These are the reasons why a better customer experience fails

The "2020 Global Customer Experience Study" by Pegasystems examines the global status quo in terms of customer experience (CX). On behalf of Pegasystems, the market research company Savanta surveyed decision-makers in twelve countries and from seven different industries - including 451 study participants in Germany. The study identified four key weaknesses in German companies when it comes to optimizing the customer experience towards more personalized customer experiences:

• Lack of coordination between IT and business causes problems. In German companies, CX projects are mainly managed by IT departments (41%). Dedicated CX functions (6%), customer engagement specialists (6%) or senior management (5%) are only rarely responsible. While it is very important that IT supports such projects, it should not be forced to make business decisions for the business departments that involve a new approach or technology for them. If the business departments are not involved in these decisions, this can lead to considerable problems.
• There is a lack of sponsorship from top management. In only 34% of German companies do CX projects have a sponsor at management level. In 30 percent of them, such projects are sponsored at division manager level or below. The consequences can be a lack of expertise and leadership responsibility within the initiatives; and those involved may doubt the company's conviction in the great importance of customer experience. If, on the other hand, management is involved, this can also promote alignment between business and IT and drive the necessary changes.
• Companies are not investing in the most relevant channels. 90 percent of German respondents stated that they primarily focus on the needs of their customers when operating channels. However, their actual activities speak a different language. For example, 36 percent intend to spend money primarily on email in the coming year and 32 percent on digital advertising - and thus on channels whose response rates are considered to be falling. In contrast, only 28% want to invest in inbound centers, which are generally preferred by customers.
• Outdated analysis methods are often used. Customer analysis methods have developed rapidly. However, many German companies still use outdated and ineffective solutions. For example, 37% rely on customer journey mapping, 33% on micro-segmentation and 26% still carry out time-consuming A/B tests. Customer-centric methods, which could give the customer experience a major boost, are still a long way from being widely adopted. For example, only 38 percent use propensity modeling, 34 percent forecast customer lifetime value and 33 percent carry out performance simulations.

"A new, holistic strategic approach is needed. Companies need to look at their customers in a completely new light - as individuals with unique preferences and needs in a complex real-time relationship," says Harald Esch, General Manager and Vice President DACH at Pegasystems.

"You have to earn the right to this relationship every single day. Above all, this requires a rethink at the top of the company. The management must be prepared to realign the core business with the customer at the center."

A total of 5,000 decision-makers from the USA, Canada, the UK, France, Germany, the Netherlands, Japan, India, China, Singapore, Hong Kong and Australia were surveyed for the 2020 Global Customer Experience Study by Pegasystems. They come from the insurance, healthcare, financial services, communications, automotive, energy supply and aviation sectors.