Customer experience technology is an overarching term for any piece of software or hardware that is used to improve the experience a business delivers to its customers.
As customer experience (CX) has become increasingly more important to brands across many verticals, so too have the technology solutions that help improve it and maximize its efficient execution.
On this page, we delve into what customer experience technology is, why it’s important, how it differs from customer management technology, and the pitfalls to avoid when using it.
1. What do we mean by CX technology?
Customer experience technology is an overarching term for any piece of software or hardware that is used to improve the experience a business delivers to its customers.
According to most sources, CX is the biggest differentiator for businesses right now. Need more convincing? 73% of U.S. consumers say experience is as important as products and services, according to Salesforce, and according to Martech Alliance, 78.5% of CMOs agree or strongly agree that amazing customer experiences provide a powerful competitive advantage.
While there can be hardware devices that improve customer experience (e.g. directional microphones for calling agents that improve calling sound quality), the majority of strategic CX technology solutions are software-based
2. What’s the difference between customer experience technology and customer management technology?
The main difference is that customer management technology is often focused on managing customer relationships, whereas customer experience technology is used to optimize customer experience touchpoints.
The reason customer experience technology and customer management technology are often conflated is that they share a lot of similarities. But as explored below, there are also some key differences.
Customer management technology
The most commonly used customer management technology is customer relationship management (CRM) software. CRM platforms are used to manage interactions with current and potential customers.
CRM powerhouse Salesforce describes a CRM system as one that “helps organizations build customer relationships and streamline processes so they can increase sales, improve customer service, and increase profitability.” It’s worth noting that many top CRM platforms (such as Salesforce) now include a range of CXM functions too.
Customer experience technology
Customer experience technology covers any software or hardware solutions that allow businesses to improve the experiences they deliver to customers. This includes everything from in-call technology such as interactive voice response (IVR) right through to systems that allow businesses to collect customer data securely.
In the most successful CX programs, these technologies are used as part of a connected customer experience management (CXM) strategy and are often referred to as CXM technology.
Key differences
Customer management technology / CRM
Predominantly captures data via manual input or batch entry
Typically used by sales and marketing teams
Tracks customer interactions and customer data
Customer experience technology / CXM
Enables real-time data capture including behavioral data on customers
Used predominantly by customer service, success, or experience teams
Tracks customer feedback and sentiment
3. What’s the role of technology in CX?
Technology can play a vital role in delivering great customer experiences—if used judiciously.
All interactions or touch points on a customer journey—from initial discovery through to purchasing and beyond—contribute to the overall experience a business delivers for its customers. As the majority of these interactions are digital, the right technology choices can be a big differentiator.
Maybe more than ever, customers expect businesses to use technology to improve their overall brand experience. For example, in the retail sector, 94% of shoppers are of the opinion that customer service still has room to become more technologically advanced, according to research by SmartKarrot.
This goes beyond simply using technology to facilitate transactions or streamline processes. Now it’s about transforming the customer experience through new technologies. That means: orchestrating omnichannel customer journeys, increasing personalization, making marketing materials more relevant, and improving customer engagement with products and services.
Improving the customer experience through technology
“Sporting venues are fully leveraging the proliferation of the smartphone to enable touchless entry, fast and easy ticket transfers, and mobile ordering and payment for concessions and merchandise. For experienced fans accustomed to long lines to enter the gates or buy a hot dog, it’s a whole new world.” Vertiv’s Gary Niederpruem in Forbes.
When used as part of a holistic customer experience management strategy, customer experience technology helps businesses reach customer expectations and improve customer loyalty. That makes CX technology critical for creating and maintaining a competitive advantage.
4. How is CX technology used for business transformation?
CX technologies and CXM technologies aid business transformation by improving a business’s understanding of their customers, which can then inform strategy and open doors to new operating models.
Want to find out more about business transformation? Check out our business process transformation resources in our Learning Center.
Improving understanding of customers
CX technology and CXM technologies enable businesses to collect and use their customer data more effectively. This data includes customer behavior data and preferences, which allow the business to develop a greater understanding of customer expectations and needs.
This understanding can then be used to design impactful CX programs or inform strategic CX decision-making. CX and CXM technologies can be used to measure the effectiveness of those strategies and track customer satisfaction, brand loyalty, and engagement.
This will highlight areas for improvement and optimization which will in turn influence how a business approaches its transformation process. Want to see how this works in practice? Check out our CX solutions page.
