Microsoft Creates Blueprint For Successful Customer Experiences Backed By Data And AI

Start with the customer and work backward. This customer-first culture comes from study findings that Microsoft released Monday, which suggest that being innovative no longer means creativity, but rather having the data and the science to support the campaign.

“Agile startups like Uber, Lyft and Airbnb are all great examples of digital disrupters that are competing on the forefront of creativity,” said Julie Wymetalek, senior brand manager at Microsoft, during a presentation. 

“The journey isn’t linear,” she said.

Microsoft, in collaboration with advertising partner Perceptions, conducted the research to focuses on the customer experience. The findings aim to show how agencies and brand marketers use a combination of first- and third-party data to create a better customer experience by understanding the buying process and how marketers use data and artificial intelligence to improve marketing performance.

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The research provides insights on “high-CXQ performers” -- marketers who have mastered their understanding of the customer buying journey and how to improve marketing performance based on that understanding. Microsoft calls this Customer Experience Quotient (CXQ). It also applies to how companies view and apply AI technology.

The 80/20 rule applies here. Only 20% of the survey respondents qualified as High Performers. They also share many common attributes. Of the 20% who fall into the high-CXQ performer category, 20% are marketers and 17% are agencies. The remaining 80% struggle with one or more facets of the strategy.

Success is not limited by company size, budgets or industry vertical, according to the findings. About 20% of the high performers are made up of companies with less than 1,000 employees. About 72% are in the mid-market. There is also a large percentage of performance marketers -- about 45% -- that do well, but the study found that 55% of brand marketers also do well. Low performers were made up of about 45% of performance marketers and 56% of brand marketers

It does take the correct talents, prioritization of resources, and the correct application of data and technology to succeed. 

The findings also suggest when marketers create a customer experience it increases the number of touchpoints, which delivers more insights and drives greater engagement and higher revenue. The study calls this the Flywheel effect -- a virtuous cycle that produces more data, which leads to greater personalization, revenue and growth.  

The top benefits from understanding customer decisions include a more than 45% of incremental increases in return on investment and return on ad spend. 

About 80% of high performers are more likely to use agencies to overcome barriers. About 77% give their agency partners access to their first-party data. About 58% plan to give their agency partners more access to their first-party data.

High performers also lead when it comes to adopting emerging media, and invest more heavily in digital overall. About 71% advertise in emerging channels, and on average spend $66.3 million annually.

About 50% of low performers advertise in emerging channels and spend on average $44 million.

High Performers are nearly two times more likely to use cloud services. Some 78% have a better understanding of consumer data, and they also know the benefits of increased speed-to-market, data consolidation, increased efficiencies, reduced costs, increased ROI, increased data security and increased customization.

Some 78% of high performers say combining first- and third-party data is a top priority, compared with 40% of low performers. Some 70% of higher performers cite customer journey mapping, while 68% cite dynamic personalized ad creatives, and 67% cite recommendations and cross up-sells as being the top three most useful applications when using first -and third-party data.

High performers also use machine learning. Some 60% say it helps to predicts customer behavior, 48% say they use the technology to personalize the experience, and 45% say it helps to inform the understanding of multi-touch attribution.

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