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APIs: How Businesses Can Enhance the Customer Experience Through Data 01

APIs: How Businesses Can Enhance the Customer Experience Through Data


CONTENTS02 The Customer Experience Benchmark

03 Acronym Soup

04 Tapping the Souce and Reaping the Benefits

07 Gaining Sizable Edge on Competition

07 A Better Understanding of Your Customer

08 Real World Applications

09 A Worthwhile Journey


THE CUSTOMER EXPERIENCE BENCHMARKCustomer Experience is heralded as “today’s business benchmark;”1 in recent times, the value in creating favorable customer experiences has gained traction across a wide array of industries. According to Gartner Research, by 2018, more than 50% of organizations will implement significant business model changes in their efforts to improve customer experience.2 Further, by 2020, customer experience will overtake price and product as the key brand differentiator.3

This is likely the result of a number of factors, including: 1) Increasing market competition with a myriad of competitors offering the same or similar products and services.

2) A global shift which sees service-based industries emerging as a commodity.

3) Advents in mobile technology.

The latter is significant, as consumers are continuously flooded with product and service choices, all accessible with a few clicks or taps of a button, and they are willing to put their money where rewards, in positive customer experiences, can be reaped. This is compounded by the fact that consumers are increasingly aware of the power and influence they wield and have no qualms about voicing their praises—or complaints—to those within or outside their social sphere. This too, can have resounding and quantifiable effects: referred customers deliver 16% to 25% higher lifetime value versus non-referred customers.5

Stellar customer experiences are intertwined with the bottom-line. As concrete proof, The Business Impact of Customer Experience, 2015 report from Forrester Research shows that not only does customer experience correlate to loyalty and retention, it is associated with consumers’ willingness to repurchase, reluctance to switch brands, and likelihood to make recommendations.6 It can also translate to millions in revenue—$161 million in revenue benefits for banks, $328 for insurance providers, $85 for investment firms and $572 for retailers to be exact.7

Leading companies are hip to the fact that the differentiating factor, in terms of competitive advantage, is the delivery of positive customer experiences—and not solely the delivery of core products. Furthermore, they acknowledge the importance of consistency in interacting with customers across multiple channels

The figures say it best:

85% of consumers said

they would pay up to 25% more to ensure a superior

customer experience, while a staggering 89% say they have

switched brands because of poor customer experience.4


(online and offline) which yields an 89% customer retention rate,8 and the need for a proactive approach to meet customers’ needs. Most importantly, they recognize that understanding their target customers and tailoring services to their needs is crucial. This is typically achieved using a combination of individualized insights, connected interactions and an agile approach to meet customers at strategic touchpoints. It requires new ways of exploring customer trends and preferences, and being smarter about responding to these factors.9

And It All Boils Down to DataThe data-driven customer experience is critical to the future growth and development of organizations, particularly in today’s hyper-competitive economy,8 and it can spawn a wide range of benefits such as revenue generation, product optimization for target customers and increased identification of trends. In this landscape, Application Program Interfaces (APIs) are emerging as the go-to, turnkey, solution capable of delivering key consumer insights that enhance the customer experience across various channels.

ACRONYM SOUP For the unfamiliar, or minimally tech-savvy, application programming interfaces (APIs) are a set of instructions, protocols or tools that allow programmers to develop apps, websites or operating systems. That’s right. Behind every app that we rely on— and there are many—there’s an API. It is the driving force behind virtually all social platforms.10 To better comprehend the terms, it helps to break them down. The applications (or apps) are the tools, social networks and other software that are frequently used on smartphones, desktops, and mobile devices. The programming aspect dictates how engineers create all these applications that have wormed their way into our lives, and finally, the interface is the common boundary shared by two applications or programs that allow both to “talk” to one another.9 So, essentially, APIs act as the middleman between a programmer and an application, which “exposes” certain data, content and functionalities of a website, application or other software, that can be built on or modified to suit specific, individualized purposes.

In this way, APIs function as a bridge that brings disparate, or siloed, data together—linking the gap between where the data “lives” and where it needs to go in order to ”thrive.”


So Why All the Fuss About APIs?

