Customer Service, Marketing and Technology

A report from the Economist Intelligence Unit

Sponsored by

cUStomER SERvIcE, mARkEtIng and tEcHnology: maStering the cuStomer journey

Customer service, marketing and technology Mastering the customer journey

1 © The Economist Intelligence Unit Limited 2014

Contents

About the research 2

Executive summary 3

Empowered customers, high expectations 4

Cloudy and confident 6

A positive view of IT 10

Conclusion 12



We would like to thank the following interviewees for their comments and insight:

Jo Causon, chief executive, the Institute of Customer Service

Lisa Cobham, contact centre and customer experience director , Ticketmaster

Adrienne Liebenberg, global marketing director, Castrol B2B

Kevin Murray, chief information offi cer, AXA

The report was written by Jessica Twentyman and edited by Pete Swabey.

About the research

Customer service, marketing and technology: Mastering the customer journey is an Economist Intelligence Unit (EIU) report, sponsored by Oracle, which examines how customer service and marketing departments use technology, their level of autonomy in technology-related decision-making, and their evolving relationship with the IT department.

This report is one of a series of four based on a Europe-wide survey of 272 senior executives, and it examines the answers of the 37 survey respondents who are in charge of customer services and 34 who have responsibility for marketing. The majority (57%) of customer service and marketing respondents work for companies with annual incomes over US$100m, and 62% are of C-level or greater seniority. In addition to the survey, the EIU conducted four in-depth interviews with customer service and marketing experts, as well as substantial desk research.



Executive summary

Digital technology has empowered customers to shop, research and communicate online and on the move, and businesses must be equally empowered if they are to engage with them effectively. To meet the demands of the digital customer, marketing and customer service departments are taking greater control over technology. This, they hope, will improve their return on technology investments, and ensure the technology they use meets their rapidly changing needs.

This is the picture that emerged from The Economist Intelligence Unit’s recent investigation of customer service, marketing and technology, based on a Europe-wide survey of 37 senior customer service executives and 34 senior marketing executives, as well as desk research and interviews with experts in the fi eld..

The fi ndings of that investigation, presented in this report, include the following

Today’s customers are armed with sophisticated mobile, social and cloud technologies. This is putting pressure on both the marketing and customer service functions to be more responsive to the needs of customers, present and future, and to master these technologies themselves.

In order to achieve this, both departments are taking greater control of technology. Of the customer service and marketing leaders surveyed, 61% expect to have greater

control over technology decisions that affect them in the next two to three years. This relative autonomy is allowing these departments to experiment more with technology.

They are also confi dent in their ability to manage technology themselves. Perhaps due to the penetration of cloud computing in customer service, respondents from that function are especially confi dent in their ability to manage technology themselves. The technological expertise of employees in both departments is also growing, most respondents believe.

Having more of a say over technology decisions will mean that investments will deliver greater returns, respondents hope, and will be likely to provide functionality that meets their needs. These are welcome developments at a time when marketing and customer service departments are expected to prove the value of what they do.

There are still areas where both customer service and marketing executives look to the IT department for guidance. In particular, they expect IT to take the lead in integrating disparate data sources. This a growing concern for both departments as the “customer journey”, the path of interactions between customer and company through the lifetime of their relationship, is mediated by an increasing number of systems and platforms.



Empowered customers, high expectations1

Today’s customers are demanding and opinionated: they are quick to speak their mind when they don’t receive the customer service they expect and are free with their praise when they do. And they expect businesses to treat them in a way that demonstrates a deep understanding of their individual buying habits, needs and preferences.

These expectations place considerable pressure on both marketing and customer service functions. Marketing must engage customers in the fi rst place and keep them coming back for more, while customer service must be able to deliver a great experience at various “touchpoints” along the way. And the two functions must work together, because customers don’t distinguish between a brand and their experience of it. For them, the brand is the experience—and a good customer experience translates directly into continued loyalty to a brand.

