Customer experience 2016 Roundup

March 2016

Thanks to digital media and commerce, the path to purchase most consumers take today is a winding one, which means digital has a role in all aspects of the customer experience. eMarketer has curated this Roundup of articles, insights and interviews to help you understand what shoppers are looking for, what their pain points are, and how marketers are reacting.

CUSTOMER EXPERIENCE ROUNDUP

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Customer Experience Roundup Copyright ©2016 eMarketer, Inc. All rights reserved. 2

CUSTOMER EXPERIENCE ROUNDUP

Overview

Thanks to digital media and commerce, the path to purchase most consumers take today is a winding one. It may start on mobile and shift to the desktop, start on the desktop and shift to brick-and-mortar stores—or make just about any conceivable combination of digital and traditional stops along the way.

And that leaves room for digital channels to affect the consumer experience in many ways.

Early on, for example, when shoppers are doing research, a lightning-fast mobile website with plenty of product information is important. But that’s also a pain point: Many retailers still don’t have mobile-optimized sites, and product information is not always accurate. According to August 2015 research from Shotfarm, that can be a major turnoff for digital shoppers.

Further down the purchase funnel, an easy checkout process—preferably with a seamless shopping cart experience across devices—is key. For shoppers who convert in stores, kiosks and other digital technology continue to play a role. And post-purchase, shoppers give feedback about their experiences or become loyal brand advocates across a variety of online and offline channels.

And marketers know it’s a priority to make these experiences good. According to US marketing managers surveyed in December 2015 by Black Ink ROI, having a customer-centric focus was their No. 1 priority for 2016.

But actually measuring how good the customer experience is may be tough: According to January 2016 polling by the CMO Council and Microsoft, just 10% of US marketers are able to measure the customer experience “extremely well”; another 24% said they could do so “moderately well.”

Data could help. Research from Forbes Insights and SAS found that most execs around the world say data analytics has a major positive impact on their customers’ experience. The same survey found the most essential sources of data for this purpose were customer databases

(70%), digital channels like websites and apps (58%), CRM systems (57%) and point-of-sale systems (57%).

% of respondents

Likelihood that US Digital Shoppers Would Buy from aBrand Again After an Experience with InaccurateProduct Information, Aug 2015

Verylikely

4%Likely10%

Slightly unlikely34%

Very unlikely53%

Note: ages 18+; numbers may not add up to 100% due to roundingSource: Shotfarm, "2015/2016 Shotfarm Product Information Report,"Oct 28, 2015200840 www.eMarketer.com

% of respondents

Effect of Data Analytics on Their Company's CustomerExperience According to Executives Worldwide, Oct 2015

Extremely positive impact on our customer experience54%

Pushed the needlein a positive direction32%

Shown potential in areas where it has been applied8%

Has not played a significant role yet5%

Note: numbers may not add up to 100% due to roundingSource: Forbes Insights, "Blazing the Trail from Data to Insight to Action:Executive Briefing" in partnership with SAS, Feb 2016205720 www.eMarketer.com


Are Retailers Providing a Consistent Omnichannel Experience?

An omnichannel strategy can boost sales

While more than half of US retail decision-makers fully believe retailers provide a consistent customer experience across all channels, just over a quarter of US shoppers feel the same way, according to December 2015 research.

The survey from TimeTrade also found that 44% of retail decision-makers somewhat believe that retailers provide a consistent customer experience across all channels, and 55% of shoppers agreed.

Additionally, 20% of shoppers said they believe there should be greater improvements in the way retailers provide a steady customer experience no matter the device. Only 5% of retail decision-makers felt the same way.

Having a consistent experience across all channels is important for retailers as they aim to drive sales. And, omnichannel strategies may benefit sales. According to LCP Consulting, retailers in the US and UK who have begun to implement plans to help their customers shop whenever, however they want. Overall, 68% of retail executives said an omnichannel strategy had boosted sales.

