August 24, 2021

Digital Transformation and Customer Experience

While companies claimed the “secret sauce” to winning over customers depended solely on the quality of their service or product offerings in the past, this no longer holds true.

Now, a far more important success factor has emerged—delivering the best possible customer experience. With an increasingly competitive ecommerce landscape, businesses must prioritize the customer experience more than ever before.

Creating great experiences for consumers often means brands must take on digital transformation initiatives to respond to new market realities. And today’s always on-the-go, tech-savvy customers want their needs to be met instantaneously, which means companies have to meet consumers where they are if they want to stay in business.

In this article, we’ll explore the connection between digital transformation and customer experience and break down the ways you can respond to changing consumer preferences.

Impact of Digital Transformation on Customer Experience

Digital transformation is the process of integrating digital technologies into every aspect of a business. What’s interesting about this phenomenon is that organizations aren’t driving these changes; the customer is.

When it comes to how digital transformation is driving customer experience, here are a few of the market forces at play:

  • Digitization: Digital engagement and the growing interest in IoT (Internet of Things) has skyrocketed, leading companies to innovate quickly and replace traditional modes of engagement. Plus, since many Millennial and Gen Z customers are digital natives, they’re engaging on more channels than previous generations—social, email, SMS, chatbots, and more.
  • Rising customer expectations: Thanks to the increasing reach of ecommerce, consumers expect an omnichannel buying experience that seamlessly moves between brick-and-mortar and web-based, app-based, and social-based channels. They also seek more personalized interactions with brands—with multiple, customized touchpoints that allow them to allocate their time and money according to their unique preferences.
  • COVID-19: According to Futurum’s 2020 Digital Transformation Index, 62% of organizations say they’ve had to completely reimagine their operating model because of the pandemic. These changes translated to a more heightened focus on speed, convenience, and accessibility. Business leaders are also working to become better prepared for the future and provide customers with alternatives regardless of events.

Essentially, customers are in control of how they interact with brands. Businesses looking to understand their customers and deliver exceptional products, services, and experiences are focusing on re-aligning their strategy around the consumer. And that means investing in the technologies and business models that put the customer at the forefront of their decision-making.

Key Elements of a Customer-Centric Digital Transformation

Being aware of the impact of digital transformation and customer experience is one thing. Execution is another.

The dynamic nature of the digital world will present businesses with various challenges, and the success will depend largely on the chosen digital strategies. Here are 7 best practices to achieving better customer-centricity in the digital age:

Define Big-Picture Strategy

Begin by taking inventory of your current situation and identify key areas of improvement.

Look at where digital strategy stands today—across all areas, including product development, marketing, sales, customer service—and create your own digital transformation roadmap that takes your business goals into account.

Are these strategies centered around your customers? Does the feedback inform them, or do you need to make some changes?

Understand the Customers and their Journeys

With customers gaining control over the way brands deliver experiences, organizations need to develop a deep understanding of each segment and optimize individual experiences at every touchpoint of the customer journey.

From awareness to purchase, this journey has become one of several pathways and multiple devices—or channels. Ensure no customer slips through the cracks at any point of the interaction process.

Align All Department and Functions Around a Unified Strategy

Simply put, when your departments are misaligned, you’re missing out on opportunities to have meaningful interactions with customers.

Each department can be working with a different, limited data set and performing tasks at different stages in the customer lifecycle. They do not share information with other departments, and can inhibit growth and fragment the customer experience as a result.

To maximize the customer experience in digital transformation, you need to align sales, marketing, and customer service around the same big-picture business strategy.

Create a Flexible IT Environment

The digital transformation of customer experience starts with understanding what customers want.

  • How do they prefer to interact with your brand? What channels do they use?
  • What platforms do you use to communicate with customers? What software systems do you use to manage customer interactions?
  • Are you dealing with legacy apps, siloed departments or platforms? Do you need to migrate key functions and data sources to the cloud or integrate them with the rest of your operations?

Fortunately, cloud technology enables companies to be fast, dynamic, and flexible, giving you the ability to create a 360-degree view of your customer and meet their demands faster.

Develop a Data Strategy

Data is only useful to your business if you know how to organize, contextualize, and derive critical pieces of information from it. Addressing these questions can help you shape your data management strategy:

  • How will you manage data from customer-facing channels and internal workflows and applications?
  • Is there a system in place for analyzing data and surfacing insights to the right person? What is your governance strategy?
  • Do you have AI-enabled analytics to support smarter decision-making—both at the executive level and on the front lines?
  • How are you prioritizing customer feedback and, later, closing the loop?

Optimize Processes on the Back-End

Inefficient back-end processes can have a detrimental impact on the customer experience. And since 64% of consumers say they expect companies to reply to them in real-time, your back-end must be digitally enabled to respond.

If you want to digitize your back-end process and support customer-facing channels, consider which tasks can be automated, as well as what you can do to develop more efficient workflows and eliminate redundancies.

Establish Organization-Wide Metrics for Measuring Success

For company-wide transformations, you’ll need to establish company-wide metrics and KPIs to accurately measure success.

In other words, everyone must speak the same language across all parts of an organization when defining the right metrics to use, discussing issues, and exploring other customer experience-related activities.

Final Thoughts

No matter what industry you’re in, creating an outstanding customer experience has gone from a nice-to-have to a mandatory necessity.

In your company’s quest for a customer-centric digital transformation, deploying a strategy that puts the consumer first will make all the difference. You’ll want to take the steps necessary to ensure your time, budget, and resources are adequately spent on areas that deliver results and also align with your business’s core values.

After all, the organizations that can adapt to the evolving needs of customers will outperform competitors and position themselves to win in a cutthroat global economy.

3Pillar Global’s high-performing teams can help you rise to the new demands of meeting and managing consumer expectations. Contact us today to learn more about our process, services, and the advantages of our digital innovation solutions.

Special thanks to these members of FORCE, 3Pillar’s expert network, for their contributions to this article.

FORCE is 3Pillar Global’s Thought Leadership Team comprised of technologists and industry experts offering their knowledge on important trends and topics in digital product development.