The CEOs of technology and service provider companies (TSPs), including telcos, are prioritising investment in customer experience ahead of new products and services, according to a new report.
Innovation spending is increasingly being directed to find new ways of engaging customers, which includes sales, marketing and customer success management efforts, Gartner has found.
Sixty-two percent of survey respondents placed sales in their top three areas for investment and 51 percent had marketing in their top three, compared with only 37 percent for product development.
The survey involved 501 CEOs from North America and Western Europe at TSPs with annual revenue from $10 million to more than $1 billion.
CEOs are investing in customer-facing roles in a bid to win more deals, with sales and marketing effectiveness seen as being more important in hitting future growth targets, the research house said.
Todd Berkowitz, Research Vice President at Gartner, said: "Gartner has long believed that the best product doesn't always win and that many other factors contribute to success, especially a positive customer experience.
"Customer engagement received the highest investment from an innovation standpoint with 42 percent of TSP CEOs listing it as one of the top two priorities, ahead of new products and services and significantly ahead of internally focused activities.”
This focus is, in part, driven by a need to differentiate themselves from the competition.
According to Berkowitz, just five percent of technology vendors are very or extremely effective at differentiating themselves.
He said: “Differentiation continues to be a major issue for TSPs, and it's even harder when the differentiation is tied to product features and capabilities.
"Superior customer engagement, which leads to a superior customer experience, can be a powerful source of differentiation, although only when based on real proof, versus simple claims."
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