Retail decision-makers Shoppers

% of respondents

US Shoppers vs. Retail Decision-Makers Who Believethat Retailers Provide a Consistent CustomerExperience Across All Channels, Dec 2015

Note: numbers may not add up to 100% due to roundingSource: TimeTrade, "The State of Retail 2016," Jan 13, 2016

203945 www.eMarketer.com

Needs great improvement5%

Somewhat44%

Yes51%

Needs great improvement20%

Somewhat55%

Yes26%

% of respondents

Areas Where Implementing an Omnichannel StrategyHas Been Advantageous According to UK and USRetail Executives, 2013-2015

Sales57%

67%

68%

Customer service60%

60%

58%

Operating model59%

38%

49%

2013 2014 2015

Note: respondents chose their 3 main areas of advantageSource: LCP Consulting, "The Omni-Channel Journey," Nov 16, 2015202298 www.eMarketer.com


Negative Customer Experiences Affect Online Conversion Rates

Brand reputations are also at risk

A negative customer experience presents a number of consequences for companies. For UK and US digital commerce decision-makers, it can have an effect on their conversion rates, as well as damage their brand image, a May survey revealed.

Digital customer experience management software firm UserReplay surveyed UK and US decision-makers about the concerns they face, especially when it comes to understanding their customers. The largest share (43%) of UK and US ecommerce decision-makers said that a key consequence of a suboptimal digital customer experience was the effect it had on their digital conversion rates. Additionally, more than a third said that it could damage their reputation or brand image. Another 33% believed poor mobile user experience was a consequence.

Mobile certainly presents these decision-makers with a steep learning curve. The transition to mobile access is one of the primary barriers that UK and US ecommerce decision-makers face to better understanding the online customer experience. As the omnichannel shopping experience has expanded, and more shoppers than ever

browse, research and buy via mobile, decision-makers are left unsure about how they are actually interacting with digital retailers on mobile phones, and how to create the right omnichannel experience based on that.

Lack of tools and technology to quantify and prioritize digital customer issues is also a problem, according to a third of respondents.

In terms of ecommerce challenges, in particular, just 22% of UK and US ecommerce decision-makers don’t have trouble understanding why customers may struggle with their website, whereas the other 78% face a moderate to significant challenge. Furthermore, more than three-quarters of UK and US ecommerce decision-makers found that managing negative sentiment around their online experience—whether from social media or call central feedback—and the levels of shopping cart abandonment (before payment) were also a moderate to significant challenge.

% of respondents

Consequences of a Suboptimal Digital CustomerExperience According to UK/US EcommerceDecision-Makers, May 2015

Effect on our digital conversion rates43%

Damage to our reputation/brand image38%

Poor mobile user experience33%

Prevents customers from buying from us/using us in the future30%

Erodes our digital revenue potential28%

Causes internal con�ict/damages relationships betweendepartments

13%

None of the above8%

Don't know1%

Source: UserReplay, "The Online Customer Experience: Counting the Costof Not Knowing," Oct 21, 2015199374 www.eMarketer.com

% of respondents

Barriers to a Greater Understanding of the DigitalCustomer Experience According to UK/US EcommerceDecision-Makers, May 2015

Transition to mobile access and effect on usability and sales40%

Lack of tools/technology to quantify and prioritize digitalcustomer issues

33%

Lack of tools/technology to identify digital customer issues31%

Lack of skilled resources/analysts24%

Lack of tools/technology to reproduce (replay) digital customerissues

24%

Lack of processes/work�ow to respond to any digital customerissues that are identi�ed

23%

Budgetary constraints18%

Lack of internal collaboration/siloed mentality11%

None of the above/no barriers6%

Don't know2%

Source: UserReplay, "The Online Customer Experience: Counting the Costof Not Knowing," Oct 21, 2015199375 www.eMarketer.com


What In-Store Technologies Do Shoppers Find Useful?

Shoppers want to check out more easily

Retailers and shoppers are not exactly on the same page with regards to the utility of in-store technologies, according to data from PricewaterhouseCoopers (PwC).

US internet users ages 18 and older who were surveyed in August were clear about what would most enhance their in-store shopping experience: technology that helped them check out more easily. Nearly half of respondents chose this option.

By contrast, when PwC asked the same question of US retailers, only 28% said that enhancing ease of checkout would be an important use of in-store technology.

