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New Research: Charting Digital Experience in Manufacturing and Distribution
Nov 30, 2023 • 6 Minute Read • Laura Bernier, Customer & Cultural Intelligence Lead
Even if your company has stood the test of time for decades or even centuries, the current decade is no exception to the winds of change. In today's digital business environment, companies must continually evaluate their customer experience (CX) and operational practices. Neglecting tech evolution and customer expectations can harm a company's competitiveness, profitability, and reputation. Embracing new technology and meeting digital expectations necessitates change, and it comes with its unique set of challenges.
We're sharing insights from our 2023 proprietary research conducted by Vanson Bourne. In this study, we focused on empowering digital customer experiences (DCX) and optimizing marketing, technology, and operations. As seasoned digital strategists and technology experts, we dive into results from the manufacturing and distributor sectors. We report on leaders at the helm of DCX and marketing initiatives and reveal perceptions, investments, focus areas, and opportunities.
The Need for Improvement in Manufacturing & Distribution
We found that 94% of CX decision-makers in manufacturing and distribution believe their organization would benefit from enhancing the overall DCX, particularly from improving CX strategy and data collection and analysis. And that's not all. Our research also shows that manufacturers and distributors are up against some tech challenges, namely lacking technology that does what their organization wants it to do (e.g., implement personalization). Additionally, they're missing integration/consolidated lead and customer data and experiencing a lack of skills or resources in the current workforce.
Combine these tech challenges with outside variables such as fears of AI making jobs obsolete, uncertain economic forces, unstable supply chains, operational inefficiencies, and product innovation slowdowns, and it's a perfect storm of complicated and competing priorities.
Taking a closer look at their DCX, these leaders have high aspirations of optimizing their digital strategies. Notably, 42% have a strategy that's fully defined, implemented, and optimized across the entire business. Additionally, 86% think their DCX is crucially or very important to their company's success. Yet there's still a pressing need for improvements.
Exploring Improvement Areas for Digital Customer Experience in Manufacturing & Distribution
With less than half of organizations having a fully optimized DCX strategy, there's a growing need to examine specific areas to remain competitive.
Many manufacturers and distributors focus on enhancing customer engagement, leveraging third-party data, investing in emerging tech (e.g., artificial intelligence), personalizing content, addressing skills and resource gaps, and streamlining content production.
1. Enhancing Customer Engagement
Today, manufacturers and distributors recognize the critical importance of elevating customer engagement. In fact, 43% of industry leaders have identified it as a top digital marketing priority. To capitalize on this trend, businesses can drive innovation by tailoring their sales process through personalized content, interactive experiences, and enhanced communication channels. This could include consistent omnichannel marketing, multi-channel customer support, and personalized email marketing). This approach can be vital to resonating with customers on their journey and enhancing relationships.
For example, distribution can implement a proactive customer engagement program, offering live webinars and online training sessions to educate customers on how to select the right product or maximize the use of a product.
Similarly, manufacturers can organize virtual product demonstrations or factory tours that showcase their solutions and quality control processes. These tactics provide access to in-depth information, improving buyers' knowledge while fostering a sense of community among customers and increasing loyalty and trust.
Additionally, creating online tools or product configurators allows customers to customize solutions based on specific needs. This tool personalizes the sales experience and helps customers find the right product for their unique needs, leading to higher engagement.
2. Personalizing the Sales & Customer Experience
Our survey underscores the significance of personalization, with a staggering 90% of respondents agreeing it's a top focus for their organization. But how does personalization fit into a complex industry? The answer lies in addressing challenges related to scaling personalized experiences, resource limitations, change management, and the availability of data.
For example, our findings show:
- 48% lack in-house expertise for effective personalization,
- 42% lack the ability to provide personalized content at scale,
- 36% struggle with high translation costs and,
- 34% face complexities in personalizing across multiple channels and touchpoints, among other challenges.
