As the B2C digital customer experience has improved, do B2B customers expect more?
We explore the technology investments B2B companies are making and their executives’ opinions on effectiveness.
Read on to see the data along with budgeting tips to help you budget for customer experience (and conversion success).
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As you make your budget plans for 2020, you may be heavily focused on media buys. There’s an election coming up along with the Summer Olympics, a recipe for more expensive media costs. Or maybe you’re not a big media buyer but are wrestling with having to buy keywords that are getting more expensive.
Effective and efficient media buying is an important budget consideration, absolutely.
But what then?. Once that media has done its job to capture interest and attention, will the customer’s experience with your company convince them to buy? Or will it drive them away (and with it, the ROI on all that media you just bought)?
Customers lost due to poor customer experience
Has your company ever lost a customer due to the quality of your commerce experience?
“In our report, we define digital customer experience as the set of interactions customers have with the businesses they purchase from across all digital touchpoints. These interactions across channels come together to create an overall sentiment about how effectively a brand connects with and services its customers,” said John Bruno, VP of Product Management at Elastic Path.
About half of companies had lost customers, with the C-suite feeling the loss more acutely than managers → 54% of C-level executives said their company had lost a customer due to the quality of the commerce experience.
That is admittedly a low bar — losing just one customer. But keep in mind, this isn’t behavioral data. This is the opinion of the company’s leaders. So in other words, about half of company leaders either have data to show or simply think it’s likely the experience is not living up to customer expectations.
This is significant, especially when you realize that we often consider our companies' experiences to be better than they are since we are more familiar with them than the customer is. You’ve probably spent hours on your site, while your customer may only give it a few moments of their attention.
So where is the downfall? Is it in budget size? Elastic Path asked:
Budget investment in customer experience
How strongly do you agree or disagree with the following statement? “I believe my company’s leadership is investing enough money and resources into improving our digital customer experience.”
It’s easy to blame budget size for problems, but in this case, company leaders aren’t doing that. For example, the group that needs to get the budget from the C-suite to create a strong customer experience (directors) doesn’t see a budget challenge. According to the survey, 59% of directors agree, and 36% strongly agree with the statement: “I believe my company’s leadership is investing enough money and resources into improving our digital customer experience.”
So perhaps the challenge is how the money is being spent?
Customer experience technology investments
Technologies implemented to improve the digital commerce experience for customers
When the survey asked which technologies were being implemented by companies to improve customer experience, no one technology dominated. Even the most popular technologies were used by only a little more than half of companies.
The most popular technology was “personalized buying experiences,” used by 58% of companies. Personalization can help improve customer experience and conversion, but it is a broad term, and you should understand what is really involved in that personalization. Some personalization is whiz-bangery that simply adds a company’s name to the website but doesn’t really help a customer. If you implement personalization, make sure you test the effect it has had on customer conversions.
The second most popular technology — digitized content management — is a quite basic tool designed to simply get the product information in front of customers.
How to budget for customer experience (and conversion success)
Now that you’ve got a sense of how companies are investing, the bigger question is how should you budget to improve customer experience (and ultimately conversion success)?
I won’t make the case for any specific piece of software or technique, but rather, let’s look at some big-picture takeaways for improving your budgeting acumen.
Budget Tip #1: Understand the impact of customer experience improvements on conversion and the overall ROI
The customer experience is more than one point in time, or one individual interaction. Take a look at the entire customer journey when budgeting and measure the impact at improvements in each step of that flow. You will likely discover a knock-on effect for your overall ROI (return on investment).
For example, if you work for an ecommerce company and improve the customer experience in your shopping cart which ultimately increases sales, it doesn’t only produce a better shopping cart but increases ROI for the ad spend five steps upstream in the customer journey.
Flint McGlaughlin, CEO and Managing Director, MECLABS Institute (parent organization of MarketingSherpa), recently shared a case study of a company that created a holistic testing strategy that involved the entire conversion funnel from the ad to the form page. The optimized path produced more than four times the monthly profit (a 302% increase).
You can view the case study below, or watch the full session at Reprioritize Your Marketing Spend and Transform Your Results: Learn a radical new framework.