Retailers believed technology that helped shoppers check stock in other stores or online would be most useful, with 36% selecting it. That made it 6 percentage points more popular among retailers than among internet users.

Internet users, meanwhile, would rather have real-time personalized offers fed to them as they entered the store—which also came in at No. 2 among retailers.

% of respondents

In-Store Technologies/Features that Would Enhancethe Shopping Experience According to US InternetUsers, Aug 2015

Ease of checkout49%

Real-time, personalized offers as customers enter the store36%

Ability to check other store or online stock quickly30%

In-store Wi-Fi with fast, simple login25%

Digital displays that show products selected or available17%

Note: ages 18+Source: PricewaterhouseCoopers (PwC), "2015 Holiday Outlook: MillennialsMatter; Experience Is Essential," Oct 6, 2015198413 www.eMarketer.com

% of respondents

In-Store Technologies that Would Enhance theShopping Experience According to US Retailers, Aug 2015

Ability to check other store or online stock quickly36%

Real-time, personalized offers as customers enter the store29%

Digital displays that show products selected or available28%

Ease of checkout28%

In-store Wi-Fi with fast, simple login18%

Source: PricewaterhouseCoopers (PwC), "2015 Holiday Outlook: MillennialsMatter; Experience Is Essential," Oct 6, 2015198414 www.eMarketer.com


Retailers Check Out Social Data to Improve Customer Experience

Eight in 10 retail execs have or plan to integrate Facebook data into CRM

Social engagement with retail brands, particularly on Facebook, is high. According to recent research, retailers are looking to leverage such interactions to gather information and improve the customer experience.

Among retail executives in North America polled by Boston Retail Partners in April 2015, 31% had integrated their customer relationship management (CRM) system with Facebook, and an additional 49% intended to do so within two years. Nearly seven in 10 respondents had integrated Twitter and their CRM or planned to do so within two years, and similar percentages said the same about Pinterest and Instagram.

October 2014 research by Colloquy highlighted one area where social insights were being used. Among US retailers polled, 59% said they used social media data to improve the relevance of their marketing communications.

The integration of social and CRM could also help marketers leverage information to deal with angry customers who have had enough. Among Boston Retail Partners respondents, nearly three-quarters utilized social media to some extent when attempting to rebuild damaged customer relationships. Tailoring such efforts could reinstate a target’s once-positive view of a retailer and bring back that lost business.

Q1 2015 data from MarketLive suggested that retailers that can leverage social data to better interact with customers on such platforms stand to see the traffic—and dollars—roll in. According to the analysis, the share of US retail ecommerce traffic driven by social jumped nearly 200% between Q1 2014 and Q1 2015. At the same time, social platforms increased their proportion of ecommerce revenues by 72.0%.

% of respondents

Current and Planned Integration of CRM with SelectSocial Networks Among Retail Executives in NorthAmerica, April 2015

Facebook

Twitter

Pinterest

Instagram

31% 49%

26% 43%

21% 47%

17% 49%

6% 14%

6% 26%

9% 24%

6% 29%

Integrated Will integrate within 2 years

Will integrate in 3-5 years No plans to integrate

Note: numbers may not add up to 100% due to roundingSource: Boston Retail Partners, "2015 CRM/Unified Commerce Survey,"May 11, 2015189807 www.eMarketer.com


Customer Service Channels That Frustrate Consumers

Consumers will abandon a retailer because of poor customer service

Many consumers prefer traditional channels, like a phone, to communicate with a company. But according to November 2015 research, the phone can also be the most frustrating customer service channel.

Aspect surveyed more than 1,000 US internet users ages 18 to 65. All respondents had to have contacted customer service in the past 12 months.

Nearly a third of internet users polled said that voice or phone was the most frustrating customer service channel. In fact, it was more frustrating—more than double—compared to going to a company’s website for customer service.

Other customer service channels, such as live chat, email or social networks like Twitter, Facebook and Instagram, were also frustrating channels, according to internet users.

Customer service is important to retailers. A separate Aspect and Conversion Research survey found that more than half of US internet users have stopped doing business with a general retail company due to poor customer service.