Well, for one, in this digital age—with advents in cloud and mobile technology—they have revolutionized how business-to-business (B2B) and business-to-consumer (B2C) companies are sharing information, reaching new customers11 and creating compelling user experiences. Indeed, for pioneering companies such as, Google, Salesforce, Facebook and Amazon, to name just a few, APIs, their applications and underlying data have been recognized as the strategic cornerstone responsible for their business explosions.12

But they’re not the only ones. According to a survey by Apigee, up to two thirds of companies today—from finance and media to retail and telecommunications—have API initiatives in place13, translating to over 15,000 APIs available for data consumption, a number which is quickly proliferating.14

This is largely due to opportunities to leverage API technology that can seamlessly track and understand consumer behavior across all digital avenues. Historically, companies struggled to garner such in-depth and relevant consumer information—often adopting clunky approaches that lacked sophistication. Through API technology however, which carries essential data on consumer behavior and activities, they can now gain a clear view of who their customers are, what they do and even granular information such as location and time of day. All of this allows companies to paint a holistic and accurate picture of consumers and their journey on a grand scale. Ultimately, APIs allow enterprises to construct an intuitive, consumer-centric model that allows for weaving a customer experience that is both personalized and engaging.15

TAPPING THE SOURCE AND REAPING THE BENEFITSIn essence, APIs are another way to do more with less—extending application functionality and data in novel ways to reap a number of measurable benefits for businesses across an array of organizational landscapes.

When APIs are used strategically, cash registers ring with little added effort. This is because APIs allow companies to transform one of their core assets - data, and expand the reach of their products and services to new audiences. How’s this all possible? Well the API can open up and target your business, products and services to key players: the customers. Along with that, there’s promise of edging out the competition in terms of visibility, viability and profitability. But most importantly, because these data are richly insightful, APIs can ensure the delivery of superior customer experiences in the following ways:


1. Capitalizing On Micro-MomentsLet’s explore the aspect of profitability a little further. How can an API be used to monetize available data? The answer is simple: With micro-moments. These are those “in-the-moment” instances when a consumer resorts to Google or social media to address an immediate need or solve a problem. Admittedly, we’ve all consulted the oracle that is the Internet to answer a pressing question or attend to a need, and the figures back this up: 65% of consumers look up more information online now versus a few years ago, 91% of smartphone users turn to their phones for ideas while doing a task, while 82% consult their phones when deciding what to buy on a store run.16 These crucial moments are recasting the way consumers are making purchase decisions; therefore, they present a unique opportunity for companies to meet them at key transactional points.

The mobile revolution has altered the way in which businesses communicate and engage with consumers and has segmented consumer journeys into hundreds of these real-time, intent- driven moments16 categorized as: I-want-to-know moments, I-want-to-go moments, I-want-to-do moments and I-want- to-buy moments.15

All along the way, consumers are leaving a trail of their intents, needs and wants. With an API, companies can follow the trails—so to speak—and leverage these micro-moments for enhanced engagement. Consumers expect rapid, seamless experiences as they navigate between devices and channels, and as they jump from micro-moment to micro-moment, they expect everything to connect and be efficient. However, if only part of the journey is optimized, there’s risk of them cutting that journey short.18

APIs present a unified approach in the micro-moment conversation. By connecting data, applications, and systems, they allow for a continual consumer journey.19 For example, using APIs, companies can leverage contextual and targeted information to deliver tailor-made experiences and messages for consumers.16 APIs minimize the potential for a disjointed journey for consumers and keeps companies anchored in these micro-moments by integrating data needed to answer the call during those vital “I want to…” moments.