Social media, for example, are changing the way customers discover and interact with businesses in all industries, not just those in consumer-facing markets.

“This social revolution is hitting all of our customers, all of our suppliers—it’s everyone, everywhere, all over the world,” says Adrienne Liebenberg, global marketing director of Castrol B2B. “Customers genuinely expect Castrol to deliver the kind of service that they experience in their personal lives outside of work.”

At the same time, Castrol is adjusting to the idea that marketing is not a “loudspeaker”, but a “magnet”, she says. “Our research shows that

71% of our customers perform online searches before contacting us. One in three use social networks. That has huge implications for how we plan and execute marketing campaigns. We’ll need to adapt the ways we listen, converse and activate new products in the market. We’ll need a sharp focus on delivering consistent brand experiences, mostly through technology, at each and every customer touchpoint.”

Lisa Cobham, contact centre and customer experience director at Ticketmaster, an online ticket sales company, says that engaging with customers digitally takes more than having an account on all major social networks. “In customer service, you have to be accessible, and to be accessible these days, you have to be in the social media space,” she says. “But it’s not just a matter of activity on those channels, but also a matter of engagement: it’s about messages sent to brands, expecting fast response and resolution.”

Engaging meaningfully on social media carries a signifi cant manpower cost, Ms Cobham explains. More established customer-care channels such as voice and email are usually bolstered by technologies such as integrated voice recognition (IVR) and frequently asked questions (FAQ) knowledge bases, which manage and prioritise customer queries and, where appropriate, enable customers to solve their own problems and fi nd their own answers. Social media channels such as Twitter, she says, don’t have those self-service capabilities.

Jo Causon, chief executive of the Institute of Customer Service, agrees that there is an



imbalance between the tools available to the customers and those in use by businesses.

Today’s customers, whether B2C or B2B, often have access to more sophisticated mobile, social and cloud technologies than corporate customer service and marketing professionals have on the desk in front of them—and the staff struggling to serve customers are painfully aware of that fact.

In a recent survey conducted by the Economist Intelligence Unit, respondents from the customer service and marketing functions were more likely than their colleagues in other business units to say that today’s consumer technology provides better functionality than the tools that their own IT department provides: 32% of them agree with that statement, while 18% strongly agree.

“There’s a gap here that needs addressing at most companies,” says Ms Causon. But the future of great customer service, she adds, “lies not in the technology itself, but in the conversations and outcomes it enables.”

To what extent to you agree with the statement ‘Consumertechnology provides better functionality than the ITdepartment can provide’? (% of respondents)

Chart 1

Source: The Economist Intelligence Unit.

Customer service Marketing

Stronglyagree

Agree Neutral Disagree Stronglydisagree

3%17%

44%

15%

28%

10%

31%25%

22%

6%



Having a say in what technologies they have at their disposal goes a long way towards helping customer service and marketing professionals tackle this problem, according to Ms Cobham of Ticketmaster.

“I guess I’ve been lucky in terms of where I’ve worked. I’ve always had a good amount of control and degree of infl uence when it comes to building the business case for new technology investments,” she says.

The results speak for themselves, she adds: “We’re defi nitely closer to the customer now than we’ve ever been before, in terms of understanding where their challenges lie and making the customer journey smoother for them.”

“All this new technology is unleashing marketers’ desire to play and experiment,” says

Cloudy and confi dent2Ms Liebenberg at Castrol. “There’s so much data available and so many tools to choose from—and I expect to have a high level of control over most of the tools my marketers use if I’m going to take effective ownership over pricing, insights and customer experience.”

A shift towards greater technological autonomy for marketing and customer service is underway at the majority of organisations, the EIU survey found : 61% of executives and senior managers from these functions expect to have slightly or signifi cantly more control over technology decisions that affect their department in the next two to three years.

