2020 and 2021 transformed the global landscape of digital experiences beyond recognition. It has been an incredible journey with every industry fueled by the insatiable need to create better and more user-centric experiences for their customers.
We've already seen the first ripples of this powerful wave change numerous spheres of life, with significant effects on customers' intentions and behavior. This gave rise to the need for pioneering solutions that meet the demands of ever-evolving customer journeys and incorporate new solutions across all technologies.
In other words, the standards and the stakes for the CX world in 2022 and on are high. The good news is that, since the groundwork has been laid, the variables for success can be identified, quantified and worked on to achieve greater customer engagement.
These movements and new trends inspire us to ask our expert friends about what they see from their industries and their point of view around the CX world and the marketing ecosystem for 2022. Our goal with this article is to help you determine how well your company is positioned for growth in 2022. So, let's explore together the five key variables that we think will shape the CX and Martech landscape this year.
For this report, we interviewed Jay Proulx, Head of CXM at TMG; David Shao, Director of Marketing Technology at ServiceNow, and Julio Cavalcante, Consulting Services Sales Account Manager at Adobe.
Also, we will be sourcing stats and insights from the 2022 Digital Trends Experience Index, a result of the partnership between Adobe and eConsultancy, aimed at making sense out of a wealth of data acquired by polling almost 10.000 industry experts. Their collaboration makes the report "the largest and most durable study of how digital trends are changing the marketing discipline".
By combining such highly-qualified sources, we hope to summarize the most critical CX trends for 2022.
1. Omnichannel experiences.
Customer expectations have shifted, markets have become more complex and external pressures are accelerating, with the pandemic as a turning point for many businesses.
Although it was a period of hectic changes for everyone, it taught us how willing customers were to embrace digital transformation. The shift in buyer and customer behavior over the last year and a half was clear. In fact, according to Jay Proulx, the Head of CXM at TMG:
“Customers were ready to adopt all of the latest innovations demanded by the pandemic; we’ve seen businesses win or lose based on their ability to adapt, showing just how ready consumers are for modernized, personalized, and convenient experiences. When customers begin to normalize these experiences, they expect them of all brands, innovations quickly become standard operating procedures, and the entire market needs to follow suit.”
Moreover, Julio Cavalcante, Consulting Services Sales Account Manager at Adobe, stated:
"The realities of the pandemic shifted towards mostly online interactions. Over time, this had a significant effect on consumer habits and behaviors. The behavior of buyers has been changing for a few years, but in the last year and a half, the bubble burst and completely changed the way of buying, many people who were extremely hesitant to buy online started their first purchases, and other customers [already] used to this model have migrated 100% to the online model, forgetting how to go to a physical store."
As this digital transformation set in and customers became used to fluidly switching between channels of interaction, "the need for omnichannel personalization, automation, and scalability took on greater urgency," as stated in the 2022 Digital Trends Experience Index:
"Customers expect organizations to allow them to shift seamlessly from one interaction mode to another, remember their preferences across all touchpoints and create excellent experiences at every step of their journey".
Consider the end-to-end experience of your customer.
When discussing marketing and CX strategies, most efforts are focused on digital channels. However, a key point that is usually left out is the physical experience. To provide truly omnichannel experiences, every set of experiences must be unified.
“We have enormous opportunities to unify digital experiences with in-store/on-site and call center data. Most CX investments are digital, but relevant and timely personalization require understanding all online and offline experiences”. Jay Proulx, Head of CXM at TMG.
In fact, most companies still struggle to connect their digital and physical worlds, putting up barriers that make it difficult for customers to move between channels, creating a disjointed experience. Moreover, according to the aforementioned 2022 Digital Trends Experience Index:
"To meet customers wherever (and whenever) they need, businesses need to reconfigure to collect hybrid interaction data. Then connect the journey dots and create compelling, value-added experiences at each key stage in the path to purchase."
Companies must think of the entire customer experience with an eye towards both digital and traditional channels to create a seamless end-to-end customer journey. By using this focus, they can prepare for growth and be more prepared for unexpected outcomes.
What are the limiting factors for omnichannel adoption?
When asked about his view on the current CX world and the Martech ecosystem, Proulx considers that a lot of companies still don’t fully comprehend the potential of this particular model. The need to bridge functional silos across sales, marketing, product, IT, finance, and support is becoming more pressing every day but very rewarding when achieved. He says:
“There’s a fundamental lack of understanding of the business benefits of omnichannel, personalized customer experiences. Still, we have well-established outcomes showing 1.4x revenue growth, 1.7x customer retention rates, and 1.6x customer lifetime value.”
The experts are clear: this is the direction customers are moving towards, and as a result, companies should shift to provide for them. However, a lack of understanding of the business benefits of the omnichannel model can be a barrier for adoption, and that can be one of the major challenges of 2022 for some companies.
