Tag: customer experience

The Rising Role of Customer Data Platforms in Data-driven Personalization | Blog

By bringing together disparate data to gain a single customer view, Customer Data Platforms (CDPs) are becoming increasingly important to help brands drive personalized marketing efforts while maintaining trust and privacy. Learn more about the benefits of Customer Data Platforms and why they matter in this blog.

With the explosion of data on consumers’ spending and online behavior available from a multitude of sources today, gleaning valuable insights from the massive amounts of information is a top priority for brands.

But unifying the various disconnected touch points clearly and comprehensively to make sense of all the data is one of the biggest challenges facing marketers.

Customer Data Platforms (CDPs) have emerged as an important software solution that can help businesses get closer to consumers and achieve their organizational goals. Let’s explore what is driving the rise of CDPs.

Shift to data-driven marketing

Third-party cookies stored within users’ browsers have historically been a key marketing technology to track visitor behavior activity, improve the user experience, and collect metadata.

But today’s new consumer priorities, data privacy laws, and evolving technologies are leading to the third-party cookie’s demise. Following Safari’s lead in 2016, the world’s three main browsers eliminated (or will eliminate) the use of third-party cookies.

In addition to the demise of third-party cookies, other developments are limiting the use of consumer data for marketers. On the mobile/tablet devices side, Apple’s iOS 14 now requires explicit consent for any mobile identification collection.

The General Data Protection Regulation (GDPR) in Europe and other similar regulations are impacting consumer data collection and processing. In addition, 71% of countries have data protection and privacy regulations and 9% have draft legislations, according to the United Nations Conference on Trade and Development (UNCTAD.)

These developments significantly impact the consumer targeting capabilities of advertisers who often depend on third-party data. The vast majority of advertisers use or have used retargeting and old-generation Data Management Platforms (DMPs) that rely heavily on segments fed by third-party data.

Along with targeting, measurement is also significantly hindered. With more stringent consent collection requirements, collecting the consumer identifications needed to track impressions, clicks, or views and reconstruct complete customer journeys is more difficult.

These changes represent a major shift in data-driven marketing – leading to greater reliance on first- and second-party data to meet the challenges of an increasingly privacy-focused world.

But the unfortunate reality is that most organizations simply aren’t ready to adapt to these trends.

In our report Emergence of CDPs: Charting the Path to Data-driven Personalization, we estimate that even though 90% of businesses agree that data-driven marketing is the future, only 20% consider themselves highly mature enterprises, citing the high cost of data acquisition, limited automation, and data fragmentation as some of the top challenges.

How can enterprises prepare?

With this imminent shift from third-party to first- and second-party data, the changing regulatory environment, and evolving customer expectations for omnichannel and hyper-personalized experiences, enterprises are actively investigating new ways of collecting and activating customer data to drive personalization while fostering customer trust.

This is where CDPs become increasingly important and act as a central repository for the marketing stack.

A CDP allows enterprises to capture and store user data to link with all the users’ interactions, including Customer Relationship Management (CRM) and eCommerce platforms, social media, websites, and apps. Having data from multiple different systems improves the likelihood of identifying an individual. See the customer data platform framework below:

Customer data platform framework

Screenshot 2022 11 10 093829

 

By gaining a single customer view, brands can better understand customer requirements and up-to-date communications preferences, personalize individual brand experiences based on past behavior, and create personalized recommendations for customer segments. All of this can be achieved using unique, relevant, and accurate information that a person has willingly shared with the brand.

CDPs do not replace existing data systems. Instead, their role is to enhance current tools’ capabilities, mitigate risk from the third-party cookie demise, and power marketing teams with near real-time best-in-class audience selection. CDPs bring together existing customer data, anonymous floating attributes, and digital behavior across channels, devices, and tools.

Customer data platform landscape

Adoption is on the rise with, CDPs being viewed by enterprises as one of the most viable, future-proof solutions for managing the overwhelmingly disparate data streams that today’s brands gather and generate about their consumers and prospects.

Enterprises have many choices in this rapidly expanding market, including:

  • Large enterprises like Adobe, Oracle, and Salesforce that are investing hundreds of millions of dollars in the space and offer CDP as part of a greater MarTech (marketing technology) package
  • Pure play CDP players like Celebrus, mParticle, and Treasure Data that are purpose-built to support and address CDP use cases first that don’t need to be integrated into a larger system

Along with the growth in new entrants, the CDP space has seen a flurry of merger and acquisition activity in recent years of players that have showcased their unique data, campaign, analytics, and delivery capabilities, as illustrated below to see merger and acquisition activity in the customer data platform landscape.

