Executives don't decide how customer-centric their companies are—their customers are the ultimate arbiters. Digital disruptors—a term coined by Forrester describing companies that leverage digital platforms to take advantage of customers' heightened expectations and deliver a more compelling product and service experience at a lower cost—are threatening traditional business models. I will be exploring this challenge and discussing how to establish the right digital agenda on October 18-19 at the upcoming Forrester conference Developing Digital Disruption: A Forum For Application Development & Delivery Professionals.
Our research shows that a good experience impacts customers' behavior in three ways: 1) they are more willing to consider another purchase; 2) they are less likely to switch their business to a competitor; and 3) they are more likely to make a favorable recommendation. But how does that affect a company's bottom line? We estimate that the revenue impact from a 10-percentage-point improvement in a larger service company's performance, as measured by Forrester's Customer Experience Index score, could exceed $1 billion.
This is a guest post from Anjali Yakkundi, a Researcher at Forrester Research. It originally appeared on destinationCRM.
By now, everyone knows that engaging and dynamic customer experiences are a key competitive advantage, and “business as usual” will no longer suffice to support these engaging digital experiences. Organizations that don’t embrace this customer-focused thinking will risk missing out on important opportunities and will lose strategic advantages.
From a technology standpoint, the key to success will be integrated, best-of-breed customer experience management (CXM) solutions. This includes technologies such as Web content management (WCM), CRM, eCommerce, digital asset management (DAM), site search, and Web analytics.
We recently completed an evaluation of the DAM market. DAM is a key process-based solution that focuses on managing rich media content (e.g., videos, images, graphics, and audio). Despite the well-documented importance of rich media in cross-channel customer experiences (consider the amount of video and images on the Web or in marketing content now versus just five years ago), DAM solutions have long been overshadowed by other CXM technologies. These solutions have traditionally been relegated to niche, rich-media-heavy industries such as media, publishing, and entertainment. But as more and more organizations understand the importance of a cross-channel rich-media strategy to improve customer experiences, DAM for customer experience is experiencing a revival in interest across verticals.
As I recently celebrated my fifth anniversary as a Forrester analyst, I reflected on how my coverage area has changed. For the past five years I've covered the web content management (WCM) market. This has been a healthy market, and I still get plenty of interest from my clients on this topic.
But the context of that interest has changed markedly, particularly over the past year. When clients used to ask about WCM, they wanted to know about WCM and WCM only. But these days, they ask about WCM in the context of other technologies supporting customer experience, such as commerce, CRM, and analytics. Our clients have reached a logical conclusion: WCM isn't the end-all-be-all for digital experiences but instead is one piece of the customer experience management (CXM) puzzle.
And the market will continue to evolve in 2012. In particular:
Watch for an avalanche of acquisitions, both big and small. Though larger vendors have multiple pieces of the CXM puzzle, no one has yet put together a complete portfolio. Vendors are still missing some critical pieces, such as rich media management (IBM), commerce (Adobe), and testing and optimization (Oracle, SDL). Watch for the CXM vendors to compete to fill these gaps. High-reaching best-of-breed WCMs such as Sitecore may not remain independent for long.
Contextualization will become the byword. Forget complicated business rules and template schemes. Technology to contextually adapt customer experiences based on user segment, browsing behavior, locale, and device will be high priority. Vendors will make strides so that customers can increasingly take an "automate + optimize" approach: automating contextualization for most experiences and manually optimizing it for a few high-profile experiences, such as home pages.
There has been a great deal of talk over the past few years about what acronym will replace WCM (web content management). Web experience management? Web site management? Web engagement management? Web experience optimization? The list goes on and on.
Certainly, the evolution of the WCM term makes sense on paper, since traditional content management functionality now only makes up a portion of the products that WCM vendors now offer. WCM vendors are also in the content delivery/engagement business, and are even dipping their toes into web intelligence. However, Forrester clients still overwhelmingly ask about “WCM” and that term isn’t going away any time soon.
But even without changing the acronym, it is time to start thinking about WCM beyond just managing content or siloed websites or experiences. Instead, we need to think of how WCM will interact and integrate with other solutions – like search, recommendations, eCommerce, and analytics – in the customer experience management (CXM) ecosystem in order to enable businesses to manage experiences across customer touchpoints.
How are we handling this convergence at Forrester? Several of us who cover various CXM products – like Brian Walker (commerce), Bill Band (CRM), Joe Stanhope (web analytics), and myself (WCM) – teamed up to outline what our vision of CXM looks like, including process-based tools, delivery platforms, and customer intelligence. We've created two versions of the report: one written for Content & Collaboration professionals and one for eBusiness & Channel Strategy professionals.