2. Personalized experiences.
Contextual, relevant, and helpful personalization that elevates the customer experience is imperative in 2022. As such, it has become not only a key factor but a defining service that differentiates industry leaders from their competition. In this regard, Jay Proulx assured that:
"Customers want to feel like brands understand them, are equally invested in the relationship, and are ready to personalize based on their recent interactions. When those expectations aren’t met, consumers will quickly look for new brands that will meet them."
But to deliver this, companies will need a foundation that includes an integrated data architecture and insights-driven approach.
"Businesses need technology that provides an excellent digital architecture, advanced analytics, centralized content, digital asset management, and fully integrated and automated cross-channel campaign management tools. They also must foster a culture that champions data-driven decision-making and agile marketing operations supported by agile workflow software solutions". - 2022 Digital Trends Experience Index.
From a competitive perspective, organizations that do not invest in connected technology may find themselves falling behind or simply being less relevant.
3. Real-time data.
One of the keys to providing this sought-after personalized experience is the third point on the list: gathering, analyzing, and applying real-time data to improve the customer’s experience. According to Jay:
“My main challenge is to help organizations align to the value proposition of customer experience management, consolidate vision across pillars, and create engaging brand experiences. The latest tactical value stream is to make the most of customer data and create a real-time, actionable single view of a customer and the ability to personalize each step of their journey.”
In this regard, the way in which companies are gathering their customers’ information has also shifted, with a significant push toward first-party data-gathering instead of relying on third-party solutions. Proulx considers that “there needs to be an extensive investment in switching to first-party data” and unified customer profiles to enable the necessary support for “data scientists and predictive analytics, AI, and ML".
However, even when the means and tools are in place, collecting data and analyzing it to extract insights are two different processes that require specific processes. This means that the ability to collect data is there, but companies are still facing challenges to turn the data into actionable insights. According to the report, organizations "need to think about how that data will translate into insights and actions that create real customer value."
Moreover, Cavalcante expressed similar thoughts about the efficient use of data:
“Many companies are already prepared to understand their consumers through the data already collected, but there are some that try to surf this wave, but without the necessary knowledge and believe that they should collect any and all data because maybe it will be necessary for the future. What is missing in these companies is to first understand what data is really needed in this first stage. The hardest thing is to make people understand that they do not know what they think they know.”
However, this collection of data, efficient or not, does raise some ethical considerations. With the debate for consumer data privacy heating up in 2021, the concern for the ethical use of private data is very present. According to the 2021 Deloitte Digital Consumer Trends Survey, 66% of global consumers are concerned about how the companies they interact with online use their personal data, although there was considerable variation between countries.
As businesses continue to collect more kinds of customer data and customize services based upon it, customers will expect transparency and clarity around how their data is being used. The challenge for marketers will be effectively communicating the value exchange between customers and brands while also respecting each person's unique needs around privacy.
4. Embracing agile methodologies.
One important challenge in a post-lockdown landscape is that while the digital age has brought new innovations, new products, and new ways of working, it’s also challenged the traditional notions of organizational structure, management, and decision-making.
As stated by Proulx, companies quickly turned to agile methodologies in 2020 and 2021, characterized by minimized bureaucracy and quick decision-making. Every team member contributes towards a single goal in a much more flexible fashion than traditional models would allow:
"I was particularly surprised by how quickly organizations can pivot when they need to. It shows that they’re capable of continuing to do it without the pressure of a pandemic. What’s not surprising is that consumers were more than eager to adopt innovations and conveniences and will expect to keep those conveniences as the new normal."
Fintech and Martech startups are in a good position to take advantage of this shift in methodology. According to Proulx, they are providing innovative capabilities that rival or exceed the capabilities of established vendors, precisely because they are in a better position to quickly evolve based on customer trends. In fact, Cavalcante considers that they are the ones that have understood the need to use the various profiles and tools needed to reach the demands of the modern customer. He says that:
"The companies that have really woken up to this new era are the ones that will be successful in the future."
The report’s data shows, however, that "many companies are struggling with implementing the necessary cultural and operational changes to stay nimble and respond to rapidly evolving market dynamics." To embrace a more flexible model, organizations need stronger data access, improved training, and robust workflow management solutions.
Another problem that remains is how to integrate agile methodologies into everyday operations instead of relegating them to critical situations. In summary, the key factors for setting up successful agile methodologies are the following:
- Talent development: As the demand for new skills has increased, cross-functional marketing teams with a variety of skills have become the foundation of the agile methodology model. A combination of AI use and skill development will be key for experience-driven organizations.
- Diversity of ideas: A diverse team brings a diversity of perspectives and ideas to face the challenges ahead. The global management and consultancy group, BCG, found that having above-average diversity in senior leadership teams leads to significant increases in reported innovation revenue. Incorporating more female, foreign, and externally-hired leaders from different career paths, even in small increments, leads to improved results.
