10 Customer Experience Challenges to Overcome

Alex Chan | Content Strategist | March 4, 2024

10 Customer Experience Challenges to Overcome

Companies that view customer service as a source of value rather than a cost to their business see measurably higher revenue growth. Customer loyalty and retention increases when people have a quality experience during each interaction with your company. For all industries, though, there are common roadblocks that keep businesses from providing a great customer experience. Some roadblocks are due to poor strategy or a weak commitment to customer experience, but many are due to data and technology shortfalls that make it difficult to fully understand customers and deliver the services and performance they want. Using customer experience as a lens to assess your existing technology strategy and infrastructure could lead you to shift priorities and invest more in customer-facing experiences and the data that supports them.

What Is Customer Experience?

Customer experience (CX) encompasses everything a business does to serve its customers’ needs. The term refers to how a business engages with customers at every point from the initial information the would-be buyer receives to the point of purchase to ongoing service and support. It’s the totality of all interactions the customer has with your brand, whether they’re seeing an advertisement, visiting your website or store, or using your product. Customer experience includes direct actions and your customers’ perceptions of each touchpoint they encounter with your brand.

Given how information-dependent business processes are today, technology plays a critical role in delivering a superior customer experience. Consider a grocery store chain adding a DoorDash delivery option based on customer demand. That retail team needs computing infrastructure and an integration platform that can quickly connect the necessary systems and help the team deliver and monitor performance. Alternatively, consider an automotive parts supplier that wants to give its automaker customers more visibility into production and delivery schedules. That supplier needs a technology platform that can connect all the applications and systems needed to deliver the relevant information for the desired customer experience.

10 Customer Experience Challenges and How to Overcome Them

From lack of personalization to outdated technology, there are a multitude of challenges that businesses must overcome to provide a top-tier customer experience. Some of these challenges will require new technology to address, while others will call for collaboration across numerous teams within your organization.

Here are 10 of the most common challenges organizations face with customer experience and how to address them:

1. Failing to identify and prioritize CX opportunities

Finding opportunities to improve customer experience can be challenging when business leaders are preoccupied with day-to-day tasks and competing stakeholder priorities. Discovering the root causes of problems and understanding customer needs takes time and concentrated effort. Even when such issues have been identified, leaders still have to prioritize which opportunities to act on and invest the necessary resources to improve. In addition, to deliver a new customer service—or enhance existing offerings—businesses may need to pull information from multiple sources and departments, or leverage third-party services and information.

Solution: To rally your organization around improving customer experience, you first need a customer experience strategy. This strategy can provide the necessary focus and incentives for team members to create, implement, and maintain a quality experience for the customer. Start by gathering customer data that can offer meaningful insights and shed light on poor experiences. For example, you might look at abandoned ecommerce shopping carts, hang-up rates on your customer service line, or product return rates and warranty claims. Use this data to quantify the impact of these substandard customer experiences on your business goals, including the effect on your most valuable customers. This will enable you to create initiatives with both customer and operational benefits in mind. Finally, measure the impact of customer behavior on KPIs, including new customer acquisition, customer satisfaction, retention, and revenue.

2. Lack of customer experience feedback

Gathering and reviewing customer feedback gives your organization the insights you need to gauge how satisfied customers are with your products, services, and interactions with them. Without customer experience feedback, your business loses the opportunity to improve products and services, track and respond to dips in customer satisfaction, boost customer retention rates, and collect valuable data that could inform your team’s business decisions.

Solution: To start, decide what outcomes you hope to achieve by collecting customer feedback. You can define these goals by considering what parts of the customer experience you want to improve, what channels you can use to gather feedback, and what plans or actionable change you can make based on that feedback. Once you have determined these, you can run a customer survey with questions that relate to your defined goals. Many use the classic Net Promoter Score approach, asking “on a scale of 1 to 10, how likely are you to recommend us to a friend or colleague?” To increase the likelihood of customer participation in these surveys, consider setting expectations for when they will hear back from you after completing the survey and following up with personalized responses to customers who engage.

3. Outdated or insufficient technology

Outdated or insufficient technology can cause customer experience problems on two fronts: poor execution and poor analysis. On the analysis front, without the right technologies to gather and make sense of data from multiple sources, your team will have to conduct manual analysis or make assumptions when trying to solve problems. This process of manually investigating and analyzing data can take weeks, while the proper integration and data management technologies can complete the task in a few hours.

In terms of execution, running a customer-facing technology environment today generally means connecting and using multiple applications that run in the cloud and on-premises. Modern applications also tend to rely on event-driven processing, an architecture that allows for automated actions whenever an event occurs, such as an ecommerce purchase, a question posed to a chatbot, or a login by a loyalty club member. Without this kind of automated responsiveness, a website likely can’t respond quickly enough, and with consistent correctness, to meet consumer expectations.