Merger and acquisition activity in the customer data platform landscape

Screenshot 2022 11 10 094205

The road ahead for customer data platforms

As the data management landscape continues to rapidly evolve, CDPs will play an important role in the marketing tech stack and enable marketers to achieve true 1:1 personalization.

For enterprises to reach the desired business outcomes and mitigate risks in their personalization journeys, they should follow a comprehensive roadmap with the following four steps for data-driven 1:1 personalization:

Roadmap for data-driven 1:1 personalization

Screenshot 2022 11 10 094416

 

For more, see our report, Emergence of CDPs: Charting the Path to Data-driven Personalization, or view our webinar, Hyper-personalization Using Customer Data Platforms (CDPs). To discuss Customer Data Platforms further, please reach out to Sandeep P at [email protected].

Discover  how CX leaders can meet the expectations of their digitally enabled customers in our webinar, How are Leading Organizations Delivering Exceptional Customer Experience?

How Can Your Data Analytics Improve Your Customer Experience? | LinkedIn Live

LINKEDiN LIVE

How Can Your Data Analytics Improve Your Customer Experience?

View the event on LinkedIn, which was delivered live on July 14, 2022.

The pandemic unequivocally altered customer habits across all industries, drastically increasing online transactions and communication. Forward-looking businesses found opportunities in this shift to create sustainable, long-term customer experience (CX) strategies, leaning in to digital transformation so customers could self-drive transactions online with real-time responses. 

This boost in CX strategy has also increased access to customer data and analytics, providing an enhanced view of customers’ behaviors and actions throughout all touchpoints of the purchase journey, improving overall CX and delivery operations. 

Join this LinkedIn Live session as our experts explore the evolution of CX and how data and analytics are helping businesses understand their customers at higher levels than ever before.

What questions will the event answer for the participants?

  • How has CX evolved in the past few years?
  •  What does the current CX market look like?
  • How are leading organizations using analytics to improve the CX they deliver?

Meet the Presenters

Rickard David
Vice President
Everest Group
Lee Monstari
Lee Mostari
Director of Insights & Analytics
Davies Consulting

Two Success Factors For Platforms To Improve Customer And Employee Experience | Blog

As I previously blogged, back in pre-COVID-19 pandemic times, companies experimented with changing to digital operating models and building digital platforms to drive competitive advantages in managing operations, especially in improving the customer experience and employee experience. As economies began coming out of the pandemic shutdown, it became clear that companies that had progressed further in the platform world fared much better during the pandemic; and many used their platforms to gain disproportionate market share. That picture is even more dramatic in 2022.

Read more in my blog on Forbes

CXM Market’s Dream Run – What’s Driving It and Will It Last? | Blog

During a global pandemic with a dire economic outlook, one surprising segment experienced its fastest growth in recent years – Customer Experience Management (CXM) services. Driven by increased demand for digital and other factors, this market seems to have long enough legs to extend into the coming years. But what’s behind this unexpected growth in CXM in an otherwise subdued economy, and will it last? For more on our analysis of this promising area, read on.

COVID-19 impact

As most major economies were shut down partially or almost completely in the first half of the year to contain the spread of the COVID-19 pandemic, businesses across the globe were adversely impacted in 2020. And while some industries such as high-tech or Fast Growth Tech (FGT) fared comparatively better than others like travel and hospitality, overall, the economy looked grim.

With such a dire economic outlook, it was largely assumed that the same would hold for the Customer Experience Management (CXM) services market, given the segment’s dependence on overall economic health for its growth. Gauged by the slow first half of the year, the downcast business outlook, and the huge challenge facing CXM service providers to shift to a Work from Home (WFH) model to continue running their businesses, Everest Group projected the market would shrink by 4-5 percent in 2020 compared to 2019.

Market stunner

However, in a complete reversal of early trends, the CXM market managed to grow at one of the highest paces in recent years, recording 3-5 percent growth in 2020 to stand at around US$90 billion. And it doesn’t look like growth is coming to an end for this sector, as the numbers reported by some of the largest publicly-listed CXM service providers in 2021 look robust and point towards an optimistic future for this market.