Of the two functions, customer service respondents are more confi dent of getting greater control than their counterparts in marketing. In customer service, 67% expect to


How do you expect the way in which technology decisions that affect your business unitare made will change in the next two to three years? (% of all respondents)

Chart 2

My business unit will havesignificantly more influence


My business unit will haveslightly more influence

There will be no change

The IT department will haveslightly more influence

The IT department will havesignificantly more influence 3%

13%

18% 3%

11%

23%18%

31%

31%

49%



have more infl uence in the next two to three years, compared with 54% of respondents in marketing.

There are many factors driving this change. First, customer service and marketing departments are acquiring more technological know-how. When asked whether technology expertise among staff in their business unit is growing , 78% agree or strongly agree.

“Ten or 15 years ago, we’d need to ask interviewees: ‘Have you ever used a computer before?’ Now, that’s just not an issue. We don’t target candidates on their technical ability, because it’s a given,” says Ms Cobham of Ticketmaster.

That’s certainly true of younger employees, but increasingly also of older ones, according to Ms Liebenberg. “As IT interfaces become increasingly intuitive, generational differences are becoming less stark, and employees of all ages are getting involved with new technologies,” she says.

Ms Causon of the ICS agrees: “We all approach technology with more confi dence. These days,

training needs to be more focused on trying to connect technology use with business results for staff, so that they understand exactly what we use technology for, why we collect certain data, and why we prioritise certain customer issues.”

Another factor is the technology itself. Cloud computing has done much to build confi dence about technology among customer service and marketing professionals, suggests Ms Liebenberg of Castrol. “The stratospheric rise of cloud-based software-as-a-service [SaaS] tool has meant there is less need to engage with the IT team in the same way that we used to,” she says.

“I recall the days when getting anything implemented that went even remotely near IT infrastructure meant that systems request forms needed to be completed, assessments carried out, and business analysts assigned.”

“Now, while it’s still important that we take digital security seriously and follow certain protocols, cloud deployment is much quicker, and it is making us more effi cient and productive, faster,” she says.

Cloud computing is the technology that most customer service leaders (59%) say is changing the way they work, more than any other technology. That makes sense, given that some of the earliest available and now most established SaaS offerings have been targeted at helping organisations to manage customer care. In other words, this area of business operations is particularly well supplied with end-to-end cloud options that provide functionality for the entire customer-service remit.

Among marketing executives, meanwhile, mobile tops the list by a wide margin, cited by 61% of respondents. As well as a marketing channel, via apps and mobile websites, mobile technology is also helping marketers be responsive to customer needs around the clock.

“Mobile technology is playing a massive role in how we work,” explains Ms Liebenberg

How confident are you in your business unit’s ability tomanage technology? (% of respondents)

Chart 3



39%

36%22%

3%

Veryconfident

Somewhatconfident

Neutral Somewhatunconfident

31%

54%

10%5%



at Castrol. “We have tens of thousands of customers in around 40 countries, and marketing teams scattered all around the world. Mobile capabilities ensure that marketing isn’t restricted to one location, so we have more fl exibility in how marketing works in different regions, and also in how we can travel and communicate, as a team, across locations.”

What impact will this greater autonomy have on customer service and marketing departments? The two functions were in agreement on the upside, and both voted improved return on technology investments as the number one benefi t of increased control. This is positive news, as both marketing and customer service departments are increasingly called on to prove the ROI of the work that they do.


Which of the following technologies, if any, are changing the way your business unit works? (% of all respondents)

Chart 4

Big data


Cloud computing

Digital marketing

E-commerce

Internet of things

Mobile technology

Social media

Software as a service

Web publishing

41%

59%

38%

41%

21%

49%

41%

33%

21%

28%

36%

42%

61%

42%

33%

50%

33%

31%

The second most commonly cited benefi t among both departments was that technology would be more likely to meet their needs, as voted for by 44% of each function.

The two departments had divergent views on the downside of greater autonomy, however. Respondents from customer service were most worried that more control over technology would lead to extra workload – this fear was identifi ed by 49% of the sample. Their peers in marketing, meanwhile, were more likely to express concerns about the impact on data-related considerations such as security and data quality.

