defined as those with technology capabilities, talent, leadership and resources that are linked to better economic outcomes – have moved core business practices from monthly to weekly or daily cadences.
In “The dew digital edge: Rethinking strategy for the post-pandemic era”, top-decile performers report they are now on a weekly or better cadence for using multiple sources of customer data to assess unmet needs, and also for sharing test-and-learn findings across the organization. According to the survey, what was considered best-in-class speed for these and other business practices as recently as 2018 is now slower than average, indicating that dramatic digital acceleration has touched all parts of a business.
Brand new research that Redpoint conducted with Harris Poll validates that companies across all industry verticals are reimagining customer experience strategy to keep pace with digital-first customer journeys, and that those strategies – just as McKinsey probed – center around digital transformation efforts.
In the “Revisiting the Gaps in Customer Experience,” a follow-up to 2019 Redpoint-commissioned research, 99 percent of all marketers surveyed said the pandemic has changed their CX strategy. The top three change indicators were an increased emphasis on flexible delivery systems (cited by 63 percent), integration of online and offline channels (51 percent) and embracing new channels for customer interactions (51 percent).
We can infer from the findings that the pandemic served as a wake-up call for organizations to become data driven and organize technology and business processes around a modern architecture that prioritizes a single point of control over data.
In the Harris Poll, the top driver for marketers to digitally transform CX strategy was to personalize experiences to provide deep relevance and context that is “meaningful and valued by the individual customer” (cited by 41 percent as the No. 1 driver). Among the other top drivers were the need to deliver always-on, omnichannel experiences (33 percent) and moving beyond a basic understanding of customer preferences to anticipate customer needs (32 percent).
To accomplish these goals, it is not surprising that marketers said that data quality is the top area of increased investment (63 percent). A prioritization of data quality is recognition that to deliver omnichannel experiences and anticipate customer needs – particularly with a need to assess unmet needs at an accelerated pace – marketers must be able to trust that customer data is accurate, complete and in real time. According to the survey, the primary culprits for introducing mistrust are having an average of 16 customer engagement systems (up from nine in 2019) and a lack of data integration between those systems.
Start with Data Quality
Yet, as the McKinsey study reveals, top-decile companies are now sharing test-and-learn findings across the organization on much quicker timeframes. Shared findings suggests that these data-driven leaders have solved some of the common data quality challenges and now trust their data; they’re confident data quality is such that segmentation, campaign design and campaign execution are generating a higher rate of intended outcomes for whatever the business metric that customer data is intended to drive, whether higher revenue per visit, reduced churn, lower acquisition costs, etc.
As we’ve seen from the Harris Poll findings, organizations that struggle with data quality have yet to reach this enlightened state, as they are still trying to cope with unintegrated systems that breed mistrust in the entire cycle of campaign segmentation, design and execution. The number of systems makes it harder to provide a seamless CX (77 percent) or to effectively engage with customers (67 percent).
Better Data, Better Experiences, Increased Economic Outcomes
The way forward, as the McKinsey survey reveals, is with the modern architecture that offers a single point of control. In an analysis of how far ahead the top-decile technology-enabled companies are in front of competitors in various elements of technology endowment, the two biggest gaps were a 21-point differential between those who have moved key elements of technology to a modern marketing architecture, and a 20-point difference between those who have a common source of data that serves as the single source of truth across the organization.
Digging into why a modern architecture is, as the survey suggests, a primary factor in the ability of top-decile tech-endowed companies to drive better economic outcomes, we turn again to Harris Poll results, which show that 39 percent of consumers will not do business with a company that fails to offer a personalized experience. Turning this around, 82 percent of consumers – up 5 percent since 2019 – identify themselves as loyal to companies that demonstrate a thorough understanding of them as a unique customer.
Looking at both surveys through the lens of the accelerating pace of digital-first customer journeys, the drivers, challenges and solutions for providing a seamless, omnichannel customer experience are clear. An unmanageable network of fragmented systems is out, and a modern architecture offering a single point of control over data, decisions and interactions is in. Customers expect omnichannel experiences that are meaningful, and that show that a brand or organization knows the customer beyond a basic understanding. Improved economic outcome is as good an incentive as any for organizations to begin to make the effort to join the top decile and deliver a superior experience in line with the accelerating pace of business.