The numbers are confronting. According to Forrester’s latest CX Index, customer experience gains have been flat across most Australian organisations over the last few years. That equates to a lack of distinctiveness across categories as diverse as banking and retail to the public sector.

“Most of those tracked in our studies deliver just ok experiences – they’re running on the treadmill, not able to differentiate,” Forrester analyst Riccardo Pasto, warns.

Forrester isn’t the only crew in town flagging poor progress on CX. CBSA data recently revealed brands may have been heavily investing into digital transformation and tech to drive better experiences for customers, yet benchmark scores for CX performance have barely moved over the last seven years.

So how are next-best experience gains to be achieved? What tools, operating models and cultural changes can help brands realise them? Is AI starting to help? Does experience have to equate to cost efficiency or can you orient around innovation or new products and deliver business impact that way? And how do you make sure your CX efforts truly connect through to future value?

The hurdles stopping marketing, digital and CX leaders from experience uplift were the fodder over fine food at Mi3’s inaugural CMO roundtable lunch, run in Sydney in partnership with Avanade, a Microsoft ecosystem consultancy focused on creating relevant and enduring experiences that accelerate growth. In attendance were more than a dozen senior leaders from diverse sectors including retail, supermarkets, consumer goods, education, tourism, manufacturing, and health and pharmaceutical.

For Joan O’Reilly, the Avanade X Australia Experiences Business Lead, it’s no surprise brands are having a tough time keeping pace given consumer behaviours are constantly changing.

“Consumers want companies to respond to their needs more quickly and they are also feeling like companies are prioritising higher profits over their personal experiences,” she says.

The good news is organisations share an ambition to deliver experience uplift. Delegates revealed boards and executive teams with their eyes on CX investment as a way of building growth. As one FMCG digital leader put it: “We have leadership that is prepared to invest, technology is a key part of the strategy, the team is in place to execute this well and the ambition is there. We know where we need to go.”

Ambition hasn’t been equating to reality, however – especially when so many priorities are competing for attention. Several attendees suffered from cost efficiency imperatives and short termism taking precedence over strategic programs of work that would pay dividends in the longer term. This manifests most prominently around prioritisation of tech investment, time and resources, and discrepancies in focus and what constitutes progress on CX. More broadly, misalignment of business goals came up frequently during the roundtable conversation.
 

Short-term economic crunch versus long-term gain

It’s clear macro-economic conditions like inflation and softer spending conditions are taking their toll on CX programs too. That’s most notable in retailers shoring up short-term sales performance and cost reduction efforts.

Just take one digital-first Australian retailer, who prides itself on nailing the delivery proposition, seamless engagement and service excellence. “We’re trying to do so many things that while we do some things really well, we are getting in our own way,” the retailer’s CMO said, noting internal friction from partnerships to marketing.

“It frustrates me in meetings when we don’t focus on the dial shifters. We try to do so many things… or we have channel-based strategies.”

With it being “warfare out there in retail”, the CMO struggled to get strategic changes over the line. “Executives say we need to do stuff that’s going to drive sales tomorrow, therefore tech resource is prioritised according to that roadmap, which is crazy. You have to have short and long term with a commercial lens – the long term is about future demand.”

Where marketing is perceived as a shared service rather than growth leader, the disconnect between what makes a great experience and what delivers top or bottom-line commercial impact is only amplified.

“As marketers, we want to personalise things and use data to better target offers to customers. We also want to try and elevate CX in the way we can in our own area. The challenge is that’s not high up from a business perspective,” another retail-based marketing leader said. “We’re trying to elevate what we can do without distracting us from the day-to-day where availability and efficiency is the primary value exchange with customers.”

O’Reilly saw pressure to drive more customer acquisition and retention to enhance company performance everywhere. Leaders across all industries are focusing on cost optimisation and scrutinising spend in all areas of business thanks to tougher trading conditions, she said.

“It’s a fine balance between focusing on increasing margins as economic headwinds occur, while also making the customer feel like they are the priority and that your motivations aren’t entirely monetary,” O’Reilly said. “Significant investment is required to do that at a time when companies may be struggling, all while customers are being increasingly particular about where and how they spend their money.”