Breaking it down by generation, the responses were similar across the board. For example, 54% of millennials said they stopped doing business because of poor customer service. Additionally, 50% of Gen Xers and 52% of baby boomers felt the same way.

% of respondents

Most Frustrating Customer Service ChannelAccording to US Internet Users, Nov 2015

Voice/phone 32%

Company website 15%

Live chat 13%

Email 12%

In-person 7%

Messaging app6%

Twitter 6%

Text/SMS 6%

Facebook5%

Yelp 3%

Instagram2%

Note: n=1,019 ages 18-65; numbers may not add up to 100% due toroundingSource: Aspect, "Aspect Fall 2015 Consumer Experience Survey," Feb 18,2016205759 www.eMarketer.com

% of respondents in each group

US Internet Users Who Have Stopped Doing Businesswith a Company due to Poor Customer Service, byIndustry and Generation, Oct 2015

Millennials Gen X Baby boomers Total

General retail 54% 50% 52% 52%

Telecom/cable 20% 26% 27% 23%

Travel 12% 11% 11% 12%

Financial/credit 11% 11% 10% 11%

Big-box electronics 11% 8% 9% 10%

Note: n=505 who have stopped doing business with a company due topoor customer serviceSource: Aspect, "Aspect Customer Experience Index: ConsumerExpectations for Customer Service During the Holidays" conducted byConversion Research, Nov 18, 2015202532 www.eMarketer.com


Most Shoppers Have Abandoned a Retailer Because of Poor Service

Consumers don’t like waiting on hold

More than half of consumers have stopped doing business with retail companies because of poor customer service, according to October 2015 research.

Aspect and Conversion Research revealed that 52% of US internet users have stopped doing business with a general retail company due to poor customer service. Breaking it down by generation, the responses were similar across the board. For example, 54% of millennials said they stopped doing business because of poor customer service. Additionally, 50% of Gen Xers and 52% of baby boomers felt the same way.

While more consumers stopped doing business with retail companies because of bad customer experiences, respondents have also stopped doing business with companies in other industries.

When it came to the telecom and cable industry, 23% said they had ended a relationship because of poor customer service. Additionally, 12% of internet users were no longer doing business with particular travel companies, and 11% were not doing business with financial and credit companies due to poor customer service.

Many aspects of customer service are frustrating for consumers. According to a September 2015 survey from Support.com, 24% of US internet users said having to repeat their information at each step of the customer support process was one of the most frustrating aspects of their experiences. When a customer representative is not fixing their issue or having to wait on hold were also top annoyances.

% of respondents in each group

US Internet Users Who Have Stopped Doing Businesswith a Company due to Poor Customer Service, byIndustry and Generation, Oct 2015

Millennials Gen X Baby boomers Total

General retail 54% 50% 52% 52%

Telecom/cable 20% 26% 27% 23%

Travel 12% 11% 11% 12%

Financial/credit 11% 11% 10% 11%

Big-box electronics 11% 8% 9% 10%

Note: n=505 who have stopped doing business with a company due topoor customer serviceSource: Aspect, "Aspect Customer Experience Index: ConsumerExpectations for Customer Service During the Holidays" conducted byConversion Research, Nov 18, 2015202532 www.eMarketer.com

% of respondents

Most Frustrating Aspect of Customer SupportExperiences According to US Internet Users*, Sep 2015

Having to repeat my information at each step24%

Waiting on hold19%

When a customer representative is not fixing my issue19%

Navigating the "phone tree"15%

Using my valuable time to fix an issue that I didn't intend to have13%

Being transferred to another customer representative to fix myissue

11%

Note: ages 18-60; numbers may not add up to 100% due to rounding; *whoconsider themselves very/somewhat connected to technology and want toknow about and use the latest technologiesSource: Support.com, "Connected Consumers and The Most PersonalBrand Experience," Nov 5, 2015200232 www.eMarketer.com


B2B Content Marketing Is Becoming More Customer-Centric

Ken Wincko

Senior Vice President, Marketing

PR Newswire

Content marketing has been around for some time, but the practice is becoming more sophisticated and effective as companies strive to build content more around their customers and less around products. Ken Wincko, senior vice president of marketing at PR Newswire, spoke with eMarketer’s Maria Minsker about developing content to serve customers’ exact needs.

eMarketer: What is PR Newswire’s content marketing strategy?