In both cases, though, these fears underline the ongoing signifi cance of the relationship between the two functions and the IT department.



Marketing

What, if any, do you believe are the benefits of your business unit having more control over technology?

Chart 5

Better return ontechnology investments


Create a betterworking environment

Faster access to technology

Improved ability to grasp technology-related opportunities

Improved controlof technology cost

Improved departmentalperformance

Reduced pressureon IT department

Technology more likely to meet our needs

Customer service

(% of all respondents)

49%

28%

41%

28%

15% 25%

25%

36%

50%

28%

36%

33%

44%

42%

25%

44%

Marketing

What, if any, are the downsides to your business unit having greater control of technology?

Chart 6

Deterioration of data quality


Higher risk of technology failure

Higher technology cost

Increased workload

Inferior technology services

Information security put at risk

Poor integration of departmentalapplications with existing systems

Worse return ontechnology investments

Customer service

(% of all respondents)

41%

41%

15%

49%

26%

28%

44%

23%

24%

27%

39%

45%

18%

45%

45%

18%



and how new technologies should connect to the infrastructure we have already and how to manage the service,” says Ms Liebenberg. “The CIO also has to deal with a dazzling array of security, legislation and privacy laws—and I cannot see how marketing could add any real value to those activities.”

It is good news, then, that both customer service and marketing respondents agree that collaboration between the IT department and their business unit is improving. In marketing, 81% agree or strongly agree with that statement, while in customer service 77% do so.

They also agree that this collaboration is important. When asked what would help them manage technology better, improved collaboration with the IT department is chosen by 52% of the sample.

Says Ms Liebenberg: “Our ability to price, innovate and converse with customers and the market is now highly dependent on our IT infrastructure. It does not feature high enough on the IT agenda, because marketing and IT are not necessarily the perfect cultural fi t, but by constantly working at our relationship, we get better solutions. And the better we get at this, the more chance we have to become greater than the sum of our parts.”

One particular area where marketing and customer service leaders seek the support of IT is in mapping and managing the customer journey, to understand how current and future customers interact with the organisation.

Respondents from both departments are positive about the service they receive from their IT departments. When asked whether the IT department is able to provide them with the technology they need, 82% of customer service responents either agree or strongly agree, and 69% of respondents from marketing. Marketing once again, with 69% in agreement.

Evidently, the growing autonomy of customer service and marketing will not put the IT department out of work. There is certainly plenty that leaders from those units are happy to leave up to their peers in IT.

“The CIO should of course continue to determine which platform and which systems we use,

A positive view of IT3

To what extent to you agree with the statement ‘The ITdepartment is able to provide my business unit with thetechnology it needs’? (% of respondents)

Chart 7



Stronglyagree

Agree Neutral Disagree Stronglydisagree

28%

54%

10%

5%3%

44%

25%17%

11%3%



“I have to create a picture for the organisation of the customer experience, what it actually feels like for customers to do business with us, before I can suggest new investments,” explains Ms Liebenberg.

Optimising the customer journey is a multi-disciplinary practice, but one component is aggregate and analysing data from all the various channels through which a business and its customers interact.

As a result, both customer service and marketing professionals see the value of having data management and analysis capabilities within their own departments: when asked which technology capabilities they need in-house, 49% point to data management.

Clearly, though, this is a challenge that neither marketing nor customer service wish to address alone. When asked about the downsides to their business unit having more control over technology, data-related issues fi gure prominently. Poor integration of departmental applications is the chief concern, cited by 45% of respondents, while deterioration of data quality is cited by 42%.

Indeed, the kind of technical input IT can provide is invaluable when it comes to managing the customer journey, says Ms Cobham.

“I’m looking to build maps of the customer journey and identify where the top ten effort points are for customers along the way,” she says. “If there’s a technology needed at any of those points, I’ll try to identify it myself, but IT can often help me fi nd the piece that’s fi t for purpose: they’ll know, for example, if there’s an API [application programming interface] or piece of JavaScript needed, and how long it will take to provide.”