Solution: To improve customer experience, invest in the right tools to gather and analyze data that will help you understand your customers’ needs. For example, when a leading global professional services firm needed more insights from its client feedback surveys to improve its products and services, the company chose a cloud platform with services for large-scale data processing. After implementation, the company was able to rapidly extract data-driven insights, identify the top priorities of customers, and monitor customer sentiment. Track customer data through a centralized tool so you can gain a unified view of the customer experience. Invest in enterprise integration tools that provide prebuilt connections across common applications, and that let you build new integrations without extensive coding. Use embedded analytics to make the right data available, with context, on applications or websites, following the flow of employees’ or customers’ actions to facilitate on-the-spot decision-making. Make sure you can track and understand the performance of customer-facing systems so you see the experience the way your customers do.

4. Unclear goals and metrics

Without clearly defined customer experience goals and metrics, your organization will lack the commitment and focus needed to maintain and improve each touchpoint with your customers. Day-to-day pressures can lead your business to cut corners in ways that hurt the larger customer experience, but establishing clear goals and concrete metrics can help keep customer commitment top of mind. Customer experience metrics help measure customer satisfaction, flagging areas where your business can improve to increase customer retention and loyalty.

Solution: First, you must identify which metrics are most relevant to a great customer experience and which are most critical to business results. Relevant metrics could include website response time, call center hold time, product returns, warranty claims, Net Promoter Score, customer lifetime value, or customer churn rate. These metrics will help you assess whether you’re improving the customer experience, and whether those improvements translate into increased revenue growth, customer retention, or progress toward other business goals at your company. A software platform with customer journey analytics can help you calculate CX metrics and target your most profitable customer segments for growth opportunities. Additionally, a system that lets you create dashboards for timely tracking and reporting of these metrics can give your organization a truly customer-centric view of your operations.

5. Lack of personalization

Poor personalization in the customer experience can result in higher customer churn. A 2021 McKinsey & Company study revealed that customers place a high value on personalization, with 72% saying they expect the businesses they buy from to recognize them as individuals and know their interests. However, providing a personalized experience for each customer poses a significant challenge. You first need to facilitate customer interaction on all the channels a customer prefers—be it text, phone, web, chatbot, or in person. Then you need to pull together all the relevant data from across the organization to inform each interaction with personalized information.

Solution: Consider implementing more personalized marketing and support initiatives by segmenting customers into different categories. Use product analytics to create experiences that fit their preferences, give them each specific product experiences, and update these personalization strategies regularly. Investing in this level of personalization can pay off. For example, when a US energy company wanted to better understand the customer journey and pain points, they employed a suite of cloud-based tools for customer relationship management to deliver more personalized customer service interactions. As a result, the company saw an increase of more than 30% in online completion rates for its new services feature and a reduction of more than 10% in customer calls.

6. Data and organizational silos

To tackle many of the previous challenges—such as identifying CX opportunities and personalizing experiences—you need to break down the data silos that hinder communication and warp your organization’s view of the customer. Organizational silos can result in inconsistent or competing objectives among your teams, as well as inconsistent brand experiences for the customer. Data silos, where relevant information isn’t properly unified, can leave your organization with an incomplete picture of the end-to-end customer experience. By connecting all the relevant data about your customers from myriad sources throughout your business, you can gain more accurate and meaningful insights.

Solution: To combat organizational silos, ensure that your organization has a shared vision for the customer experience by bringing key groups together on that vision. Build cross-functional teams that regularly review the customer journey and share customer research. Establish a shared understanding across your teams about how your business wants the customer to experience your product or service so each team can collectively work toward that goal. Finally, connect customer data from departments such as sales and marketing so they have a consistent and complete picture of the customer experience. To prevent data silos, meanwhile, implement a reliable data management and integration solution that can consolidate data accurately and effectively for faster decision-making across your business, simpler operations, and smoother customer interactions. For example, when a US technology company sought a unified software system that could automate and cleanse financial data coming from high volumes of monthly transactions, the company deployed a cloud platform to create a simple, secure invoice consolidation process to manage those transactions.

7. Business objective misalignment

When your customer experience strategy isn’t aligned with your broader business objectives, you’ll likely end up chasing initiatives that don’t deliver for the company—and don’t get buy-in from executives and other stakeholders. For example, if your customer experience efforts call for greater investment in new customer growth, but your business is focused on cost-cutting and lifetime customer value, that misalignment can result in wasted time, money, and resources.