Ken Wincko: We serve marketing and communications professionals, and we try to dig in and understand the informational needs of our key clients and prospective buyers. We map all of our content to buyer journeys based on specific roles and consider different formats. We also engage these buyers in a channel-agnostic way, be it through our blog, on social media or somewhere in the mobile environment. We make sure that we provide content in the right place at the right time.

“Content marketing is now less about the brand and more about how the brand serves the needs of users in particular roles.”

eMarketer: What percentage of your budget is allocated for content marketing?

Wincko: It fluctuates, but we allocate around 10% to 15% of our budget towards content production. There’s also a significant portion allocated towards content distribution—roughly 40% to 45%.

eMarketer: What types of content do you focus on—blogs, white papers, case studies, videos?

Wincko: We do a lot of thought leadership, and that primarily involves ebooks and white papers. We also produce infographics and videos. As we go into 2016, we’re focusing more heavily on video.

eMarketer: What content dissemination tactics do you use?

Wincko: We are a PR company, so we do a lot of PR ourselves. We have a mobile-focused strategy—that’s a big area for us. People spend a lot of time on apps such as Facebook and LinkedIn, and we make sure to leverage those channels as best as we can by publishing content in those spaces.

eMarketer: How has content marketing evolved, and how does your approach reflect the changes?

Wincko: The biggest difference between content marketing now vs. five or 10 years ago is the digital disruption. The rise of social and mobile has given people ubiquitous access to information. Content marketing is now less about the brand and more about how the brand serves the needs of users in particular roles.

“If it’s done the right way, content marketing can be extremely scalable and efficient, especially if content can be utilized in different formats.”

Once we understand those needs, we can start crafting content. A critical piece of content marketing is the analytics—listening to the marketplace and pinpointing what topics are resonating now and what topics are likely to be critical going forward.

eMarketer: How are you measuring content success?

Wincko: First, we measure the elasticity—the conversion rate for every piece of content that is served up. Second, we look at velocity, or how quickly users accelerate along a


content path. Can we take it down from 60 to 40 days, for example. Finally, we look at the multichannel experience to determine which content contributed to pipeline and revenue.

eMarketer: Is content marketing as cost effective as other marketing tactics?

Wincko: If it’s done the right way, content marketing can be extremely scalable and efficient, especially if content can be utilized in different formats. If the framework is structured the right way, it can be efficient from an investment perspective.

That said, things are changing fast and the days of people reading 20-page white papers are gone. The great thing about the digital era, though, is that it’s very easy to edit [and repurpose] content.

Why CRM Data-Savvy Marketers Invest More in Customer Loyalty vs. Acquisition

Ric Elert (not pictured)

President

Conversant

Raju Malhotra (not pictured)

Senior Vice President, Products

Conversant

Ric Elert is the president of Conversant, which performs audience identification and messaging for the cross-device digital landscape. He and his colleague, Raju Malhotra, senior vice president of products, recently spoke with eMarketer’s Lauren Fisher about top trends to watch for in 2016, including marketers’ evolving use of CRM data.

eMarketer: What are some of the biggest digital display trends you’re thinking about for 2016?

Raju Malhotra: One thing we definitely see is a move away from a very format- and media-specific view, which is what display is, to a lot more consumer-centric or audience-centric practice. In that paradigm, you go after the right person regardless of which media or device or channel online and offline they are interacting with.

Ric Elert: The other part that I think gets mixed up is mobile app vs. everything else. It’s such a different world. All the things that are trends for display today—things like viewability and conversion tracking—they’re all tricky for display in-app, which is a different world from an identification standpoint. And the tracking across mobile app and web is very, very difficult to do.

eMarketer: Do you see the industry gaining ground on reconciling display across the web and in-app environments?