With functions all competing for limited investment budgets, improving direct line of sight to the value CX brings will be key, O’Reilly said.  

“The question will be asked: What value is CX delivering to our business growth, and how are you also contributing to bottom line through optimisation? Linking CX value to the broader organisational objectives around cost management with a clear focus and programs that drive down customer acquisition costs and reduce customer churn through loyalty is one way we see clients addressing this ask,” she said.   

“We also see some clients optimising the functionality in their current systems and platforms, linking data sets to improve insights, and shifting ways of working to deliver more value, more quickly with the same costs. There is no silver bullet, but the consistent focus on aligning CX objectives to business objectives and measuring results relentlessly to show impact, is a step in the right direction.” 
 

Disconnected definitions of CX

Broader structural and operational challenges remain persistent even outside of immediate economic imperatives. Overwhelmingly, marketing, CX and digital leaders pointed to process complexity as an all-too familiar barrier hindering CX uplift, with instances of teams working in silos and differing perceptions of what ‘good’ experience is. Most attendees had a story of functional silos that crippled strategic CX plans from being realised. All agreed: More simplification plus a consistency in how functions perceive, discuss and action CX initiatives against organisation-wide outcomes is crucial.

One B2B manufacturing CMO said its customers appear happy when viewed through one lens, such as the group’s +70 Net Promoter Scores. Yet those same customers have to take pictures of stock that’s then manually entered by sales reps for ordering – a clunky process for both sides.

“My job is to show teams the way forward and how things can be automated and improved for everyone’s benefit,” the group marketing chief said.

Of course, legacy tech doesn’t help. “Legacy tech can’t support the types of personalised, instant experiences today’s consumers expect,” O’Reilly said.

“Without the technology and innovation to understand not just broad personas, but individual habits of your customers, experiences aren’t meeting their expectations. But often, we see organisations unsure of what new technologies to invest in, how to navigate organisational and regulatory requirements to do so, and how to keep pace with ever-changing tech.”

Strategic technology investment, along with a shift in language from ‘student’ to ‘customer’ has been a game-changer at the University of NSW, its executive director, marketing and digital experience, Sofia Lloyd-Jones said. From a long list of systems and tech projects delivered in silos, it’s starting to shift to a transformation mindset.

“We are thinking about scalability with a digital infrastructure masterplan – much like we used to have a campus masterplan,” Lloyd-Jones explained. “Over the last 18 months, we’ve involved students to shape a connected vision for student experience, with a focus on delivering more personalised experiences.”

Another unlock of CX potential came through shifting focus to changing customer needs, and delivering against future lifelong learning opportunities. In practical terms, this is seeing UNSW better nurture student advocacy and harness alumni loyalty to earn repeat purchases and customer referrals. 

“Having strategic alignment on this at leadership level is game changing, and it is helping to unlock investment in the technology stack,” Lloyd-Jones said. “We have had our marketing platform for a while, but now we are doubling down on this investment with a CDP to give us a holistic view of students because this is critical for delivery.”

Investment in a new master data management platform is underway now. “This will serve as our student golden record across all touchpoints,” Lloyd-Jones said. “These investments will not only help us realise efficiency gains and deliver a more seamless and connected student experience today, they are also critical foundations for us to deliver against the lifelong learning opportunity.”
 

Identifying value pools

When defining a future state for CX, the Avanade team encouraged leaders to look at business value pools they can align to their CX strategy.

One example could be creating resilient experiences that drive loyalty by embedding speed and ability into customer operations. Another could be turning on functionality within platforms to improve content management, and customer data and insights for personalisation. A third is leveraging each touchpoint to deliver moments that matter and a deeper connection with the brand.

O’Reilly, like the brands represented at the roundtable, recognised putting customers at the centre of decision making as the ultimate shift. This is what’s been happening at one large Australian health product manufacturer, whose director of marketing shared efforts to realign around consumer needs unlocking buy-in for change. Audience-specific teams, along with better leveraging in-house digital, CX and data teams, are ways it’s now working to realise these plans.

“Taking all of that knowledge we have in healthcare and putting it towards improving things for the consumer is super exciting and gives us an ability to do some really cool stuff,” the marketing director said – even in the highly regulated world of healthcare.

