81% CEM Initiatives Have Failed, Says Study

by CXOtoday News Desk    May 07, 2014

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While businesses are seeing a strong correlation between customer experience management (CEM) and increased profit, over 80% organizations globally have seen their CEM initiatives fail in the last three years, says a new Avaya study. It notes that increasingly high expectations from customers are creating a business environment, something the majority of organizations are struggling to keep up.

While CEM programs are being undertaken on a global scale by businesses of all sizes, the Avaya survey found that China leads the pack with 84% of businesses having a CEM solution followed by the US at 73%, India (72%) and Brazil (63%).

CEM linked to profit

CEM activities are strongly tied to business success and growth trajectories. The study found a solid correlation between a strong CEM program and increased profits. Eighty-one percent of those who have seen a significant increase in profits have a CEM program in place, compared to those who have seen profits remain static (46%) or suffered a decrease in profits (35%).

Companies see the biggest improvements in customer satisfaction, loyalty, retention and repeat purchasing, which the survey finds is largely attributed to the fact that 88% of customers would rather spend their money with companies that make it easy for them to buy.

Where is the gap?

Despite 95% of business managers saying CEM will be important to their organization this year, only 59% of those surveyed have a comprehensive plan in place. Even with a plan in place, there is no guarantee a CEM approach will garner results, considering 83% of companies can only deliver some elements of a personalized customer experience automatically and in real time. In addition, a staggering, 81% of organizations have seen their CEM initiatives fail in the last three years.

Moreover, 43% of CEOs and business decision makers think the top reason for CEM failure is project misalignment with customer preferences, indicating communication barriers within organizations themselves. Another possible explanation is that companies do not typically associate functions like finance, R&D, IT and operations as dealing with customers. This could be a blind spot in the way they approach and plan CEM initiatives given that people across all departments within the company have direct or indirect contact with customers and prospects and not just the roles typically seen as customer facing.

Johnson Varkey, Director, Contact Center Sales, India and SAARC, Avaya “A majority of businesses acknowledge the need for a comprehensive CEM program, but somehow fail to deliver on what it takes to implement one. For example, the gap in India is quite wide as 80 % of customers expect to be treated as unique whereas only 49% of companies deliver on this aspect.

Today’s multichannel way of working with customers requires strong support from enabling technology. Of companies without a CEM program, 31% blame its absence on a lack of appropriate technology in place - a figure that rises to 35% of multichannel companies.

“Breaking down functional silos, tapping the expertise of internal and external resources and investing in technologies that bring customers and employees closer together will help put companies on the path to success,” said Varkey.