May 2019, London
Europe's biggest event for commercial and digital travel execs
2019 priorities: EX, cybersecurity, brand power and blockchain
As travel companies look ahead to the New Year, Forrester delivers some hard-hitting analysis and advice
Many of 2018’s marketing mantras failed and now will become 2019’s shibboleths, if US-based tech and business research and advisory giant Forrester is right. To go straight to just a few of its hard-hitting points, CX is under fire, the world will go to Zero Trust, employee experience (EX) will go centre stage and digital will go surgical. In comes the brand as top priority and greater use of blockchain.
Reviewing the 2018 challenges that business leaders had to meet (or risk falling behind competitors) Forrester dwells on: evolving and escalating customer demands, the hyper pace of digital and the opportunities that exploit new technologies to drive efficiencies and enter new markets. Companies dreamed big, it says in its report forecasting 2019, appropriately named Transformation goes Pragmatic. To take its first point, what actually happened in 2018 went, according to Forrester, something like this: “Many of these dreams met the reality that large-scale strategies, such as customer experience (CX) and digital transformation, are hard and costly and, most importantly, challenge the way leaders run their businesses.
“In 2018, CX performance was flat, and more than 50% of digital transformation efforts stalled. Although some progressive CIOs and CMOs drove change, most struggled to compel their organisations to see and act differently.
In 2018, CX performance was flat, and more than 50% of digital transformation efforts stalled
“But far too many were not ready — some due to a lack of organisational readiness; some because they underestimated the real work needed to overcome technical debt and poor data governance; some because the sound strategy was to invest in back-office technologies to drive efficiencies; some due to a lack of executive cohesion; and some due to the fear that it would interrupt or destroy quarterly performance.”
Lessons learned for 2019 should include that there are “important foundational challenges to tackle: organisational readiness, technical debt, data governance, and aging brands top the list.” Pragmatism is required in what is looking likely to be a particularly difficult time.
Short-term gains for CX
On CX it reckons that “overall 20% of (consumer) brands will give up on strategic initiatives and resort to price reduction for short-term gains.” In Forrester’s surveys “89% of surveyed CX professionals state that the return on investment (ROI) of CX is not well established in their companies. Across Forrester’s Customer Experience Index (CX Index™), few businesses made real gains, most continue to plateau, and some fell back.”
In 2019 with CX, Forrester predicts: “Most will try to make more gains in find-fix or non-disruptive enhancements — and some will panic. To put financial points on the board, some companies will return to old-school methods such as price discounting to attract customers and win on volume.”
Turning to digital, it says that 25% of firms will decelerate efforts altogether and lose market share: “Slideware for digital transformations is so hopeful, full of visuals that paint a picture of a very different and digitally wonderful tomorrow.” But CEOs and CFOs all too often cannot see a route to that digital nirvana “without taking on disruptive operational change.”
The solution – to move from “super-wide enterprise efforts to a pragmatic, surgical portfolio view of digital investments with the goal of making incremental and necessary changes to operations.” Tangible efforts, such as shifting customers to lower-cost digital channels, launching digital products, monetising data assets, and automating processes to improve margins, should come to the fore.
Join EyeforTravel for The Travel CX and Acquisition Summit 2019 on May 21-22.
Brand makes a comeback
On brands: “20% will refine and revitalise purpose”, Forrester added: “In recent history, purpose-driven strategies had momentum. Purpose created the essential thread among defining core competency, resource allocation, EX, brand, and CX. The reason for being was a rallying cry for employees and a positional statement for firms. But somehow, that has faded away.”
More than 50% of CMOs will bring brand back as their top priority, it states. Brand is back because of the “fading connection (and strength) among purpose, brand equity, and how brand promise informs and affirms the customer experience.” CMOs, it believes will move more budget and attention in 2019 to remaking or revitalising the brand.
Amid the need for change, the CIO is seen by Forrester as waging “a three-front battle: addressing ageing systems and long-standing data issues; driving a business strategy that harnesses the value of a wide range of new, powerful technologies”, to name a few. In 2019, Forrester says, 25% of CIOs will expand their remit.
AI turns the corner, but cyber threats prevail
On AI, Forrester is optimistic: “...most firms will turn the corner on data governance thanks to AI. Firms will also expand RPA (robotic process automation) and proofs of concept to broaden the process, product, or experience scope and better understand the impact of AI.”
Less good, it sees 2019 as being “a year of unprecedented cyber-threats to companies and individuals.” This was thrown into sharp relief last week with the news that Marriott’s loyalty programme had been compromised.
IT Security controls used by most organisations will need considerable improvement
Keith Dewey, Data Expert, DataGRC
As data security specialist advisor Keith Dewey, from DataGRC, puts it: “This certainly appears to be one of the biggest global breaches to date, with a large amount of data at risk. If the compromise started in 2014, it is quite possible that fraudsters have already been using the personal data to commit crimes. With GDPR driving data breaches to be reported more quickly and more openly, we certainly don’t expect this to be the last of the big breaches. IT Security controls used by most organisations will need considerable improvement. The imminent fines and legal action will drive those improvements, and eventually reduce the risk to individuals. ”
Forrester also argues that this will be a year when governments and companies turn to Zero Trust (ZT) strategies, which abolish the idea of a trusted network inside a defined corporate perimeter.
Talent top of mind, blockchain on the boardroom table
In 2019, “low unemployment and high quit rates will further magnify the importance of talent.” (And increase the use of automation!) Executives will reignite change management efforts, substituting targeted EX initiatives for the previous year’s broad-based culture efforts, though with mixed results. EX, it suggests, will take centre stage, companies reigniting change management efforts and substituting targeted initiatives for 2018's broad-based culture efforts.
On the ad scene - a controversial one in 2018 with major brands cutting millions from their digital ad budget in protest at hidden fees - Forrester’s prediction is: “By the end of 2019, more than 50% of the top 100 advertisers will use blockchain for supply chain transparency.”
And, lastly, a warning that the market is ”not slowing down or getting more forgiving!”
Don’t miss the The Travel CX and Acquisition Summit 2019 on May 21-22.