Ms Liebenberg agrees. “If I have a partner in IT who understands what I’m trying to achieve in

terms of customer experience, then we have more chance of diagnosing problems and delivering seamless interactions consistently, all over the world.”

In some cases, IT has taken an active role in mapping that journey, as is the case at French insurance giant AXA, where CIO Kevin Murray has taken the lead.

“We started with the call centres, and we created a business architecture pictorial that shows what the customer journey looks like today. It goes all the way from a customer researching a product—[working out] where they get their research information from—through engaging with us and buying a product, all the way down to when customers receive additional offers and, at the end of the journey, why they don’t renew,” he explains.

“By matching that customer journey to the products and services we have, we came up with a business architecture. The customer service function was quite surprised to see what it looked like. Then we asked them what they would like it to look like to external customers.”

This has allowed the customer service team to identify several areas where the technology architecture needed improvements; specifi cally, customer engagement, reimbursement and cross-selling.

Not every IT head devotes the same time and attention, however, to the customer journey. In the survey, when asked about the reliance of individual departments on technology, IT respondents put marketing at the top, but customer service well down the list.

That points, perhaps, to some missed opportunities for fruitful business-IT collaboration —and for improving the experience of today’s demanding, opinionated customers.



Conclusion

Customer service and marketing departments have evolved in harmony with the customers they serve: they have a greater understanding of—and are more reliant on—technology than ever before.

As a result, the executives and senior managers leading these departments expect to have more of a say in technology decision-making in future. This, they hope, will give them greater freedom to engage with customers on their own terms.

But mapping and managing the digital customer journey is a complex, data-driven process, and

customer service and marketing professionals look to IT to provide the technical excellence and data integration know-how required to make it possible.

Only then will businesses be able to meet customers’ demands for faster, more responsive service, based on a true understanding of their individual buying behaviours, needs and preferences.



Appendix: Survey results

Denmark

Finland

France

Germany

Gibraltar

Ireland

Italy

Latvia

Netherlands

Portugal

Sweden

Switzerland

United Kingdom

812

03

2218

33

30

223

09

03

1912

03

018

50

1918

Customer service Marketing(% respondents)In which country are you personally located?



Construction & civil engineering

Telecommunications

Financial services

Education

Healthcare and pharma

IT

Media

Manufacturing

Retail

Services

Transport, logistics and distribution

Power & utilities

Real estate

Technology

Consumer ex retail


33

113

199

56

2715

03

1118

83

53

09

36

06

50

06

312

(% respondents)In which of the following sectors do you work?

1

2 to 5

6 to 10

11 to 25

More than 25

3535

3829

146

53

826

(% respondents)In how many countries does your company operate, including the country of headquarters?




Less than $5m

$5m to $10m

$10m to $50m

$50m to $100m

$100m to $250m

$250m to $500m

$500m to $1bn

$1bn to $5bn

$5bn to $10bn

$10bn or more

012

33

03

03

4318

312

3827

512

53

36

(% respondents)What is the approximate global turnover (sectoral budget if public sector) of your organisation?




Board member

Senior partner

CEO or equivalent

CFO or equivalent

CRO or equivalent

CIO or equivalent

CMO or equivalent

Other C-suite

Senior director, VP or equivalent

Director or equivalent

Head of business unit

Head of department

Manager

Consultant

Student

Not currently employed

Self-employed

Retired

09

00

012

00

00

00

450

496

09

249

00

226

50

00

00

00

00

00

(% respondents)How would you describe your current job level?




Our business processes are more reliant on technology than those of most other departments in the organisation

Our business processes are no more or less reliant on technology than those of most other departments

Our business processes are less reliant on technology than those of most other departments in the organisation

3150

6236

814

(% respondents)How important is technology to your business unit’s processes?


