How businesses who prioritize CX drive 3x more revenue growth
Q&A with IBM and Adobe
In partnership, IBM and Adobe wanted to learn how businesses are prioritizing customer experience and tracking business results as they emerge from the shadow of the pandemic and move forward with digital transformation. The two companies worked with the IBM Institute for Business Value (IBV) report to develop Optimizing Your DXP Capabilities. It’s based on conversations with 400 US-based executives who are responsible for their company’s digital experience platform.
During the process, it was discovered that organizations who elevate CX digital transformation to the status of a formal business priority reported three times higher revenue growth in the past two years. Below, report coauthors Justin Ablett (Global Adobe Practice Lead, IBM iX) and Scott Wellwood (IBM Alliance Lead, Adobe) share what they learned about the urgency around CX transformation, why companies prioritizing CX are experiencing significant revenue growth and how digital experience platforms help transform CX.
Were you surprised to learn that organizations with CX as a formal business priority reported three times higher revenue growth?
Ablett: No. Customer experience is one of the top ways companies can differentiate themselves from competitors. We learned that among the CEOs leading the most financially successful organizations in the IBV 2021 CEO study, 60% list “delivering better customer experiences” as one of their highest priorities in the next two to three years. Personally, I am willing to pay more money and show brand loyalty to companies that create a beautiful, simple, addictive experience for me. The companies seeing higher revenue are not paying lip service to CX; they’re assigning an owner, allocating budget and creating KPIs. But most importantly, these CX “Experience Leaders” make it part of the culture, meaning everyone in the company is responsible for CX, not just a separate team.
Wellwood: I absolutely agree with Justin. I predict that these companies’ revenue gains will not only increase, but organizations not embracing CX will be penalized in terms of profitability and revenue. Their revenues will dissipate even more, and that will just mean an increase for those experience leaders, versus laggards.
In the report, you noted that 56% of clients surveyed struggled with the platform requirements of competing business units. What advice can you offer to leaders with the same challenge?
Ablett: It’s relatively easy to do experience transformation just with one use case, in one pocket of an organization. But clients are finding it challenging to do it across the organization, for every customer journey, at scale, which is where organizations see the revenue growth. A critical way to address this is by creating a cross-functional coalition of executive stakeholders — CTO, CIO, data, security — with the goal of thinking as one. The goal is to change the hearts and minds of executives and teams, so everyone views CX as their corporate North Star. Once everyone in the organization has the same focus on CX, the potentially competing objectives and metrics between the different parts of the organization resolve. Organizations then typically begin showing revenue increases from their CX transformation.
What can companies learn from Experience Leaders to drive revenue growth at their own organizations? What are these leaders doing differently?
Wellwood: To deliver the best experience in all customer engagements, CX must be embedded into every action throughout the entire organization, and every team member must be committed to the task. Prioritizing CX isn’t easy, and it requires a very strong commitment to see the revenue increase in an organization.
Experience Leaders realizing three times the revenue growth are with companies that are able to harness their large volumes of data and build out multiple systems of record to integrate that data into how they communicate with their customers — whether it’s in-store, online or on social media. While creating the report, we learned that 52% of Experience Leaders were in the mature phase of DXP enhancement, compared to 38% of non-leaders. We defined DXP maturity as being in the midst of expanding current capabilities and integration beyond point solutions, or already having completed significant expansion and integration into enterprise-wide solutions.
We also saw that 86% organizations found that personalization is an area of CX that plays a large, if not essential role in the customer experience. Other top choices included compelling content (75%), AI (68%) and automation (67%). Interestingly, many organizations depend on AI to deliver personalization at scale and automation to deliver compelling content.
Ablett: When I think about the clients who are really Experience Leaders, three things stand out to me. First, they think with an ecosystem mindset — meaning that they don’t try to do it all themselves, but work closely with digital experience platform vendors. Instead of just buying software, they keep a close relationship in terms of the product road map and functionality so they can learn from the experience the vendor gains from similar transformations with hundreds of clients around the world.
Second, they really think about transforming how they work — systemically. Not just in terms of the upfront ideation and customer journey creation, but in how they deliver to create a culture of ongoing innovation.
Third — and this is the one that I am really passionate about and really see makes a difference with the leading clients — they put humans at the heart of their transformation. These organizations are thoughtful in terms of their employee experience transformation as well as their customer experience transformation, which means creating a fabulous employee experience and making their team the superheroes of the transformation.
Wellwood: One of the biggest insights from the report is that CX is a journey, not a destination, which means it’s never finished and will always be an evolving process and investment. As Justin said, the more we advance that mindset so we are always thinking about CX across every facet of the organization, the more successful companies will be.
How did you see the findings from this report in action over the past two years?
Ablett: One thing that really hit me this past year personally was the truly inspiring efforts from corporations, organizations and governments that quickly digitized in-house. When someone needs their welfare check or tax refund, they need to receive it regardless of the pandemic. I was truly inspired to see how IBM and Adobe were able to help these organizations make that transition very quickly so they could go back to providing those essential services to their clients and constituents at the end of the day.
Wellwood: And that’s where customer experience gets real, right? It’s one thing to increase profitability. And it’s another thing to drive a better experience to be a market leader. But at the end of the day, we need to serve people and meet their needs.
To learn more about how you can use digital experience platforms to transform your CX and become an Experience Leader, download the Optimize Your DXP Capabilities report.