Data silos are the biggest challenge for CX experts

Following the publication of CX Network’s annual, flagship report The Big Book of Customer Insight and Analytics, we look back on the findings the report unearthed. Gathering the insights of almost 200 customer experience experts, the report sheds light on major trends that are developing around the use of data in CX. 

Feedback data remains the main source of personalization

For the second consecutive year, CX Network found the majority (41 percent) of respondents say that process improvements from customer feedback data are one of the primary sources of personalization initiatives in their businesses.

This suggests that many businesses still see feedback data as critical to the improvement of CX solutions, however it also highlights that more than half of them do not see it this way. There is seemingly no purpose in the practice of gathering customer feedback if these insights are not used to improve the customer experience and deliver what customers are looking for.

Scott Draeger, customer experience officer at Quadient, suggests this may be due to a lack of visibility over customer feedback across the business, and advises businesses to share customer feedback interdepartmentally.

He says: “This type of data protectionism prevents businesses from accurately reporting LCV, which hinders their ability to increase LCV and profitability over time.”

Most businesses are not using predictive analytics

The application of predictive analytics for improving customer experiences has not quite taken off yet, it seems. With 77 percent claiming that they are not yet applying the technology, it is clear some trepidation remains with regard to its implementation.

The coming years do look more promising for predictive analytics, however, with 38 percent of those who claimed to not yet be employing predictive analytics noting that it is on the radar for their business and could potentially still be picked up. Draeger advises those looking to implement predictive analytics to first ensure that their data is clean, before attempting to augment it with third-party data.

Regarding the advantages of predictive analytics, Draeger explains: “Predictive analytics puts customers into personas and helps target marketing and sales process adjustments that maximize the outcome. The best part is that predictive analytics constantly refresh, ensuring that changes in the market instantly trigger a new response. This can help you pitch what will sell, help the customer onboard faster and use the recent experiences of others to guide the next set of customer journeys.”

Data silos are the biggest customer data challenge

The report found that 46 percent of respondents listed data silos as one of their top three customer data challenges, more than any other challenge that was listed. While this percentage is not significantly different to the figure recorded in The Big Book of Customer Insight and Analytics 2021, in which 47 percent respondents flagged this challenge, data silos have now taken the top spot due to decreasing concern over the previous greatest challenge – integrating data from diverse sources.

Data silos do represent a significant challenge for businesses, with Draeger noting in the report that such issues will inevitably result in internal inefficiencies cropping up elsewhere. Draeger did offer hope to those experiencing such issues, however, remarking that by unifying the business to fix these CX sticking points, companies can save money and drive profits.

He says: “Unifying [your] business with personalized experiences tends to break [data] silos in ways that help departments have meaningful conversations that increase the speed of change in the business.”

In turn this impacts the ability to compete and therefore retain customers longer. Draeger adds that businesses can expect to see their Customer Acquisition Cost (CAC) fall and Customer Lifetime Value (CLV) rise, as data silos are broken down.