2022 State of Customer Experience: Mid-Year Update

Customer experience optimization is no longer a new trend. It’s now broadly recognized by most analyst firms as the key to achieving sustainable growth and competitive advantage in an increasingly complex and volatile marketplace. We take a look at the first half of 2022 and thoughts on the second half.

The First Half of 2022

At the beginning of 2022, 87%  of companies indicated they would be investing more in improving customer experience (CX) as it is a top growth driver. But with CX being impacted by so many touchpoints in the customer journey, business leaders have been challenged with deciding where to focus first and how to develop a longer term roadmap. 

The pressure was on to demonstrate a return on investment (ROI) with ambitious growth targets despite increasing competition and a higher bar set for what consumers expect from online channels. The ability to identify the low hanging fruits and optimize towards those became critical. This drove significant growth for our team as companies across many industries sought a better solution to improve their CX.

We identified three focus areas where our clients have seen the most success with customer experience optimization so far in 2022. Despite each client having unique targets and desired outcomes - improving click through rates (CTR), increasing average order values (AOV), or growing conversion rates - each of these focal areas proved to be equally successful in driving positive outcomes.

The winning formula for CX optimization success: lots of ideas and experience

A key point to note is that the focal areas alone were not the only reason for success. Each company had a clearly defined strategy outlining their desired outcomes. There was a willingness to experiment with a broad range of ideas and openness to making changes that aligned with optimization best practice.

One of the most important lessons learned is that each learning from an optimization can be applied to increase the efficiency and success of future optimizations. Technology that is able to navigate the complexities of experimenting with multiple ideas and variables in different combinations is critical to implementing experience optimization successfully. Equally important is having a team experienced in optimization and user experience (UX) that can identify ideas and strategies most likely to have the biggest impact based on past learnings and industry best practices.

This makes implementation more efficient and speeds up the time to achieving desired outcomes. It’s a collaborative effort that when combined with key focal areas and a goal to improve customer experience makes those low hanging fruits more easily accessible.

The 3 best experience optimization takeaways for 2022

In experience optimization the ultimate goal is to get customers to engage at every touchpoint in the journey. Strategically the whole customer journey needs to be taken into consideration. But embarking on a whole website redesign or optimization can be overwhelming. This is why it’s recommended to start at the touchpoints that can have potentially the most impact. Such touchpoints include landing pages, product description pages (PDP), and checkout. We review how experience optimization is being applied in 2022 to achieve specific desired outcomes for companies.

1) Improving ROAS with dynamic landing page optimization

Digital ad spend continues to grow despite diminishing returns. Ever changing algorithms and increased competition in the digital ad space is making the need to improve the return on ad spend (ROAS) a key priority for companies.

A proven strategy is to create landing pages aligned to each targeted ads. This ensures that when visitors seek more information after clicking on an ad, it takes them to a page with relevant and contextual information. The problem is that if a unique landing page is required for each ad, keeping each one updated and optimized, quickly becomes unmanageable. This is where AI-driven experimentation and personalization can have a major impact.

Instead of having multiple landing pages, a single landing page is created which is dynamically personalized and optimized to align with each unique ad. This process happens autonomously and pulls together the learnings from how each unique visitor responds to ideas to identify the best experiences to serve to the next visitor. The outcomes achieved are higher click through rates and better customer engagement, which ultimately contribute to uplift in sign-ups or sales. This then tips the scales, improving return on ad spend (ROAS).

2) Reducing churn and shopping cart abandonment

Landing page optimization highlights the importance of the start of the customer journey, getting potential consumers interested, engaged, and moving down the funnel in the journey. But continued high shopping cart abandonment rates highlight that a good start isn’t always enough to get consumers to buy. Despite an increased focus on improving customer experience, cart abandonment rates remain between 59% and 79% depending on industry. 

This highlights the many complexities involved with reducing churn and shopping cart abandonment. High customer expectations mean that any small element of the journey can  cause friction and result in website visitors dropping off. The best way to identify points of friction is to track how live visitors navigate through the journey and how they respond to different ideas and experiences across all the channels and touchpoints. 

It’s easy to say that the checkout process should be simplified, this is a fundamental principle, but the issue comes down to defining simplified. Does it mean offering a singular experience or having fewer steps in the process? Leaving out important information such as shipping costs may lead customers to assume shipping is always free. If they’re then faced with additional shipping costs when ready to pay, chances are they’ll abandon the transaction. It’s rare for one single factor to cause cart abandonment. This is where having the ability to experiment with many different ideas, variations, and combinations is really valuable to identify experiences that deliver better outcomes. 

Some visitors may respond to simplified navigation, others may prefer seeing additional recommendations or combo deals. With increasing expectations of personalization, having the ability to serve unique and relevant experiences can make a real impact on getting visitors to successfully complete a transaction. 

The process is not just about generating more conversions, but rather creating experiences that delight customers and make it an easy decision to become a loyal customer and come back to purchase more. Continually learning through experimentation leads to a better understanding of consumer preferences and what’s influencing their decisions to buy.

3) Increasing renewals and customer retention

As it becomes increasingly harder to attract new customers due to increased competition, many companies are turning their attention to how to retain existing customers through renewals and loyalty programs. This requires data that helps companies better understand what’s important to their customers and how this changes over time. Including what influences a change in preferences and why customers choose one brand or product over another. 

One consumer trend that’s increasing in influence is sustainability. Buying decisions are being made according to the deliberate efforts companies are taking to reduce negative impacts on the planet. Understanding what hooks customers and finding the best way to communicate that a brand’s sustainability values align with their own requires the ability to serve unique  experiences. 

Similarly, a key principle of customer retention is finding ways to continually create more value for customers. This requires leveraging the right type of data to maintain better connections with customers and personalize experiences when renewals are due or repeat purchases take place. This goes beyond knowing a customer’s name or what they recently purchased to understanding why they’re searching for a particular product or service and what their level of engagement is in their current buying process. 

As these examples highlight, there are an infinite amount of variables that make or break a  decision to buy. With existing customers there’s the advantage of already having a connection and valuable first-party data. Combining that with AI-driven experimentation and  personalization can help generate digital experiences that engage customers and make the  decision to renew easy.

2022 CX trends takeaway

As the customer experience landscape continues to evolve, optimizing digital experiences  remains a high priority. Even with many consumers returning to shop in store, for most the customer experience starts online. A consumer may have searched  for product or pricing information, browsed reviews to validate their buying decision, or even identify options to buy online and then pickup in store or curbside. 

Advanced technologies have an important role to play in enabling brands to remain competitive and continually serve relevant experiences to customers. AI-driven experience optimization can help brands deliver more value to their customers while delivering on desired outcomes for the company. Experimentation and personalization are key elements to improving CX.