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This begs the question: Why hasn’t the CXM market been impacted as severely as was widely expected during the early phase of the pandemic spread? We see several underlying factors that have been at work. In our upcoming CXM State of the Market Report slated for release later this year, these factors will be explored in greater depth. Below we discuss some of the factors that contributed to the segment’s growth and raise questions that need to be addressed further.

The following factors are playing a role in CXM services growth:

  1. Increasing demand for digital: It is no secret that businesses have come to terms with the importance of digital Customer Experience (CX) after the events of 2020. They understand the need for digital CX, not only to create superior customer experience but also to ensure continuity of services in adverse times when traditional methods no longer work. Additionally, customers are increasingly leveraging digital channels to communicate with brands, further fueling the pace of change. Enterprises are exhibiting a new wave of urgency to adopt digital technologies such as automation, analytics, self-service technologies, and digital channels to better prepare for the future and reduce dependence on a human workforce. This new demand is helping the digital segment of the CXM market to post an annual growth of over 40 percent
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  2. Exceptional performance by certain sectors of the market: While most traditional businesses were severely hit as businesses moved to an online model, those that were already strong in this space did well. Industries such as high-tech and FGT fared exceptionally, and their success also translated into more demand for CXM services from this industry
  3. Demand due to COVID-19 response: Even mature markets such as North America and Western Europe saw good growth in 2020 driven by demand for government support in these regions. The massive push to contain the spread of COVID-19 and to vaccinate the masses fueled demand for CXM services. Programs such as contact tracing and vaccination support are expected to drive new growth for CXM service providers. However, these demand drivers are expected to wind down once the pandemic is controlled and the vaccination programs cover a large portion of the population

 

Here are some of the issues we see that need further exploration:

  1. Is market consolidation hiding within the growth numbers? Given the challenges that 2020 posed around the changing business model, not everyone could thrive and survive in this market. The CXM services market has a very long tail with thousands, if not a magnitude more, of small service providers catering to enterprises globally. It is highly possible that a lot of these small (typically under 50 seats) providers were not prepared to handle the challenges thrown by the pandemic and saw their clients migrate to larger, more organized service providers. Given that a lot of these small players go untracked, a large part of this growth could well be just moving business from one player to another, which, in true essence, wouldn’t be actual growth. That said, it does not mean that the market did not see new growth at all. Based on our research, several providers have been successful in bringing new business to the table. While it may be difficult to determine full impact of the consolidation of smaller service providers on the overall market, our view is that the market is still experiencing net growth
  2. Is CXM growth being driven by new demand or a shift from in-house to outsourcing? With major economies globally under pressure, a lot of new demand for CXM services seems unlikely, barring, of course, certain sectors that were highlighted above.  A lot of the work that was previously being done internally through in-house centers could have moved to an outsourced model, given enterprises’ inability and inflexibility to adapt to new working models. Our research pegged the size of the total CXM services market (including in-house and outsourced) to be around US$350 billion at the end of 2019, with outsourcing accounting for ~25 percent of that spend. While a strong possibility exists that the overall CXM services spend declined in 2020 due to the challenging economic conditions, we believe the share of outsourcing is increasing, thus, resulting in net growth for the outsourced portion of the market

Positive outlook

Despite these factors, the long-term prospects for the CXM services market look favorable, especially with a heightened awareness around the need for superior CX to build differentiation in the market. This change will be hinged around digital CX, where most enterprises lack enough experience and require third-party support to execute the vision they have for their business. Along with green shoots of economic recovery emerging in several regions after a difficult year, service providers who possess CX capabilities have plenty of opportunities to look forward to.

Sharang Sharma, Practice Director: [email protected]

David Rickard, Vice President: [email protected]

Shirley Hung, Vice President: [email protected]

Sitel Group’s Acquisition of SYKES Makes a Big Statement – What Does It Mean for the CXM Industry? | Blog

With one of the largest acquisitions in the contact center outsourcing market in recent years, Sitel Group is poised to become a powerhouse with its acquisition of SYKES Enterprises, Inc. This union will likely set off greater investment in customer experience management services (CXM) and more industry consolidation. Read on to find out what this big deal will mean. 