Malhotra: That’s what makes the cross-screen stuff so tough. Advertisers want to be anywhere where they are going to get consumers to look at their ads, and in-app is a great place because it’s pretty much 100% viewable, although your attention may be into your game [instead of] looking at ads.

But you need a robust identification platform to be able to track in-app against the conversions and do the attribution. And there’s not any attribution vendors that do a good job of it because they just don’t see the scale that’s necessary to do it.


We want to work with some of these vendors to help enhance that ability and give a fairer shake to the advertiser in terms of getting credit for the work they’re doing.

“You need a robust identification platform to be able to track in-app against the conversions and do the attribution. And there are not any attribution vendors that do a good job of it because they just don’t see the scale that’s necessary to do it.”

eMarketer: That is definitely an area where the industry seems to be crying out for improvement. A lot of the major attribution tools today are built with the cookie in mind. So bringing that in-app piece in is really tough, unless you’re someone like Facebook who has their own ecosystem.

Elert: Yes, and I would argue that even Facebook has some issues just because they’re in that walled garden. And when someone wants to jump out of that walled garden, there are issues there, too.

eMarketer: What about the relative importance of CRM data and its role in all of this? Obviously, clients are sharing it with you to power all of these things. I’m curious what trends might emerge related to marketers’ use of this data for cross-device targeting and other areas for 2016?

Elert: People are waking up to the power of that data to identify buyers. For the longest time, people have been using digital as an acquisition model to find new clients. And they’ve been having all this supposedly wonderful success finding new users. But then when you take that CRM data and bring it online and identify the people, they’ve been finding that they’ve been acquiring their customers over and over again instead of really acquiring new customers.

Marketers are also waking up to the fact that talking to existing customers that have already said yes to the brand is so much more powerful than spending a lot of money on acquisition. They’re realizing that they can get three and four times the yield talking to them and deepening their love of the brand vs. trying to talk new people into it.

“Marketers are also waking up to the fact that talking to existing customers that have already said yes to the brand is so much more powerful than spending a lot of money on acquisition.”

The third area where CRM data will increasingly be used is to fine-tune marketing spend so that marketers can identify who they need to spend more on and who will take lesser discounts. We’re seeing that across the board, from auto sales into retail. And that’s where we think the future is—talking to you and what’s going to make you cross the finish line with that brand. It’s going to be at the forefront of what people are doing, just from effectiveness and a response standpoint.

We have found most marketers do best when they spend about 70% of their marketing dollars talking to actual buyers, 20% of those dollars talking to people new to the brand and the remaining 10% on people that just happen onto their website that they’ve never tried to acquire.

But a lot of companies are very reluctant to do this. They want to put 70% of their budget into site remarketing. They want to pound users with a message for the next 15 days vs. trying to talk to their loyal customers and really build that long-standing bridge.

Malhotra: This is related to the fact that there are some marketing dollars that actually work against you as a marketer. If you’re in the subscription business, for example, you want to be very clear about marketing to a current customer or a prospect. Because if you don’t make that distinction properly and show a prospecting message over and over again to a customer, you are creating negative ROI [return on investment] for your marketing dollars.

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Learn more about leading CMOs and their perspective.

Redefining Markets:Insights from the IBV Global C-suite study –

The CMO Perspective

How are CMOs navigating this age of disruption where new competitors emerge at breakneck speed? The recent C-suite study from IBM’s Institute for Business Value reveals how marketing dynamos are embracing creative destruction and enriching the arc of engagement with customers.

PERSPECTIVES FROM THE

CMO

63% say creating better experiences for their customers is their #1 priority.

Customers inTheir Sights

expect to offer more digital opportunities for customer engagement.80%

Listen and Engage

Handshakes Form Partnerships

69%plan to partner more extensively to forge multi-dimensional customer experiences.

Competitive Spirit

60% expect more competition will come from outside their industry versus from within.

plan to hire employees with the relevant skills to improve the marketing team’s digital literacy.79%

Digital is in their DNA

Data-Driven Decisions

of CMOs are using predictive analytics today to explore new trends.69%

IBM Commerce




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Customer experience 2016 Roundup