- Fast, responsive insight actions: Turning data into insight actions fast enough to keep up with changing customer needs and preferences. This suggests that not enough organizations are taking advantage of AI to action insights and deliver valuable customer experiences quickly enough. As stated before, a talented team with the right tools at their disposal can help harness this missed opportunity.
Overall, the report suggests that talent development, diversity of ideas, and responsive insight actions will be key factors for setting up successful teams in the current landscape.
5. Directing company resources towards CX.
As customer expectations rise, nurturing relationships with them has become more important. Leading marketing organizations, as identified in the report, place customer relationships at the heart of their operations, reorienting all of their efforts around customers. Proulx says that:
"Organizations need to rally around Customer Journeys and Service Blueprints to understand points of friction and attrition and use data-driven analysis to prioritize and invest in solutions that improve outcomes.”
Optimizing the data-gathering processes and then enabling the systems that make this data quickly accessible for real-time decision-making will be two of the key factors for more personalized experiences. Cavalcante agrees with this orientation towards putting the user experience first and foremost. For him, one of the main challenges of 2022 is the continuous reinvention and improvement of the CX models:
“Companies have started to understand that they need to be much more user experience-oriented than product-oriented. The mindset is changing; more and more companies are understanding that products should be designed according to the user experience and no longer design a product believing that it is what the user needs.”
Based on his experience, there's a growing trend in which startups and fintech companies have an essential leading role:
"Startups and Fintechs have helped a lot with this change, because "traditional" marketing understood that it needs to go further, with profiles and tools, to really reach the level needed today. Technology advances in leaps and bounds, and we cannot believe that only technology would advance and the traditional model would remain intact."
Proulx, on the other hand, emphasized the need for effective data collection if companies want to shift towards CX as the main goal: “Organizations need to rally around Customer Journeys and Service Blueprints to understand points of friction and attrition and use data-driven analysis to prioritize and invest in solutions that improve outcomes," he explained.
It shouldn’t be a surprise then that senior executives and marketing leaders consider “data and insights” their top priority for 2022. But the constant growth and shifting priorities of the marketing ecosystems are putting marketers under tremendous pressure to keep up not only with the technology but the methods to help clients realize the solutions they present will help them achieve their goals.
In a market surrounded by such a wide variety of solutions for every problem, the organizations that are most prepared to successfully attract customers will be the ones who take the time to understand their needs and then use their expertise to provide the perfect solution.
According to David Shao, Director of Marketing Technology at ServiceNow, in 2022, there will be a rise in the use of the Challenger marketing model, perhaps best known for the use of the "Rational Drowning" strategy.
Rational Drowning uses data to prove that a proposed solution is the best solution for the customer's problem. It is the best solution for them because it has been the best solution for other customers in the same position. It has a proven track record. In this way, marketers elevate the quality of the experience by empowering customers with the data to understand their problems and their solutions. In this regard, David Shao says:
"As the ecosystem grows, marketing teams get overwhelmed with many different solutions, adding complexity to operations and expenses to the marketing budget. The truth is that marketers are not looking for new products. Instead, we need robust solutions to our problems."
Shao also considers that data will be vital for the correct implementation of this model:
"Rational Drowning will intensify how marketing and CX teams see our problems. Every player in the market will bring their A-game using data and insights to understand the market challenges better. As a result, we will see a lot of competition for the same marketing dollars, new solutions in the Martech space, and the classic ones will renew their offering."
However, he clarifies that one often overlooked "competitor" that the CX world should consider more is the development of in-house marketing solutions: "Every day, we have access to more information, APIs, beacons, and different ways to build personalized solutions for our companies," he concluded.
It is clear to the experts that concentrating resources around the best possible CX for the customers will be one of the key priorities of 2022. But achieving this CX-driven state will take the full collaboration of all departments. Especially crucial will be the alliance between CIOs and CMOs. The relationship that has emerged between them needs to continue to solidify. As customer behaviors and preferences evolve, CMOs and CIOs need to work more closely to keep up with crucial customer shifts and needs.
In short, companies need to build processes, systems, and cultures around evolving customer needs and how to provide them with solutions.
The circumstances of 2020 and 2021 truly changed the marketing and Martech landscape as well as the CX world for years to come.
The way digital consumers have shifted their focus over time has led to several fundamental changes in how companies do business. However, the reorientation of processes, operation, culture, and ability to address its customers’ needs is still a major key to success by “creating the conditions for speed, experimentation, innovation, and personalization at scale,” stated in the report.
By anticipating and responding to the evolving customer’s expectations and market dynamics, companies can align their resources to become more customer-centric and agile while also enabling them to compete at a higher level of innovation than ever before.
The ability of companies to thrive in an environment led by the listed factors will determine which ones will be preferred by the customers and which ones will have to make significant organizational adjustments to keep competing in a market that will continue to shift in the coming years rapidly.