Zendesk and Enterprise Strategy Group Report Shows Customer-centric Leadership Is the New Growth Indicator

Zendesk, Inc. (NYSE: ZEN) today released new research in partnership with Enterprise Strategy Group (ESG) that shows how companies investing in customer experience (CX) are reaping the benefits. The global study found there is a clear link between organizations with more mature customer experience capabilities, and improved business success in areas such as market share, increased customer spend, and pivoting processes over the last six months.

The new report, CX Champions: How CX Leaders who raise their game are driving business success, surveyed more than 1,000 CX managers and leaders in North America, Europe, Asia Pacific and Latin America to better understand their investments in CX. From the research, ESG developed a CX Maturity Scale that segments organizations into three tiers of customer service maturity, based on seven key characteristics that cover how organizations use their support teams, technology and data to drive better performance. ESG then classified businesses into three maturity categories: Starters, which exhibit zero to three of the seven characteristics; Risers, which have four to five of the characteristics; and Champions, which have at least six of the characteristics in place.

The research also found that, as companies around the world adapt to new ways of remote working and ongoing uncertainty in 2020, more than three quarters of midsize and enterprise businesses (78%) and nearly two thirds of small businesses (65%) said that customer-centric agility has increased in importance as a result of the COVID-19 pandemic.

"Organizations are under increasing pressure to rise above the competition and grow their businesses - that’s even more of a challenge as companies adjust to the impact of a global pandemic, and the associated uncertainty that lies ahead,” said Colleen Berube, Chief Information Officer and SVP of Operations at Zendesk. "In working with ESG, we set out to confirm the link between an organization’s ability to deliver a high quality experience and better business results. The relationship is clear. We hope these insights on the connection between a focus on customer experience and business success can help companies learn from those that are ahead on the CX scale.”

Some key findings from the report show that companies that invest in CX yield significant benefits, including:

• Faster growth: Even during the pandemic, midsize and enterprise Champions were found to be 8.7 times more likely than Starters to have significantly grown customer spend. For small business Champions, this figure increases to 9.2 times.
• Increased market share: Mid-size and enterprise Champions were 3.3 times more likely to have grown their customer base over the past six months. Small business Champions experienced similar growth, being 3.6 times more likely to have grown their customer base in the same period.
• Senior-level support: Champions also secured greater investment and support from senior leadership within their organization. For example, senior leaders at midsize and enterprise Champions were 3.8 times more likely to see customer service as a differentiator.

"Our research identified a clear connection between CX excellence and business growth. Companies that are at the Champion stage of the scale not only see better outcomes in traditional service metrics, such as resolution time and CSAT, but they’re also experiencing positive business outcomes in customer spend, retention, and board-level support of CX as a business priority,” said Adam DeMattia, Director of Custom Research at ESG.

Only a quarter of companies are at the top of their game

While nearly all respondents agreed that CX stagnation will lead to business disruption, the research found that companies were at varying stages in their own CX maturity. While most organizations are identified as Starters or Risers, with significant room for improvement in their customer experience, larger organizations are generally further ahead in their maturity, with 29% of midsize and enterprise businesses identified as Champions. For small businesses, this figure drops to 22%, while nearly half of small businesses (47%) are at the Starter phase, compared to 36% of midsize and enterprise businesses.

Performing under pressure (and in a pandemic)

Reflecting on the first half of 2020, when companies globally had to rapidly transition to remote working, nearly three quarters of CX leaders surveyed agreed that agility matters more in a post-COVID-19 world. At the same time, Champions fared best during the pandemic: midsize and enterprise Champions were 4.9 times more successful in pivoting to remote work; while SMB Champions were 7.8 times more successful.

"Results show that CX Champions were better positioned to transition to remote working and manage surges in customer requests,” added Berube. "Companies that already invested in technology to not only deliver a good customer experience, but also support customer service agents with flexible and scalable operations, were able to successfully pivot their businesses quickly. While an atmosphere of uncertainty and change becomes the norm, it’s important to know companies still have the opportunity to focus on agility, continue to invest in CX, and prepare for constantly changing customer needs.”

CX teams are also experiencing a lasting impact as the pandemic changes the way businesses work. Among those who said their organization had enacted more flexible remote work policies, 70% are considering making these changes permanent.

Five lessons from Customer Champions

For businesses aspiring to move to the next stage of the CX Maturity Scale, the research calls out five trends that are consistent among Champions:

1. Building a culture focused on CX, driven from the top down: Champions agreed more strongly that CX is a critical business priority. They also have greater involvement from senior business leaders with 33% of midsize and enterprise and 42% of small business Champions reviewing CX Metrics with C-Suite executives on a daily basis.
2. Don’t forget your people: Service and support continue to be an area of focus among leaders, with agents at midsize and enterprise Champions receiving an average of two and a half additional days of training per year than Starters.
3. Data-centric support delivers: Champions place a focus on KPIs and metrics to guide their support decisions. Nearly two thirds of midsize and enterprise Champions (63%) state their KPIs can be reported in real-time.
4. Automation and AI is making an impact: Responding to the increased volume of data and rising customer expectations, Champions make use of automated methods of building and updating cross-channel customer profiles. AI tools, such as automated chatbots, are also making an impact on support performance.
5. Investing in CX success: When asked about plans for the next 12 months, nearly three-fifths (57%) of midsize and enterprise Champions and half (50%) of small business Champions expect their organization’s spend on CX tools and technology to increase significantly, versus just 9% of midsize and enterprise Starters and 6% of small business Starters.

"As we see the trend that Champions are taking the steps to invest more in their tools, team and processes for CX success, Starters not only have the challenge of catching up to their competition in customer service, but also ensuring the gap doesn’t widen,” added DeMattia. "To make these gains, it will be critical for leaders at lagging organizations to make the most of their budgets by learning from their more mature peers and investing in the areas that can drive the greatest impact on their CX maturity.”

Additional Resources

• For more information, download the report, CX Champions: How CX Leaders who raise their game are driving business success, here
• Check out the livestream, "Go From CX Starter to CX Champion” with ESG here
• Read the blog content series on how businesses can achieve CX maturity here
• Find out if your organization is a Starter, Riser or Champion by taking the quiz here

Methodology

To gather data for this report, ESG conducted a comprehensive survey of business decision makers responsible for ensuring and enhancing customer service and support at their organizations. Organizations represented spanned the globe, including North America (N=256), Europe (N=250), Asia (N=250), and Latin America (N=256). Organizations represented were split between SMBs (those with <100 employees, N=500), midmarket organizations (those with 100-999 employees, N=255), and enterprises (those with 1,000 or more employees, N=257). The survey was fielded between July 14, 2020 and August 8, 2020.

About Zendesk

Zendesk is a service-first CRM company that builds support, sales, and customer engagement software designed to foster better customer relationships. From large enterprises to startups, we believe that powerful, innovative customer experiences should be within reach for every company, no matter the size, industry or ambition. Zendesk serves more than 160,000 customers across a multitude of industries in over 30 languages. Zendesk is headquartered in San Francisco, and operates offices worldwide. Learn more at www.zendesk.com.

About ESG

Enterprise Strategy Group is an IT analyst, research, validation, and strategy firm that provides market intelligence and actionable insight to the global IT community. Learn more at www.esg-global.com

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