However, despite these challenges, implementing personalization offers compelling benefits, including enhanced customer engagement, increased customer loyalty, and improved conversion rates.
Many forward-thinking companies are steadily overcoming these hurdles by meticulously planning their personalization strategies, ensuring they align with customer preferences and adhere to industry regulations. In the next one to two years, channel performance, consistent cross-channel experiences, and content strategy are priorities in personalizing the customer journey not far behind.
- 52% will focus on improving the consistency of cross-channel experiences.
- 48% aim to boost their communication channels' performance across email, chatbots, social, etc.
- 46% will aim to improve overall content strategy.
- 42% are personalizing the customer journey, among other areas.
The impact of personalization is evident, with 40% of organizations embracing it reporting a substantial return on investment. Interestingly, while 60% have seen only slight ROI, the universal trend is that all organizations, at 100%, are realizing returns.
To get started, consider tackling one area at a time. For instance, introduce a recommendation engine on your website that tracks customers' past purchases and browsing behavior, offering personalized product suggestions. This strategy not only increases the potential for cross-selling but also elevates customer satisfaction.
Want more? Develop Your Personalization Strategy: 9 Steps on the Path to Personalization.
3. Creating Data-Driven Experiences
The key to delivering personalized customer experiences lies in harnessing data for targeting and retargeting. Data also plays a pivotal role across the marketing and sales process:
- 54% leverage it for personalized digital advertising,
- 50% employ it for audience segmentation,
- 44% use it to inform technology selection,
- 40% utilize it for customizing web and mobile experiences, and
- 30% rely on it to shape their overall strategy.
Additionally, industry leaders are actively exploring strategic partnerships and technologies to enhance data acquisition and analysis. An astonishing 90% of these leaders firmly believe that customer data and insights represent the most significant opportunities for driving digital revenue growth.
The industry shows confidence in its capabilities for utilizing first-party data despite the potential scarcity of third-party data in the future. While only 37% currently invest in first-party data solutions, over 96% believe in their capability to pivot to first-party data for marketing. They express confidence in possessing both the team skills and technology needed for acquiring and deriving insights from first-party data.
4. Embracing AI and Machine Learning
Staying abreast of evolving business growth strategies can be challenging, often met with employee hesitation and logistical constraints. But that's no reason to fall behind on the latest emerging AI and machine learning trends, even if it's starting with a boost to your website's chatbot. AI and machine learning can address resource gaps, scale content development, and personalization, and manage diverse communication channels.
For example, implementing an AI-powered chatbot on your website can swiftly address common customer inquiries. These chatbots use natural language processing to understand and respond quickly to customer queries. Implementing AI chatbots reduces the need for human support agents and improves response times.
AI and machine learning integration can offer invaluable solutions. Over the past three years, 42% have invested in AI and machine learning technology, with 62% leveraging it for digital advertising, 38% for content moderation, and 34% for website chat functions.
Do you envision your organization integrating ChatGPT or a similar solution?
A resounding 74% are considering it. Among them, 64% aim to enhance global reach through language translations, 60% seek to elevate customer support, and 36% plan to scale content development across websites, email, images, and more.
Charting the Path Forward
We can't stress enough the significance of embracing digital transformation in manufacturing and distribution. With 94% of CX decision-makers acknowledging the need for an improved DCX, it's clear that this endeavor comes with its complexities and challenges.
Our research underscores the potential for improvement and opportunities to overcome these obstacles, including enhancing customer engagement, personalizing experiences, leveraging data-driven strategies, and embracing AI and machine learning. Many companies invest heavily in these areas to improve customer experiences and increase digital revenue.
For more information on how to redefine or fine-tune your digital customer experience and streamline operations, get in touch with us.
This survey draws upon data from Verndale's 2023 proprietary survey conducted in partnership with Vanson Bourne. Curious about more insights in DCX? Explore our comprehensive findings in the 2023 Trends Report: Digital Customer Experience.