Zendesk Study Finds Customer Experience Maturity Leads To Business Resilience, Revenue Growth And Agent Retention
Singapore’s midsized and enterprise companies lag behind their regional counterparts in making the right CX investments to reap maximum benefits
According to new research released today by Zendesk, Inc in partnership with Enterprise Strategy Group (ESG), companies in the Asia Pacific (APAC) that have continued to invest in their customer experience (CX) over the past year are 10.3 times more likely to have maximized their resiliency during the pandemic, and 4.7 times more likely to have grown their customer base in the past six months. However, The 2021 State of CX Maturity Report also found that only 21% of midsized and enterprise companies in Singapore feel they have made the right CX investments to increase business resiliency, trailing behind other markets such as Australia (28%), South Korea (28%) and India (64%).
“Organizations across industries, sizes and life cycles are realizing that the customer service function is no longer a cost centre, but a revenue driver and our research with ESG confirms this. In fact, it also found that the connection between CX maturity and greater business growth and revenue remains most pronounced in APAC a year on,” said Wendy Johnstone, Chief Operating Officer, APAC, Zendesk “Today’s digital-first economy has made the customer service function the hub of all customer relationships, which is why continuous innovation and investment in CX must be a business imperative for long term success and growth.”
The report surveyed more than 3,400 CX decision-makers globally - of which 921 were from APAC - to understand the characteristics and benefits of CX leadership. ESG built a CX maturity scale to identify common patterns and behaviours that separate high-maturity CX organizations - what ESG calls the “Champions” - from three levels of less-mature ones: “Starters”, “Emerging”, and “Risers”. The report outlines what businesses need to do to move up the maturity scale.
The research found that the number of Champions within midsized and enterprise companies in APAC has increased from 6% to 8% since 2020, with India (16%), Australia (12%) and Singapore (9%) having the highest proportion of Champions. The greatest gains in the region were tied between India, Australia and Singapore, which all saw a 6 percentage point increase from 2020. However, Singapore experienced the fastest growth, increasing the percentage of Champions by three times in the past year, up from just 3% in the past year.
“The findings indicate that the shift to digital and remote work during the pandemic served as a trigger for companies to accelerate their adoption of new technologies, policies and processes to benefit from a higher CX Maturity,” added Adam DeMattia, Director of Custom Research at ESG. “Across APAC, Champions recognize that service excellence can be a differentiator, and are actually accelerating investment in CX projects.”
There also continues to be a clear correlation between improved CX maturity and the benefits of increased customer satisfaction (CSAT), faster response times, and effective customer service. Notably, the study also calls out the connection between CX maturity and greater business growth and revenue.
- This connection is most pronounced in APAC, with midsized and enterprise Champions from the region 4.7 times more likely than Starters to have grown their customer base over the past six months, and 10 times more likely to have increased per-customer spend significantly over the same time period. More than one-quarter of midsized and enterprise companies in Singapore have managed to grow their customer base, while one in three has increased per-customer spend in the past six months.
- Champions are also changing how the customer service function is viewed across their organization. With digital interaction being the main connection point with many customers, Champions in APAC are three times more likely than Starters to operate profitable service teams, where direct revenue exceeds the cost of customer service. Half of the midsized and enterprise Singapore companies surveyed (50%) are already operating a profitable service team, only behind South Korea (58%) and India (84%).
- APAC Champions are also better positioned to adapt and thrive in the face of change, taking roughly half the time to grow their team by 50% and onboard new hires (22 days versus 43 days for Starters) and add a new channel (21 days versus 45 days for Starters).
Other key imperatives for CX Maturity that the research identified include:
APAC Champions most likely to see the game-changing impact with CX-led innovation as a competitive differentiator
The vast majority of respondents in APAC (90%) agree that CX innovation is required to protect their business from competitors. In Singapore alone, 42% of mid-sized and enterprise respondents strongly agree with this sentiment. They also see the value of data to help focus this innovation, with over half of respondents (56%) both in APAC and Singapore recognizing they could do more to use customer data to expand sales opportunities and business growth. Among the four levels of CX maturity, Champions are taking the lead in driving continuous innovation in their CX and using customer service data.
- APAC Champions are 7.4 times more likely than Starters to be using service data extensively.
- APAC Champions are 17.3 times more likely to identify the impact of data on sales success as “game-changing”, outstripping counterparts in North America (12.7 times) and Europe (9.4 times).
- APAC Champions are 2.8 times more likely than Starters to have accelerated major CX projects over the past year.
Investment in CX leads to better agent retention and productivity
Agent turnover, technology, flexibility and wellbeing all emerged as areas of investment and focus for teams over the course of the past 18 months. This led Champions, in particular, to move quickly to implement tools to support overwhelmed service teams.
- Investments and process changes made by APAC Champions in the early stages of the pandemic include increased utilization of public cloud services (66%); more flexible remote work policies (64%); expanded mental health/wellbeing initiatives (64%); more flexible working hours (60%); and the adoption of new collaboration tools (60%).
- Larger APAC businesses have also increased customer visibility in the past year, with 43% saying they have achieved a “single source of truth” when it comes to customer profiles compared to 25% a year ago.
- A closer look at APAC Champions found that they are 6 times and 9.4 times more likely to deliver excellent customer visibility and cross-channel visibility, respectively, to agents than Starters. In Singapore, only 29% of companies rate their customer visibility as very strong. Despite an increment of 11 percentage points from 2020, the number remains the lowest amongst its regional counterparts.
- APAC Champions are 4.3 times more likely to have excellent agent retention and 72% higher agent productivity than Starters. However, staffing turnover continues to be a challenge for more than one in three APAC organizations, up from 23% in 2020. Midsized and enterprise companies in Singapore performed better than the regional average, with only 18% of respondents viewing agent retention as a challenge.
- Champions in APAC are 10.3 times more likely to believe they made the right investment and policy decisions during the pandemic to maximize their resiliency. However, only 21% of midsized and enterprise Singapore companies surveyed feel that they have made the right CX investments to increase business resiliency.
- Champions in APAC also expect a 25% increase in the number of remote agents, even after the COVID-19 pandemic is no longer an issue.
Conversations, not transactions, create stronger customer relationships
Globally, Champions are three times more likely to prioritize delivering conversational customer experiences that can build deeper customer relationships. In APAC, Champions unanimously agree that pivoting to a more conversational experience with customers is a key goal for their teams - signalling the shift away from transactional service focused purely on resolving tickets.
- Organizations in APAC have increased the number of service channels year-over-year from an average of 7 to an average of 7.8.
- Many anticipate that preferences and changes will continue to shift as well: 73% of APAC organizations predict that chat and social channels will be most used by customers in the future, up from 54% who say this is the case today.
- Meanwhile, 57% of Singapore companies agree that chat and social channels are heavily used by customers today. This number is projected to increase to 72% in the next three years.
- For more information, download the report, The State of CX Maturity, here
- Read the blog content series on how businesses can achieve CX maturity here
Check out the virtual event, “CX Discoveries: Decoding Customer Service” here