The following content is from our new e-guide, Customer Feedback in the Digital Era. To access the full guide, click this link!
The business landscape has undergone a dramatic transformation in the past five years, reshaping how brands connect with customers. With more than 65% of interactions now occurring virtually—up from just 25% pre-2020, according to McKinsey & Company—it’s clear that the digital channels organizations use have never been more vital.
This shift isn’t just relevant to consumer brands; local governments, non-profits, and educational institutions are also navigating these changes, each with their own unique obstacles and opportunities in engaging digital audiences.
As organizations of all types engage customers through apps and websites that continue to grow, the importance of these platforms only increases. Yet, many organizations find themselves facing significant challenges in this new digital era.
In this post, we’re exploring the unique trends, challenges, opportunities digital transformation presents.
Customer Retention is Declining for Digital Properties
Organizations are increasingly struggling with low and falling retention rates, particularly for their mobile applications. In 2024, the average 30-day retention rate for Android apps stood at just 2.1%, while iOS apps fared slightly better at 3.7%.
These figures differ across industries, but the overall trend is concerning: the customer lifecycle for digital properties is becoming shorter. 30-day retention rates dropped by 4.4% in 2022 and saw a nearly 14% decline in 2023.
What is driving such a dramatic decline?
Traditional feedback methods are not always built with digital channels in mind and are being outpaced by in-app and web-based collection techniques. These modern channels enable quicker, more direct communication, facilitating faster feedback cycles and making it easier to close the feedback loop.
Additionally, the ease of switching brands has drastically increased with digital transformation. Consumers can now transition to competitors with just a few clicks, making brand loyalty more fragile than ever. This shift underscores the importance of creating a seamless and engaging digital experience to retain customers.
At the same time, CX teams are facing budget constraints and shifting business priorities. They need to balance enhancing customer experiences with limited resources, which can be a daunting task. To navigate this landscape, teams need to focus on targeted improvements that align with core customer needs, leverage data analytics to prioritize initiatives, and foster collaboration across departments to maximize impact without increasing costs.
Customer-obsession is suffering amid budget cuts
It’s no secret that budget cuts are leading many organizations to deprioritize customer experience in 2024. CX and Digital Experience teams are feeling the pinch, and customers are noticing. In fact, 37% of customers believe companies are prioritizing profit over their experience this year.
As budgets tighten, these teams face the challenge of staying customer-focused while being asked to do more with less. This often results in compromises in how feedback is collected, analyzed, and acted upon, ultimately eroding trust and loyalty among customers who expect exceptional digital experiences.
Fortunately, it’s not all doom and gloom for customer experience teams. New technologies, especially in artificial intelligence, enable teams to analyze feedback and uncover insights more quickly and accurately than ever! And that leads us to our next exciting trend.
Artificial Intelligence: A Game Changer for CX Teams
The rise of new Artificial Intelligence (AI) technologies is transforming nearly every job function and department. With AI now mainstream, companies are eager to adapt and ensure they don’t fall behind.
In fact, 83% of organizations have identified AI as a top priority in their business plans, and 48% are already leveraging AI to analyze data effectively.
For Digital Experience Teams collecting vast amounts of customer feedback through mobile apps and websites, there’s a tremendous opportunity to harness AI for advanced feedback analytics and insights. The right AI-driven text analysis tools empower CX teams to optimize resources, make informed decisions, and refocus on customer obsession in today’s business environment.
Here’s how AI is empowering understaffed CX and Digital Experience teams:
- Maximizing Available Resources: AI-powered tools streamline feedback analysis, enabling teams to allocate resources more effectively and concentrate on strategic initiatives.
- Feedback Analysis at Scale: AI allows organizations to swiftly process large volumes of feedback data, identifying trends and patterns that might be overlooked through manual methods.
- Uncovering Key Customer Insights: AI-driven text analysis extracts valuable insights from unstructured feedback, turning it into actionable intelligence.
Read Customer Feedback in the Digital Era
Want to continue reading? Access the full guide for answers to the following questions:
- What does customer-obsession look like amid digital transformation?
- How do CX and Digital teams stay customer-obsessed?
- How do CX teams prove the value of customer-obsession?