My business unit will have significantly more influence

My business unit will have slightly more influence

There will be no change

The IT department will have slightly more influence

The IT department will have significantly more influence

1823

4931

1331

183

311

(% respondents)

How do you expect the way in which technology decisions that affect your business unit are made will change in the next two to three years?


Strongly agree Agree Neutral Disagree Strongly disagree

It is easier for my business unit to buy technology directly from suppliers than through the IT department

Consumer technology provides better functionality than the IT department can provide

Younger employees are demanding greater control over technology

My business unit has experienced difficulty as a result of taking greater control of technology

Collaboration between my business unit and the IT department is improving

The IT department is able to provide my business unit with the technology it needs

The technology expertise among staff in my business unit is growing

13

15

21

10

31

28

23

23

44

38

28

46

54

44

8

3

5

3

3

5

21

10

5

21

3

36

28

31

38

21

10

21 13

(% respondents)Customer service: To what extent do you agree with the following statements?



The IT department is able to provide my business unit with the technology it needs

Collaboration between my business unit and the IT department is improving

My business unit has experienced difficulty as a result of taking greater control of technology

It is easier for my business unit to buy technology directly from suppliers than through the IT department

Consumer technology provides better functionality than the IT department can provide

The technology expertise among staff in my business unit is growing

Younger employees are demanding greater control over technology

26

24

12

6

18

29

21

24

26

32

29

44

59

35

35

24

59

35

18

15

26

21

6

12

12

3

29

6

6

6

3

(% respondents)Marketing: To what extent do you agree with the following statements?

Strongly agree Agree Neutral Disagree Strongly disagree

Communications service selection

Data analysis

Data management

Device selection

Information security

Software development

Software selection

Technology project management

Technology support

Web content management

3841

3547

4347

2438

3232

2726

5141

2729

2229

3829

(% respondents)

Which of the following capabilities do you believe your business unit needs internally? And which does it currently have? My unit needs internally:




Communications service selection

Data analysis

Data management

Device selection

Information security

Software development

Software selection

Technology project management

Technology support

Web content management

3131

3149

4949

5426

3837

3646

3346

3137

3129

3651

(% respondents)

Which of the following capabilities do you believe your business unit needs internally? And which does it currently have?My unit currently has:


Better return on technology investments

Create a better working environment

Faster access to technology

Improved ability to grasp technology-related opportunities

Improved control of technology cost

Improved departmental performance

Reduced pressure on IT department

Technology more likely to meet our needs

4950

2828

4125

2836

1525

3642

3325

4444

(% respondents)What, if any, do you believe are the benefits of your business unit having more control over technology?




Deterioration of data quality

Higher risk of technology failure

Higher technology cost

Increased workload

Inferior technology services

Information security put at risk

Poor integration of departmental applications with existing systems

Worse return on technology investments

4145

4118

1527

4939

2624

2845

4445

2318

(% respondents)What, if any, are the downsides to your business unit having greater control of technology?


Very confident

Somewhat confident

Neutral

Somewhat unconfident

Not at all confident

3136

5439

1022

53

00

(% respondents)How confident are you in your business unit’s ability to manage technology?


Appointing technology specialists within the business unit

Devising a departmental technology strategy

Giving responsibility for technology back to the IT department

Hiring people with technology experience for non-specialist roles

Improving collaboration with the IT department

Staff training

4139

3142

4419

3328

5153

7444

(% respondents)Which of the following do you think would help your business unit manage technology better? Tick all that apply.




Big data

Cloud computing

Digital marketing

E-commerce

Internet of things

Mobile technology

Social media

Software as a service

Web publishing

4142

5933

3836

4142

2128

4961

4150

3333

2131

00

00

00

00

00

00

(% respondents)Which of the following technologies, if any, are changing the way your business unit works? Tick all that apply.


While every effort has been taken to verify the accuracy of this information, the economist intelligence unit ltd. cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report.

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Customer Service, Marketing and Technology