Gerry Brown (CX Research Director)

New research by IDC shows that COVID-19 has unexpectedly catapulted customer experience (CX) to the top of the European enterprise technology buying agenda. CX as a market has been a “slow burner” with question marks over CX’s definition, management, measurability, and ROI. For many, investment in CX required a top management “leap of faith.” But COVID-19 has changed everything.

Enterprises are trying to hold onto their precious customers by whatever means possible during these trying times. CX is not seen as just a short-term cashflow fix for the COVID-19 crisis and the oncoming economic slowdown, but also as a hedge against recession and a means to accelerate the return to growth and prosperity in “the next normal” on the other side.

CX may be the new Top of the Pops, but CX is no one-hit wonder — think of Bryan Adams’ (Everything I Do) I Do It For You (16 straight weeks at number 1) or Queen’s Bohemian Rhapsody (14 weeks at number 1). These songs have longevity far beyond their number 1 status — they are etched into our culture, hearts, and memories forever. We think the same will happen with CX — it is a strategic play. Here’s what we found:

Short-Term CX Demand

In our April survey of 584 enterprises across 9 European countries, we asked: “To address the challenges of COVID-19, which of the following has your organization been focusing on?” 40% answered “engendering trust with our customers.” This was fully 8 percentage points ahead of the second answer (“connecting organizations and individuals seamlessly regardless of their location, situation, or context”). Wow — not exactly what you would expect. Everybody has been talking about remote connection when the real short-term issue is how to deliver consistent quality customer experiences in challenging COVID-19 times to preserve customer revenue continuity and retention.

The key short-term market response to COVID-19 has been to invest in remote work-from-home cloud-based contact center capabilities and to shore up customer service availability and continuity. The contact center vendors acknowledge this trend — Genesys, Verint, NICE, Five9, and 8X8 have all turned in excellent double-digit revenue growth performances in 1Q. For example, the call center market leader, Genesys, attributed a massive 34% bump in its revenues to EMEA in 1Q20.

Medium-Term CX Demand

In our May survey of 736 enterprises we asked, “As a result of the COVID-19 pandemic, what are your top initiatives for the rest of 2020 and into 2021?” for a mid-term perspective. Once again CX came out on top. “CX programs”‘ scooped 45% of the responses, a 4% gap from the second choice (“connectivity of workforce, operations, and partners”). In the medium term, enterprises are investing in enhancing their digital CX technology platforms with AI, to empower digital CX innovation and become more fast and agile and move toward becoming “continuous learning organizations.”

Long-Term CX Demand

We asked, “What is the focus for your digital initiatives post-COVID-19?” for a long-term view. Yet again CX trumped other categories. “Customer engagement excellence” took first place with 33% of the vote and “customer excellence in products and services” took second place with 30% — a full 11 percentage points ahead of the third choice (“data capitalization and monetization”). In the long term, enterprises will build holistic CX-driven digital ecosystems to enable strategic competitive differentiation through superior CX. The key will be to embed a CX ethos and operating principles across the entire organization and all its supply chains and partner communities.

Advice for Tech Vendors

In a recent survey, 90% of tech vendors in Europe said CX was a top business priority. Tech vendors must not be tempted to cut their CX budgets in response to COVID-19 pressures. IDC research shows that your customers want CX excellence both now and in the future. CX is at the top of your customers’ tech pop charts and will remain there. To cut CX spending now will cost valuable customers and cripple your strategic competitive capabilities. Please ensure your CFO understands this.

For recommendations on how tech vendors should manage COVID-19 in their sales and marketing operations, download this free research document. If you want to learn more about CX or have any questions, please contact Gerry Brown or head over to https://uk.idc.com and drop your details in the form on the top right.

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