Budget Tip #2: Future-proof your investments
Ferris Bueller said, “Life moves pretty fast. If you don't stop and look around once in a while, you could miss it.”
He could be talking about MarTech as well.
The typical budget cycle poses a problem for many marketers. The technology cycle doesn’t move in a comfortable linear fashion through a fiscal year from January to January (or October to October).
Marketers have constant deadlines and numbers to hit this quarter, this week, this afternoon. So it can be difficult to keep up. Make sure you dedicate some of your budget (and time) to analyze how emerging marketing technology trends can affect your business.
“Businesses need to make smarter investments because the cost of replatforming over and over again to keep up with evolving buyer expectations will drain your coffers. B2B brands leave money on the table when old investments don’t provide the flexibility to adapt to new touchpoints and experiences. Business leaders need to do their due diligence to ensure their businesses are set up to adapt to and make the most of future innovations. Otherwise, they may miss out on revenue or continue to throw money at past investments that can’t keep up with their needs,” Bruno said.
This isn’t a challenge only for marketers. The modernizing effort to transition U.S. nuclear weapons off a system using eight-inch floppy disks was just completed in June. That makes me feel better as a marketer. (It makes me a little more concerned as a citizen of the world, but it makes me feel better as a marketer).
Budget Tip #3: Invest in more than technology
When I used to work in the software industry, I would joke that some sales pitches basically equate to “software is magic!”
You have a problem. You buy the software. Abracadabra. Problem solved.
For your software investments to succeed, you need the right infrastructure, processes and org chart in place to support it. Have you accounted for that in your budget?
For example, some technology is extremely powerful but so complex that it needs a dedicated (or at least partially focused but well-trained) administrator. Have you accounted for that in your total cost of ownership of the product?
For customer experience, it gets even more complex. Software alone will often not be enough to improve customer experience. You need the right people and processes in place to identify the challenges, determine the right solutions, implement those solutions, measure the effectiveness, learn, and repeat.
John Steinert, Chief Marketing Officer, TechTarget, provides a nice analogy, “I suspect that many companies aren’t structured in a way that allows for effective management of customer experience. For me, there might be useful parallels to examine in the way the evolution of the American auto industry evolved in the ‘70s and beyond. If we look at the approach to quality management among US manufacturers as compared to the methods adopted by Japanese companies, the differences in approach and outcomes were striking. If we compare ecommerce companies that are revolutionizing our CX (customer experience) expectations compared to those who struggle, I suspect we will see remarkable differences in organizational and process design. As much as they invest in tech, companies likely need to be investing in radical organizational and process design.”
Budget Tip #4: What you budget dictates who you serve
Justin Barlow, Marketing Director, Nigel Wright Group, shared his organization’s marketing budget split:
Website lead generation
Online advertising/brand building
Literature and Equipment
Events and seminars
One glance at the budget and you can see there is a heavy focus on acquisition, with the biggest allocation going to online advertising/brand building (35%) followed by website lead generation (20%) and events and seminars (also 20%).
An acquisition-focused budget makes sense for a company like Nigel Wright Group because it is a specialist recruitment agency.
But some companies (especially companies with a CX goal) may want to focus on customer retention first.
“Without constraints and setting aside product build or buy costs, my recommendation is to build budgets based on what is required to retain customers first. I’m well aware that this is almost the reverse of a lot of startup advice, but I’m not talking about how to get a company going, I’m thinking about how to build it right. Examine retention from two angles: The cost of serving customers through continuous renewal and the cost of protecting customers in the face of rapid competitive advance.
“On top of that, build in the cost of new customer acquisition very holistically [including] necessary rates of penetration. Thus, GTM (go-to-market) strategy, awareness and consideration need to grow faster than competition, and [it should] protect share, pricing, etc.,” Steinert advised.
How To Defend Your Marketing Budget, Part I: 5 Preparatory Tactics (classic advice from the MarketingSherpa archives)
How To Defend Your Marketing Budget, Part II: Meeting Tips + Challenging Scenarios (classic advice from the MarketingSherpa archives)
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