In today’s world, superior customer experience is a must and digitally-savvy companies have a competitive edge. While middle market companies say that customer experience is important in their ability to compete, only 34% say it is a critical part of their overall strategy. The National Center for the Middle Market conducted research to understand how middle market companies view the customer experience, uncover what actions they are taking to digitize that experience, evaluate the impact of digitization, and understand the obstacles to customer experience digitization.
How Middle Market Companies OPERATE Within Their Supply Chains
The Perfect Link
Selection (Breadth of service/ product offerings)
KEY FINDING 1
Digitization is transforming the customer experience
Middle market executives rank customer experience second only to quality, and more important than price, when it comes to the ability to compete for business. Today, digitization is playing an increasingly important role in delivering that experience. Nearly seven out of 10 leaders agree that digitization is essential for delivering a seamless customer experience.
Top 3 Customer Concerns
36%
48%
64%
Selection (Breadth of service/ product offerings)
Innovativeness
Price
Customer Experience
Quality
83%
70%
Attitudes Regarding Digitizing the Customer Experience
We see our digital strategy as distinct
from our overall corporate strategy
Our customers demand a digitally enabled overall experience
Digital is essential for delivering a seamless customer experience
Digital is essential to growing or transforming our business to meet future goals
KEY FINDING 2
Where CX matters most, it is likely to be digitized
About a third (34%) of middle market companies that say customer experience is a critical part of overall corporate strategy. These companies are the most likely to invest heavily in CX digitization tools.
Level of Focus on Customer Experience
1%
5%
22%
38%
34%
CX is one of the priorities that our management teams focus on
We do not focus on the customer experience
CX has a lower priority than others
CX is a priority within certain functions of the company
CX is a critical part of our overall strategy
KEY FINDING 3
Middle market firms fall into
four distinct CX digitization clusters
Based on attitudes toward digitizing the customer experience and actions that have been taken, the research shows that middle market companies can be divided into four categories. A fifth have strategic, advanced digital capabilities; another fifth are laggards; the rest fall in the middle.
non-digital
4%
17%
26%
39%
14%
21%
of middle market firms are
Non-Digital
These firms have not yet invested in any digitization tools for customer experience, and they feel that digitization has little impact on their business.
DIGITALLY REACTIVE
8%
7%
26%
40%
19%
32%
of middle market firms are
Digitally Reactive
This segment is made up of companies that have a reactive versus proactive approach to digitization. They primarily focus digital efforts on internal processes. Digitally Reactive companies have invested in at least one CX digitization tool, but no more than three.
DIGITALLY Advanced
3%
22%
28%
35%
12%
26%
of middle market firms are
Digitally Advanced
These firms have a conscious corporate strategy for digitization and believe that digital solutions are transforming their industries and their own businesses. However, they lack the universal or all-hands-on-deck mentality of their Digitally Strategic peers.
DIGITALLY STRATEGIC
6%
23%
47%
24%
21%
of middle market firms are
Digitally Strategic
We're barely digital at all
We are digital in spots only
We are in the process of digitizing and we are making good progress
CX is digital where we want it to be and not digital where we don't want it to be
CX is digital end-to-end and on all platforms/channels
These firms embrace the customer experience and CX digitization. They are most likely to say CX is critical to overall corporate strategy, and they understand how CX digitization is changing their industries.
The only provider customer uses for products/services offered
44%
42%
15%
38%
Feel their customers would help them if they encountered financial difficulty
70%
74%
45%
61%
KEY FINDING 4
The greater the strategic investment in digitization,
the more pronounced the rewards
The benefits of CX digitization are many, from cost savings to increased loyalty and share of wallet. But these advantages are not entirely linear. In many cases, they fully materialize only at the leading edge of CX digitization, after companies have strategically and heavily invested in the right CX technology and talent to deliver on their specific goals.
digitally
strategic
digitally
advanced
digitally
reactive
NON-
Digital
TOTAL MIDDLE MARKET
76%
76%
69%
71%
71%
Effectiveness of Digital Solutions - Extremely/Very Effective
48%
46%
33%
50%
52%
39%
32%
49%
36%
38%
29%
42%
Providing more visibility into the performance
of our business
Increasing the quality of our products
and services
Reducing cycle
times
Servicing our
customers
Increasing
productivity
38%
36%
30%
33%
26%
26%
41%
41%
KEY FINDING 5
Digitally strategic firms are best at customer experience.
They make the most money, too.
Companies in the Strategic Cluster
Grow Much Faster Than Others
Digitally Strategic firms are much more likely than their peers to believe they do a good job delivering against their customer experience goals. These companies give themselves a grade point average, or GPA, of 3.0 in this area, compared to 2.7 for the overall middle market.
digitally
strategic
digitally
advanced
digitally
reactive
NON-
Digital
digitally
strategic
digitally
advanced
digitally
reactive
NON-
Digital
TOTAL Middle MARKET
Digitally Strategic Companies are More Likely
to Achieve Their CX Goals
Digital CX
"GPA"
Not at all
effective
Not very
effective
Somewhat effective
Very
effective
Year-over-year revenue growth
Extremely effective
3.0%
9.9%
6.0%
6.1%
4.7%
2.7%
2.6%
2.5%
2.7%
1%
27%
45%
28%
3%
39%
43%
15%
1%
7%
40%
42%
11%
1%
10%
37%
40%
12%
2%
5%
36%
43%
16%
KEY FINDING 6
All firms have opportunities to realize greater benefits from CX digitization; but they will have to overcome key challenges first
Just 12% of all middle market companies and 24% of Digitally Strategic businesses have achieved an end-to-end omnichannel digital customer experience on all platforms. While middle market companies have made the most progress in back office areas, there is even greater gain to be had in customer-facing functions, such as service and marketing. To achieve these benefits, middle market firms must first find ways to overcome some key barriers to customer experience digitization.
Innovation/New Product
Service Development
Marketing/Lead Generation
Service/Customer Care
Product Service Delivery
Payments/Records
Progress Made Toward Achieving
Full Benefit of CX Digitization
69%
65%
60%
49%
60%
31%
35%
40%
51%
40%
Working with other companies in our value chain/ecosystem to deliver a digital customer experience
Managing a crosschannel, omnichannel customer experience
Managing internal conflict between "digital" and "analog" parts of the business
Capturing the financial return from our investment
Two Biggest Challenges Digitizing
the Customer Experience
48%
37%
24%
27%
Digitizing the Customer Experience: Are We There Yet?
KEY FINDING 7
Strategically investing in the most effective CX digitization tools may help companies achieve their goals faster
Companies say they will continue to invest in CX digitization. However, the most popular CX digitization tools are not always the most effective. By choosing the most appropriate and effective tools to deliver against specific goals, and ensuring the right talent is in place to deploy those tools successfully, middle market firms can create meaningful and advantageous digital experiences across the customer journey.
System Automation (i.e. ERP) with Partners–Supplers, Banks, Clients
Extremely/Very Effective
(Among Those Invested)
65%
68%
68%
Contracting with Cloud-Service
Providers for Service
Online Sales/eCommerce
Digital Marketing
Social Media Presence
54%
60%
System Automation (i.e. ERP) with Partners–Supplers, Banks, Clients
Digital CX Tools Currently Investing In
43%
43%
49%
Contracting with Cloud-Service
Providers for Service
Online Sales/eCommerce
Digital Marketing
Social Media Presence
74%
69%