One of the best ways to align an organisation is sharing the same metrics mapped to outcomes. Yet again, this is commonly where organisations see disconnect. While NPS came up as a business-wide measure recognised as a way of gauging customer satisfaction, most agreed to its limits in application.

“Naturally, we want our students to feel satisfied along the way, but there are limitations of just focusing on NPS at micro-moments in the relationship,” Lloyd-Jones said. “While measuring our student sense of belonging and connection is important for student wellbeing and academic success, measuring our strong graduate employment outcomes is ultimately more important for undergraduates. Strategically, we are shifting towards measuring customer lifetime value, because with a future orientation towards lifelong learning, repeat purchase and customer referral is the ultimate CX indicator we are delivering against customer expectations over the long term.”

O’Reilly cited a broad spectrum of metrics in use, ranging from CSAT/NPS, customer churn and retention, and customer lifetime value, to more service focused metrics such as cost-to-serve, first response time, and average resolution time.

“CSAT is widely embraced for its ease of implementation and practicality. However, taking a holistic view across revenue-based metrics coupled with customer loyalty and satisfaction metrics will help baseline CX programs effectiveness and provide areas for improvements,” O’Reilly said.

Avanade also advocates organisations better integrate customer experience (CX) and employee experience (EX) strategies to ensure seamless interactions across channels, devices and touchpoints.

“We’re seeing companies drive toward with goals of increasing customer satisfaction, boosting retention of both customers and employees by investing in multi-experience technologies, and transforming their business models to support all of this,” O’Reilly continued. “Organisations are seeking to connect their customers, drive relationship commerce to maximise sales while building brand equity, and create resilient experiences that adapt to shifting customer behaviours and market conditions.” 

At The Iconic, CMO Joanna Robinson, cited her CEO’s efforts to de-silo the organisation through OKRs aligned to a specific list of key priorities for the overall business.

“This is so a more holistic view can be taken driving better end-to-end experiences and growth for the business,” she said. As CMO meanwhile, Robinson’s emphasis is on shifting perceptions of marketing from service provider to growth driver by building better back-end internal processes, and collaboratively working on new ways of doing things.

All this requires future use cases to corral people and get them excited, Robinson said. ”Our brand campaign was the first example; and the next is the soon-to-launch loyalty program. You have to get people excited about the future.”

Over at an Australian health service provider group, its outgoing joint COO/CMO told attendees about efforts to introduce centralised CX at the frontline to lift performance in an industry not known for experience delivery. A critical step was scoring wins to build trust cross-functionally, the executive said. A centralised changed program aligned to tracking of service delivery with marketing efforts was key here. By taking over rebooking communications for patients in the call centre, the business went from a 6 per cent conversion rate to over 50 per cent.

Bringing AI to the CX table

With artificial intelligence (AI) quickly bringing new capabilities and tools, there’s no doubt in Avanade’s mind it’s going to facilitate advancement of organisations’ CX and personalisation goals. Examples could include optimising content supply chains, or reducing the time to pinpoint existing and potential points of friction using data and insights.

“The key to unlocking your CX through AI is having the right data platform in place – this is how you access the rich insights that will feed your actions, enabling hyper-personalisation and nurturing of next-best action,” O’Reilly advised.

An example Avanade is already seeing is using GenAI to pilot and prove value in optimising customer servicing and support initially in specific channels such as web or the contact centre.

Other attendees cited in-house teams at work understanding the AI opportunity, although several caveated this with the need to shift mindsets from cost efficiency gains towards improvements in employee experiences that led to better customer outcomes.

At the healthcare manufacturer, AI is trawling the knowledge database to serve up useful information to consumers via its website – an example of building value creation, the company’s marketing leader said. It’s early days on AI for UNSW, but the organisation is ‘leaning in’ to the AI opportunity and has established AI governance across the institution.

“We have specialist academic researchers in the field, and our education experts are exploring how AI can be embedded for teaching and learning, while maintaining academic integrity. And, like many organisations, we are also investigating ways that AI can improve operational efficiencies and enable our staff to focus on more added-value interactions with customers,” Lloyd-Jones said. “In the marketing and digital experience domain, we are utilising AI to build a scalable lead scoring model and the team is eager to explore how we can leverage new AI tools to support personalise content at scale.”