abandoned shopping cart in an empty parking garage
PHOTO: Xavi Cabrera

Data is an organization’s lifeblood, and that is especially true in the midst of the COVID-19 pandemic. The reason is simple: it is vital for every organization to have a clear and true picture of their customers, partners and suppliers in order to survive and eventually thrive.

Toward that end, many organizations are putting new or renewed focus on digital transformation to help in their efforts to better engage customers. That, in turn, is motivating investments in data management and advanced data analytics tools.

“I think the most important element is a data platform and strategy that integrates all of the organization's first-party data into a comprehensive view of who their customers are, what their engagement actually looks like, and the value that they bring to the business,” said JD Norman, a senior manager at Deloitte. “Absent this, an organization is not able to know if their efforts to attract, engage and keep customers are effective and they aren’t able to prioritize where — and who — they should or should not be investing in based on a customer’s value and contribution to the business.”

It may be tempting to think that in the midst of widespread lockdowns and work-from-advisories, most organizations would be investing top dollar in physical changes to the workplace, such as HVAC updates, plexiglas sheeting and safety signage. But the experts we spoke to say the lion’s share of dollars are going to technology investments, ones that better enable remote workers to communicate and collaborate, and tools that better help customers buy and interact virtually with the company.

"I believe that funds are definitely being redirected because there is no new budget available for the customer engagement needs that are newly emerged — or become higher priority — as a result of the pandemic," Norman continued. "That said, much of how this actually plays out is based on the industry, category or sector a company operates in."

For example, Norman said, “a CPG company that relies on mall-based specialty stores will absolutely invest more in building out a DTC channel including ecommerce, consumer opt-in programs to get customer data and contact info, and CRM, at the expense of driving foot traffic and in-store activity. A hospitality/lodging brand might put reinvest advertising funds into customer segmentation and loyalty programs. A healthcare provider will pull back service line advertising and invest in content, social media, and partnerships to help build brand advocacy around health and wellness over procedures.”

Data Analytics Helps Drive Renewed Customer Engagement Focus

Also seeing investments go increasingly toward data analytics tools and digital transformation efforts, and away from physical space requirements, is Nadia Conti, director of customer insights, strategy and engagement at Vera Bradley.

Conti believes that the most important element of a customer engagement strategy is the ability to understand mass amounts of rich customer and purchase data through a data science team’s perspective.

Conti is focused on the retail customer, and said that industry is reallocating dollars that would normally be set aside for in-person stores to redirecting customers to an online store, including more digital media spend.

Related Article: What to Do When Budget Cuts Hit Your Customer Experience Program

Artificial Intelligence Finds Greater Role With Consumers

Another area of technology that may get a boost from the pandemic is artificial intelligence.

“While not short-term, we may see a faster adoption trajectory for AI-driven, software-based products that can help companies deliver digital, personalized experiences for customers,” said Jennifer Wise, a principal analyst of experience design at Forrester Research. “For example, embedding an augmented reality experience into apps allows customers to virtually sample a new lipstick color. Other sensor-rich, contactless technologies like smart mirrors that advise on what product to buy instead of the in-store employee.”

“For the digital-only retail shopper, advanced features like AR can help shoppers make decisions with confidence without the store visit,” Wise said.

Countering new investments in technology are in many cases a decline in spending on human capital, Norman believes.

“The … thing being sacrificed by firms — brands, vendors, partners, etc. — is people, which I think will have a more negative, long-term effect than most anything else,” Norman said. “Companies are not just losing competencies with staff cuts, they’re losing valuable, resident knowledge, experience, relationships, etc., that will take time, efforts and investments to find, rebuild and/or replace.”

Related Article: Agile Marketing Your Way Through the Next Recession

Must-Have Investments in Customer Experience Today

So what elements of customer engagement programs are organizations continuing to fund as must-haves?

“Must-haves include: omnichannel journey strategy; ecommerce; loyalty programs; CRM; customer service; CDP and/or some enterprise single view of the customer program,” Norman explained. “For most brands and businesses, there is also a need to get the mobile house in order — that is, a real mobile strategy and capability versus a responsive website.”

As to what elements are finding new favor as a result of the pandemic, "I believe that a lot of this depends on the industry and the specific company and the respective level of sophistication, innovation, and comfort with ambiguity and the unknown," Norman continued. "But, in general, elements that I believe are finding new (or new-found, or renewed) favor include: content (brand/idea-driven work that is branded, unbranded, video, social, mobile, etc.); brand strategy (messaging, positioning, UVP, etc.); and taking ecommerce from check-box to compelling experience."