2. Securing the DataGartner, the research giant, estimates there will be 6.8 billion connected devices in use this year, a 30% increase from last year. By 2020, that number is expected to expand to more than 20 billion connected devices.20 Unfortunately, with all the good the advent of technology has brought, there is of course, some bad—namely, the rise of cyberattacks and security breaches. The intended target of these attacks are companies of all sizes, as hackers relentlessly deploy sophisticated attacks on organizational systems replete with consumer and corporate

91% of smartphone users

turn to their phones for ideas while doing a task.


data. A recent global survey shows that the number of attacks reported by midsize companies has jumped 64% since a year ago21, and approximately 1 in 40 small businesses—who are increasingly becoming a primary target— are at risk of cybercrimes, while 1 in about 2 large businesses are targeted multiple times each year.22 The fallout? Disrupted business systems, threats to intellectual property, the loss of customer confidence, sullied reputations and financial loss. Enterprise security incidents incur a cost of over $500 billion today, and this is expected to increase to an estimated $2 trillion by 2019.23 And currently, there’s just not enough manpower to address these attacks, as nearly 75% of security professionals say they do not have enough staff to defend their organizations against current threats.24

To counterattack, enterprises are adopting APIs to securely insulate valuable consumer data beyond the firewall. Using the insurance industry as an example, data kept in one server—such as claims figures—can be moved swiftly and securely to integrate with another data set—demographic info, for instance. Therefore, APIs present a seamless approach to accessing customer’s data for efficient communication and service delivery without fear of compromise. These API solutions typically contain built-in features including authentication algorithms, traffic monitoring, tracking access and auditing to inform security teams on system activities.22 In so doing, they are meeting stringent data protection and privacy regulations.11

By mandating the use of APIs to access critical enterprise data, companies are creating effective security control points which are safeguarding their primary assets.25

3. Speed and ConvenienceQuick and secure integration is a major selling point for APIs, as customer data can move automatically, securely and rapidly. Consequently, benefits in terms of time-savings and convenience can be realized. Because your customer communications are bolstered by this data, they can be uniquely tailored to each recipient in real-time; forming a holy grail of new age communication that is rapid, secure and personalized.

The emergence of fast data—the process of leveraging data in real-time to gain insights to take proactive actions on customer trends, patterns and activities—in this digital age, cannot be ignored. Today, it’s about giving the customer what they want, when they want it and how they want it—otherwise there’s risk of customers defecting to the competition—ring a bell? Here’s a hint: micro-moments.

Fast data, as the name implies, is not only gathered quickly, but also shared and acted on immediately, before its shelf life expires and the data loses its utility.

To do this effectively, a system capable of processing and accurately transferring data in real-time is needed.26 APIs can serve a critical role in this realm. Using API solutions, data can be rapidly transmitted, resources can be automated and shared, and tons of data can be loaded and manipulated—simply by logging into an online portal. APIs allow for ease of access and interchange of information between applications, all done securely and without the need for complex pre-processing steps. Moreover, APIs quickly and securely move information needed to help

By mandating the use of APIs to access critical enterprise data, companies are creating effective security control points which are safeguarding their primary assets.25


address specific issues, drive results and propel innovation in the moment.27 So companies can engage with their customers quickly and more intelligently to boot.

GAINING SIZABLE EDGE ON COMPETITION

Forward-thinking companies are using their APIs to drive their competitive advantage. Kristin R. Moyer, vice president and key analyst at Gartner, says

“The API economy is an enabler for turning a business or organization into a platform. They multiply value creation because they enable business ecosystems inside and outside of the enterprise to consummate matches among users and facilitate the creation and/or exchange of goods, services and social currency so that all participants are able to capture value.”28

These opportunities are afforded to all companies, because they can leverage customer touch points to collect essential information using these systems; thereby granting them opportunities to steer the consumer journey aright. In all, APIs can help companies innovate faster and lead to new products and new customers.29 But, understanding the potential is the first step in this process. In an article for Harvard Business Review, Bala Iyer and Mohan Subramaniam share how companies can use APIs to build large stores of information that absorb useful information which predicts consumer behavior, retains users and expands their ecosystems.30 Overall, these systems can enable better visibility, insight and performance by utilizing an organization’s core assets to extend the reach of existent services and create new revenue streams. In this way, APIs can add to already established features and functionalities, while bridging the gap between devices and software.