Giant scope gets attention

The contact center outsourcing market is huge, about 90 billion dollars in annual revenues, and the industry is seeing more attention and growth than ever. So, the announcement of the agreement of Sitel Group acquiring all of SYKES’ outstanding shares in a transaction valued at approximately $2.2 billion is another in a growing list of investments in this space, albeit a large one.

Over the last two to three years, most acquisitions by large contact center providers have focused on bringing new capabilities and technologies to an existing footprint, whereas the Sitel Group / SYKES deal calls out gaining additional global presence as one of the main reasons for the acquisition. We have not seen something of this scale for a few years, probably not since the Concentrix acquisition of Convergys.

Ripple effects of the acquisition

This acquisition forms a $4 billion customer experience management services (CXM) organization with over 150,000 agents, making Sitel Group one of the three largest organizations in the industry alongside Teleperformance and Concentrix. In this blog, we’ll explore what this acquisition means for Sitel Group, its existing and potential customers, as well as the CXM industry as a whole.

Here are a few of the key impacts we expect:

  • The pace of change within Sitel Group: Existing customers of both companies should be mindful as to the speed and effectiveness of the integration and changes to the senior leadership team. Moving too quickly on an integration of this type can cause delivery capability issues, but moving too slowly can lead to service degradation as people are distracted by impending changes and, thereby, lose focus on immediate priorities. Potential clients will also want a clear view of available offerings, service delivery models, and innovation roadmaps
  • Sitel Group scaling up: Sitel Group’s acquisition of SYKES opens up a plethora of new delivery locations, including in Australia, EMEA, and Central America. However, we can expect to see a consolidation of sites and locations over time, especially where both have strong presences. The global footprint will also reduce as locations begin to provide service in the same languages. We also expect that Sitel Group’s considerable work on improving profitability in recent years will benefit SYKES’ business, whose current operating margins are on the lower side in the industry.

In terms of vertical expertise, Sitel Group and SYKES have complementary strengths, with Sitel Group bringing presence in the retail, insurance, and public sector spaces and SYKES bringing strength in the technology and healthcare industries.

  • Client volume drop: While Sitel Group and SYKES share complementary capabilities and mindsets, one natural overlap is that they have many of the same clients, making it probable that they will lose some client volume. Clients will not want to aggregate their contact center outsourcing into one place, they will naturally want to diversify
  • Delays in fully leveraging new capabilities: Many CXM service providers are developing digital CXM capabilities as the industry moves at pace away from traditional “people in seats” models and focuses on delivering better customer experiences through digital interactions to drive better business outcomes. SYKES has a strong focus on digital marketing and automation capabilities which benefits Sitel Group, which has leveraged partnerships in those areas

While Sitel Group’s acquisition of SYKES will bring additional and much-needed digital capabilities to the new combined business, a company the size of the new organization cannot deliver change and adjust to new offerings and skills overnight. It may take some time to fully deliver new digital capabilities at scale.

Increased investments in the contact center industry

As the contact center industry aims to better understand the customer and improve customer experience, we’re seeing many investments in the market.

Service providers across the board are investing in technologies and skillsets to become more digital and get ahead of the curve to offer better customer experiences. They are finding organizations more willing to spend money to improve customer service, an area where in the past, they treated simply as a cost base that needed to be reduced, but are now recognizing its potential strategic and topline business impact. Smaller service providers are taking advantage of their agility and are quickly adapting to a digital-first CXM business, and larger providers are having to work hard to keep pace with the rate of digital adoption.

Watch for more deals in the future

Expect to see more public and non-public deals happening. With the size of this market and everyone working towards digital transformation, a trend that has further accelerated due to vulnerabilities exposed by COVID-19, the contact center outsourcing industry is really ripe for investment.

These deals will result in a consolidation in the marketplace but with bigger market growth. Penetration of contact center outsourcing could increase from roughly 30 percent to upwards of 35 percent in the next few years – resulting in a faster rate of growth than we’ve seen in the past decade.

It will not only be due to big service providers getting even larger. Smaller service providers will need to rapidly articulate their differentiation to remain relevant in a crowded marketplace, such as in a process area or industry domain; otherwise, they run the risk of being in a race towards the bottom.

You can also attend our LinkedIn Live session, Who is Leading Customer Experience Management (CXM) Services in Europe?,  to learn the results of our recently completed PEAK Matrix® assessment showcasing our latest CXM research in the EMEA region.

Request a briefing with our experts to discuss the 2022 key issues presented in our 12 days of insights.

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