Is there a blueprint for the successful application of data and AI when it comes to improving customer experience? Recent Microsoft Advertising research shows that there is a growing gap between the 20% of businesses that have successfully managed to achieve a high Customer Experience Quotient (CXQ) and the 80% that are in danger of getting left behind.
While some of the key factors holding businesses back include the inability to combine data, the failure to mitigate to the Cloud and a lack of clear objectives, there is also a growing backlash in relation to privacy issues which is expected to close the gap even more so in the near future. So how can businesses ensure they’re not left behind on customer experience? We take a look at the traits of the High Performers to identify the blueprint for marketing success.
The blueprint for success
Microsoft Advertising recently conducted a series of comprehensive interviews and an online survey of marketers and agencies across companies of all sizes and industry verticals. The study established a baseline to assess marketers’ customer-focus maturity with the aim of identifying a ‘blueprint’ for success. Specifically, we examined the top-performing marketers, referred to as ‘High Performers’, who are mastering two key aspects when creating a better customer experience. These are:
1. Understanding the buyer journey.
2. Improving marketing performance based on that understanding, as well as the marketers’ maturity in these two aspects, which we call ‘Customer Experience Quotient’ (CXQ).
Improving the Customer Experience Quotient
Simply put, the Customer Experience Quotient, or CXQ, is the combination of a marketer’s ability to understand the buyer journey and the result of their marketing performance based on that understanding. Considering that only 20% of our survey respondents qualified as High Performers, improving your CXQ is of vital importance. Here are the three main ways your business can achieve this:
Find the right talent
Prioritise your resources
- High Performers have appointed an officer to lead the effort. Agencies should make this their primary champion and stakeholder.
- 86% of High Performers have a lead designated to oversee efforts in order to understand and market to the CDJ. The remaining 14% plan to hire someone to lead their CDJ strategy within 12 months.
- Only 48% of Low Performers have this role in their company.
Apply data and tech
- High Performers are investing in the right resourcing. While they understand the importance of expanding in-house expertise and solutions, they also recognise that partnerships accelerate speed-to-market while reducing costs and risks.
- High Performers use agencies at nearly twice the rate of Low Performers to accelerate their CDJ marketing aptitude. High Performers are also adopters of emerging media.
- High Performers are more heavily investing in digital media, spending about $20 million more annually than Low Performers.
- A shared characteristic of High Performers is an emphasis on the collection, unification and analysis of first-party data. High Performers are also augmenting and closing gaps with third-party data, viewing it as essential.
- 95% of High Performers are giving significant first-party data access to their agencies to support data unification and extract more value out of the partnership.
- 78% of High Performers say that combining first- and third-party data is a top priority. By contrast, only 40% of Low Performers say that they are prioritising the combination of first- and third-party data.
The habits of High Performers
High Performers are also using cloud solutions to collect, manage and unify first-party data. This has provided them with significant benefits which include delivering a better understanding of consumer data, speeding time-to-market and boosting ROI. Our research has found that, by moving to the cloud and starting to track data, marketers’ have experienced huge benefits and have gained a better understanding of the CDJ. For example, High CXQ Performers see a +45% incremental lift in ROI/ROAS for a typical campaign. Other benefits of high-performance CXQ marketing include:
- More opportunities for customers to engage with brands.
- Campaigns that better speak to customer needs.
- Improved ad campaign impact.
- Improved shopping experiences.
- Better aligned purchasing processes to customer preferences.
- Offers aligned to customer personas.
- Personalised future customer decision journeys.
The importance of touchpoints
Increasing the number of customer touchpoints was also the top benefit cited by High CXQ Performers, describing a virtuous cycle where more touchpoints lead to more opportunities for engagement. For example, more interactions yield more data, and more data yields more robust models which, in turn, yield greater personalisation, engagement and ROI. In other words, understanding the journey and marketing to the journey are foundational to one another.
Unlocking the value of data
High Performers are also embracing intelligent technologies that enable them to map the customer journey, tailor and serve up dynamic ads, and deliver highly relevant recommendations and cross-selling opportunities. They are advanced in their ability to identify consumer intent and next best action, and they are able to apply these insights to drive higher conversion and ROI. The use of technology from artificial intelligence and machine learning is fundamental to customer-focused marketing success in this new era. These are the key technologies that High Performers leverage that can improve your CXQ:
Artificial intelligence (AI)
High Performers are more than three times as likely to use AI, with cognitive services such as natural language processing and visual recognition yielding the greatest improvement to customer engagement. Use AI to build more interactive experiences that engage with customers in
a natural and more human way.
Machine learning (ML)
Use Machine Learning to anticipate consumer behaviour and create smarter, more personalised advertising experiences. When Machine Learning was used, High Performers achieved 2.4 times greater sales in addition to other benefits, such as an improved ability to act on customer data and increased ROI.
Trust, privacy and data security
Since trust, privacy and data security are the top concerns for our Microsoft Advertising clients and often carry equal weight with performance when choosing a search provider, it’s no surprise these are also key concerns for High Performers. High Performers know that brand health hinges on the ability to protect consumer privacy and use data respectfully and transparently.
Marketing success with Microsoft Advertising
Is there a blueprint for marketing success? Microsoft Advertising research shows that it all comes down to increasing your Customer Experience Quotient by combining the right strategy, the right data and the right technologies. High CXQ Performers have a unified view of customers and their journeys, which often requires looking across multiple data sets and applications. By blending that integrated data with AI and machine learning, we can help you and your business to extract richer customer and market insights, improve effectiveness of customer acquisition and create more touchpoints through more personalised customer experiences.
To learn more about how we can partner with you to achieve your marketing objectives, visit our Contact page or reach out to your Microsoft Advertising Account Representative.