A BETTER UNDERSTANDING OF YOUR CUSTOMER For many businesses, the best part of APIs is that they help extend online reach. But that’s not all, because, as previously mentioned, they allow for better understanding and engagement with customers. In an increasingly digitally mobile world, it can be difficult for companies to not only understand customer behavior, but to keep track of consumers as they traverse through various digital channels and alternate devices.31 This is particularly salient in view of statistics that show greater than 52% of Americans use two or more internet connected devices and further, the ability to interact with a company over multiple channels has been cited as one of the top five areas that lead to a positive customer experience.32


As a starting point, mapping out customer-brand interactions is advised. In order to accomplish this, answering the following is useful: What engagement tools are utilized? What type of these interactions are repeated? Where do hidden gaps lie—and how can these be addressed to enhance engagement? In mapping out your customers’ journeys with your brand, you make it easier to improve each portion of it—one step at a time. It’s no wonder then, that 86% of senior-level marketers count creating a cohesive consumer journey of utmost importance for their brand.33 Using an API, companies are at an advantage to patch potential holes in the customer journey with improved communications, solutions or touch points that are streamlined and consistent across all channels.

REAL WORLD APPLICATIONSAPIs have been utilized cross-industry to optimize business strategies in unique and intrinsic ways.

For example, in the financial services industry, they have been used to unify information without the need to merge legacy operational systems; further, they are used to tailor data to meet the specific needs of applications or process steps.34 This is also an issue that is realized commonly in the Insurance industry, and allows for the flow of data between disparate systems, without an immense amount of IT resources.

For a specific and detailed use case scenario in this realm, take the example of retail giant Sears. As a leading purveyor of products and services from home appliances and apparel to automotive repair and maintenance, retail transformation through API technology has become a reality. As Kandarp Bhatt, director of ecommerce product management explains, “Our mission is to serve, delight, and engage our members while they shop their way. To succeed in our mission, we must ensure that our members are able to shop for their needs irrespective of where they are located, what device they use, and when and how they need their order to be fulfilled. Our APIs allow us to achieve this mission by supporting all our online, mobile, and multichannel properties and initiatives.” 35


Through their API programs, Sears is able to do just that. By serving both internal and external developers, who have expertly curated product and store data to drive the creation of mobile apps, websites and other tools, efforts to improve the company’s online user experience have been enabled. As returns for their technological investment, the company counts on the benefits from these APIs - of developing and maintaining stores on a variety of platforms (online and mobile) and the creation of collaboration opportunities with external business partners (including affiliates and developers) - to further optimize their customers’ shopping experiences. As Bhatt perfectly summarizes, “We recognized early that embracing APIs as an organization-wide glue for building applications enabled unprecedented scalability and flexibility. In addition, we are very interested in enabling external partners to build innovative shopping experiences around our data and capabilities. We have, therefore, continued to invest in a dedicated API engineering team for several years now.”

A WORTHWHILE JOURNEYFor companies across a number of industries, including insurance, financial service and retail, seeking to maintain relevance and viability in this new age, an in-depth understanding of customer’s individual journeys, across a range of platforms, is critical to building optimal customer experiences. Those who have assimilated to this trend have experienced up to 60% more profitability than their counterparts,36 and by adopting this approach, consistent and relevant communication channels have been built. APIs are providing the capabilities needed to integrate systems in order to deliver secure, faster and enhanced customer experiences through the leveraging of data.

Advanced adopters of API solutions are up to 3 times more likely to have seen a faster delivery of revenue-enhancing applications and 3 times more likely to have improved delivery of the customer experience than those with limited adoption. 37

Thus, it remains apparent that on the journey to improving the customer experience, APIs are leading companies down the correct path.

At SPLICE Software, we’re more than familiar with this journey--and better yet, we’ve gained first-hand knowledge into the crucial role real data plays in shaping it. But to top it all off, we understand people and the values of effective communication in meeting their needs. By harnessing the power inherent in these key elements, supported by a full-service Voice Experience, we hold a stellar record for helping businesses in the retail, financial and insurance sectors who are (wisely) striving to improve their customer relationships. As these leading organizations have learned, what lies ahead of the journey are rewards of a better customer experience, higher customer loyalty, and lower customer churn and attrition rates. Now that’s meeting the benchmark.

Those who have assimilated to this trend have experienced up to

60% more profitability than their counterparts.