Opening the door to new operating models
The use of CX-related technologies allows businesses to change the way they operate.
For example, by using CX-related technologies such as chatbots and smart call routing, call centers can rethink their approach to agent deployment and training. Prior to these technologies, all customer calls went into the same calling queue, regardless of the nature of their query or issue.
But today’s consumers are demanding shorter wait times and more self-service options. By implementing a chatbot service, for instance, customers with queries that are easier to solve can get the answers they need quicker. This reduces the overall volume of calls the business needs to handle.
Smart call routing technology then directs customers with more complex queries to the appropriate agents to resolve their issues. Check out this case study to see the impact a multichannel approach can have on business performance.
Aside from the CX improvements, this automation allows businesses to transform operations through the use of models such as smart-shoring.
Want to dive deeper into how digital technology has impacted the customer service experience? Click here to jump to our page on that very subject.
5. What are the most common CX technology mistakes?
CX and CXM technologies can provide businesses a raft of benefits—but only if used correctly.
Below, we explore three common mistakes businesses make
1. Over-indexing customer experience technologies
Overuse of CX or CXM technologies frustrates customers and damages your CX. For example, while chatbots are a key element of improving CX in many sectors, there are some situations in which customers overwhelmingly still prefer the human touch.
So when implementing CX or CXM technologies, it has to be used strategically—in a way that actually improves CX outcomes.
2. Inadequate CX technology training
Some businesses overlook the fact that CX and CXM technology will require employees to change their own behavior and adopt new skills.
For example, if agents are not given adequate time to understand how technologies such as in-call artificial intelligence work, chances are they won’t use them at all. And if they can’t opt out of the technology? Then you’re looking at decreased employee experience satisfaction, which will in turn negatively impact CX program performance.
Click here to jump to our page on how employee experience impacts the customer experience.
3. Lack of a comprehensive CX strategy
Isolated CX tech initiatives produce minimal gains. To be effective, CX and CXM technologies need to be used as part of a wider customer experience strategy.
For example, businesses in all sectors have rushed to develop apps for their customers. But unless an app is fully integrated into a wider CX strategy, it’s unlikely to succeed. In fact, only 0.5% of apps are successful, according to Zippia.com.
So make sure your use of CX technology is part of a wider strategy and is always linked to customer data, and real customer needs. If you want to see what that looks like in practice, check out our CX solutions page.
6. What does the future hold for CX technology?
While the digital disruption and acceleration caused by the pandemic have slowed, it laid the foundations for the continued development of CX and CXM technology solutions.
Of the many emerging CX trends, here are three you need to be aware of.
The metaverse and CX
The biggest change in the pipeline for CX technology is the metaverse. How successfully businesses incorporate the metaverse into their omnichannel CX journeys will likely dictate how competitive they can be.
25% of people will spend at least one hour per day in the metaverse by 2026, according to research from Gartner.
Businesses in the retail sector will be particularly keen to stay ahead of the curve as their competitors invest heavily in “virtual land”. Businesses and individuals have spent nearly $2 billion on virtual land in the past 12 months, according to the BBC.
Positive customer experiences using Web 3.0
Forward-looking CX teams are assessing how best to use Web 3.0 to improve customer experiences.
Web 3.0 should give customers greater peace of mind as its use of blockchain technology decreases the likelihood of their data being lost or hacked. These assurances will likely change customer behavior and expectations, which will have a ripple effect on the nature of CX interactions.
It also means that businesses will not be able to access customer data in the ways they have before. As such, the ways businesses interact with their customers and create personalized experiences will also need to change.
Connecting customer touchpoints across decentralized teams
Businesses have become increasingly more decentralized through the use of operating models such as smart-shoring.
This means departments and teams are more distributed and the use of partnership models is increasing. This will put increased pressure on the ability of businesses to ensure consistency across departments.
Currently, 73% of U.S. consumers expect consistent interactions across departments. Yet, an incredible 60% of consumers say it generally feels like they’re communicating with separate departments rather than one company, according to research from Salesforce.
Take call centers, for example. When calling agents are no longer under one roof, CX teams will increasingly need solutions that allow for seamless data flow between locations without sacrificing data security or failing to maintain compliance.
When it comes to emerging trends, this is the very tip of a pretty sizable iceberg. If you want to explore more—check out our page on emerging CX technology trends.
It includes a detailed rundown of the things you need to think about now, including why self-service solutions are an absolute necessity.
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