Solution: Companies that treat customer service as a source of value, not just a cost, see 3.5 times more revenue growth, according to Accenture. Even so, getting executive buy-in for your CX initiatives takes careful consideration—and a lot of data. To start, identify the key decision-makers in your business and make it a priority to regularly engage and communicate with them about your initiatives. Lead with the metrics you’ll use to measure these objectives and outcomes—they’ll take notice if those metrics don’t match their goals. Pull data from multiple sources and use dashboards to track and share the progress toward your objectives and their impact on your business as a whole, providing stakeholders with a chance to redirect these efforts if they’re off target. Once you’re able to draw meaningful insights from your data, you can share these results with your stakeholders and determine how to act on these findings.

8. Inability to seize customer experience opportunities quickly

Let’s say you identify a big customer experience opportunity that could advance a key business objective. Can you execute quickly enough to be relevant in the market? The answer partly depends on that commitment to customer experience that we mentioned earlier, which plays a vital role in aligning different organizations and stakeholders behind a big idea. But it also depends on your technology. Some companies can take months to connect the necessary applications and data sources needed to support a new initiative—and, if all goes well, to add the scalable computing capacity to meet potential customer interest. Or, if new technology such as AI tools come into play, their computing infrastructure may be too rigid and heavily customized to allow for quick additions and new capabilities.

Solution: Opt for a flexible technology infrastructure capable of connecting all the applications, data, and organizations needed to drive innovative, personalized, and data-driven customer experience efforts. Get comfortable with the hybrid and multicloud environments that will inevitably be required to support new customer-facing experiences.

9. Customer churn

Customer churn—the percentage of customers who stop using your products in a given period—has impacts that go far beyond the immediate loss of revenue. Losing a customer also means the loss of potential recurring business, a lost opportunity for referrals, and loss of resources as more money must be directed to acquiring new customers. Understanding the forces driving churn is essential, but customer churn can have many causes, including poor service, low product value, and a frustrating user experience.

Solution: Commit to reaching out to customers regularly so you can identify dips in satisfaction early. Monitor factors that suggest lagging engagement, such as logins, foot traffic, or social media mentions. Through these means, you can tap into customer conversations that offer key insights for your business while establishing a feedback loop do drive continual improvement. Use analytics to identify patterns in customer churn to further understand why certain customers are leaving your business.

10. Overlooking employee experience and engagement

Entrepreneur Richard Branson is credited with saying, “clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.” It’s ultimately your employees who deliver your customer experience, so it’s important to prioritize employee experience and engagement. In fact, Gallup found that businesses with top-quartile employee engagements had 10% higher customer loyalty and engagement rates than bottom-quartile business units, according to a study updated in 2023. To achieve your company’s customer experience goals, your employees need the right training and the motivation that comes from expanding their knowledge and seeing their efforts rewarded.

Solution: To promote employee development that will lead to better customer experiences, turn to technologies that can track employee touchpoints and provide one centralized place to manage employee data. With this information, you’ll be better able to create personalized guidance for employee development, advancement, and retention. You should also consider soliciting employee input through surveys and direct conversations to gain a clearer understanding of their expectations, satisfaction levels, career goals, and what they like and dislike about their work. Your HR department can also establish an employee Net Promoter Score (eNPS) process to periodically ask employees how likely they are to recommend their employers to others.

Deliver Improved Customer Experiences with Oracle

Oracle offers a complete cloud services platform that can run, manage, and connect the data and applications your business needs to enhance the customer experience. Oracle Cloud Infrastructure (OCI) lets you run a range of applications—quickly and securely—that support your customer experience. OCI’s distributed cloud approach lets you run cloud services in whatever model works best for you, including multicloud and hybrid environments. Within OCI integration services, Oracle Integration can help your developers quickly extend and connect applications, services, and data sources. As a cloud-based enterprise integration and automation platform, Oracle Integration provides hundreds of prebuilt application, data, and partner integrations with a low-code developer experience that can help you deliver projects faster and with less code, while simplifying operations.

Customer Experience Challenges FAQs

What is the biggest challenge in customer service?
Anticipating what the customer expects is the biggest challenge in customer service. To understand their expectations, you need to know who your customers are based on your internal data, third-party information, surveys, direct communications with your business and on social media platforms, and other methods of gathering customer sentiments.

What are the 5 components of customer experience?
Think about customer experience as what a customer does and feels at each step of the five-part customer lifecycle. The customer lifecycle includes reach, acquisition, conversion, retention, and loyalty, as defined by marketing analysts Matt Cutler and Jim Sterne in their classic paper “E-Metrics.”

What is a challenge of customer experience for a customer service center?
Not understanding the individual customer’s needs and therefore not meeting their expectations is a big challenge for customer service centers.

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