SPONSORED BYSPLICE Software offers a cloud-based Dialog SuiteTM that specializes in using big data and artificial intelligence to create distinctly human messaging. Our patented software sends automated Voice & SMS in the right moment of the customer journey to drive optimal engagement, and the desired call to action. Our Suite enables you to collect and manage customer’s permissions and preferences so you can personalize, communicate, and measure like never before. For more information, please visit www.SPLICEsoftware.com.

SOURCES:1) www.forbes.com/sites/martinzwilling/2014/03/10/customer-experience-is-todays-business-benchmark/#605c8b1bad5f2) www.gartner.com/newsroom/id/30720173) www.datamentors.com/blog/how-great-customer-experiences-drives-more-revenue-manufacturers4) www.forbes.com/sites/briansolis/2016/06/29/how-to-create-a-brand-defining-customer-experience/2/#139b130a4dc7 5) knowledge.wharton.upenn.edu/article/turning-social-capital-into-economic-capital-straight-talk-about-word-of-mouth-marketing/ 6) solutions.forrester.com/Global/FileLib/Forr_Perspective_/Forrester-Perspective-CX-2.pdf 7) esources.moxiesoft.com/rs/moxiesoft/images/Business_Impact_Of_CX_2014.pdf 8) www.superoffice.com/blog/customer-experience-statistics/ 9) www.forbes.com/sites/forbesinsights/2016/05/13/data-driven-customer-experience-the-organizational-challenge/#7544abb646ec 10) sproutsocial.com/insights/what-is-an-api/11) www.forbes.com/sites/mckinsey/2014/01/07/ready-for-apis-three-steps-to-unlock-the-data-economys-most-promising- channel/#6aafb98d89e512) www.forbes.com/sites/tomtaulli/2015/11/30/why-the-api-economy-is-exploding/#a4fdc8859dce13) apigee.com/about/tags/digital-transformation 14) techcrunch.com/2016/05/21/the-rise-of-apis/ 15) mobilebusinessinsights.com/2015/11/building-a-better-customer-engagement-model-through-apis/16) think.storage.googleapis.com/docs/4-new-moments-every-marketer-should-know.pdf17) www.thinkwithgoogle.com/micromoments/intro.html18) marketingland.com/five-ways-marketers-can-win-mobile-first-micro-moments-183746 19) www.programmableweb.com/news/why-micro-moment-based-workflows-should-inform-your-api-strategy/sponsored- content/2015/05/2620) www.cnbc.com/2015/12/28/biggest-cybersecurity-threats-in-2016.html21) www.pwc.com/us/en/private-company-services/publications/assets/pwc-gyb-cybersecurity.pdf22) smallbiztrends.com/2016/04/cyber-attacks-target-small-business.html 23) apigee.com/about/tags/api-security24) www.helpnetsecurity.com/2016/07/15/cybersecurity-concern-rise/25) apigee.com/about/tags/api-security26) www.infoworld.com/article/2608040/big-data/fast-data--the-next-step-after-big-data.html?page=227) www.qualtrics.com/blog/big-data-is-old-news-enter-fast-data/28) www.gartner.com/smarterwithgartner/welcome-to-the-api-economy/ 29) dupress.com/articles/tech-trends-2015-what-is-api-economy/30) hbr.org/2015/04/are-you-using-apis-to-gain-competitive-advantage31) www.ntia.doc.gov/blog/2015/majority-americans-use-multiple-internet-connected-devices-data-shows 32) www.datamentors.com/blog/2016-customer-experience-will-separate-winners-losers 33) www.salesforce.com/blog/2014/12/86-of-senior-level-marketers-agree-on-the-importance-of-creating-a-cohesive-customer-journey.html34) www.forbes.com/sites/danwoods/2016/02/25/how-apis-help-the-financial-industry-keep-up-with-apple/3/#7ffdaa8740f6 35) apigee.com/about/blog/digital-business/innovator-spotlight-sears-leading-retail-industry-transformation-through36) blog.bitext.com/case-study-customer-insights-minutes37) www.ca.com/us/rewrite/articles/application-economy/apis-and-the-digital-enterprise.register.html


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