2018 Ovum High Tech Research Report

Customer Experience hits and disappoints in high tech.

by Jill Steinhour

posted on 10-03-2018

Customer experience is the new black — except it’s unlikely it’ll ever go out of style. Everything from the latest analyst research to our own experience as customers points to its ever-increasing importance. Customers might have always been right, but it’s now clear that their experience is central to business success — or failure.

It’s no different for high tech companies, and those of us in the industry appear to know it. In a new report from Ovum commissioned by Adobe, “High-Tech Digital Investments Lead to Customer Experience Gains,” nearly 80 percent of the high-tech marketers surveyed said they’re looking to improve the quality of their customer experiences over the coming year.

Increasingly confident

On first blush, it appears high-tech companies are confident and even bullish about how well they’re doing with customer experiences so far. A surprising 87 percent of respondents said they’re able to keep pace with escalating customer expectations — which is 10 percent higher than last year’s response.

Why the increasing confidence? Partly it’s because many high-tech marketers believe they’re getting better at understanding their customers. Last year, a clear majority reported that “understanding individual customer needs” was a key challenge for them. This year, that number dropped substantially — down 25 percentage points to 40 percent. Other customer-oriented challenges also dropped year over year.

Source: Ovum report: “High-Tech Digital Investments Lead to Customer Experience Gains”.

Confidence vs. reality

But there are indications that high-tech companies might want to tone down their confidence, especially considering the exemplary experiences required to differentiate in competitive environments such as high tech. For example, falling net promoter scores for high-tech companies over the last couple of years paint a less-than-rosy picture. According to Temkin Research, the average NPS for tech vendors went down from 31.8 in 2015 to 21.4 in 2017. And there’s a close connection between NPS and customer experience.

That matters. NPS correlates to a willingness for customers to repurchase, try new offerings, and forgive organizations. Plus, research has shown that companies dedicated to customer experience over time tend to outperform their peers on metrics across the customer lifecycle, from acquisition to retention.

And when you dig into the Ovum report, you start to see beyond the bluster to the many challenges that high-tech marketers are still facing. For example, over half of respondents said that inadequate budgets, security risks, and a lack of staff are barriers to digital transformation. And despite their growing confidence around customer understanding, customer data continues to be a challenge for many. Nearly all survey respondents reported at least some challenge around data analysis, integrity, integration, and capture — and a substantial percentage reported the challenge as “business-critical.”

Source: Ovum report: “High-Tech Digital Investments Lead to Customer Experience Gains”.

Investing in experiences

When asked about digital marketing investments, this year’s respondents said they planned increases across the board compared to last year’s respondents. Every option posed saw greater numbers, but the biggest year-over-year growth was in campaign management, customer experiences, and account-based marketing, all of which were 10 percent higher than last year.

Based on the research, Ovum provided their recommendations on where you should invest your dollars in digital. Here are some examples:

Additionally, there’s a clear need to democratize data. By bringing real-time, easily digestible data to your nontechnical employees, they can easily interpret, share, and act on data-driven insights throughout the customer journey. That in turn leads to not just more customer understanding, but also to potential experiential improvements.

_Read the Ovum report: High-Tech Digital Investments Lead to Customer Experience Gains.

Businesses that prioritize experiences are winning, and this report captures how high-tech companies overall are trying to address that. But not all high-tech companies are the same, of course. In the next blog, we’ll dig deeper into the Ovum report findings and see how subsectors in high tech vary in how they approach customer experiences — and how even subtle differences can make a big difference.

_Find out more about how software and hardware industries think differently about the customer.

Topics: Industry, Digital Transformation

Products: Advertising Cloud, Experience Manager, Experience Cloud