May 18, 2023
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. And as trends moving toward technology and tools that help to streamline how customers interact with products and services.
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.
Truthfully, every new digital product should focus on creating value for the customer. To that end, every subsequent release must focus on how we can improve on said value.
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. One example of this is the banking industry. If you think about how often we contact a bank directly, it’s minimal. Our interaction is directed instead to apps and other products that allow us to seamlessly find answers without waiting on hold. In the financial sector, customer experience is a top priority.
Improving the end-to-end customer experience is essential for any business. 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.
Here are a few more customer experience case studies to consider.
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. The bottom line is, customer experience can ultimately improve retention.
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.
The Role of Marketing Automation
One method for optimizing the customer journey—and, therefore, their experience—is marketing automation. It’s critical to your digital transformation and improving the customer experience by allowing you to optimize the customer journey. Drawing on a blend of customer feedback, user data, and artificial intelligence, you can use marketing automation to improve the effectiveness of your lead gen and nurturing efforts. To that end, digital transformation can help you increase conversion rates.
Using Messaging to Enhance Your Customer Experience
Optimizing your customer journey to align with your digital transformation strategy also means developing an online presence with consistent messaging to deliver a top-notch customer experience.
More B2B customers rely on your online presence today than ever before. Showing up is no longer an option. It’s mandatory to incorporate all channels your audience uses to interact with your brand into your marketing strategy. Here, you’ll need an omni-channel approach that outlines how to show up, what to say, and the types of content you need to create a consistent experience across every stage of the customer journey. Digital transformation and customer journey strategy is highly relevant in how businesses consider new updates and product launches.
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.
Develop a Digital-First Culture to Deliver the Best Customer Experience
What is the connection between digital transformation and customer experience? Following a study 3Pillar Global undertook in conjunction with the University of Maryland to determine the top drivers of innovation, we discovered that the most successful companies have in common an attractive culture.
It makes sense when you think about it. When you can attract and retain top talent, you’re better able to grow as a company than if you’re constantly hiring to replace employees due to turnover.
In The Product Mindset, David H. DeWolf, President & CEO at 3Pillar Global, states, “Culture will either improve or undermine employee engagement and satisfaction, allow or disallow creative thinking and good judgment calls about change, and build or erode trust when it comes to iteration.”
Ultimately you need team members who are on board with your vision for the future. Even more importantly, you want a team with a product mindset and dedication to innovation, growth, and continual improvement.
So what should you do to create a digital-first company culture that can deliver the best possible customer experience?
Hire People Focused on “Why”
A team focused on asking “why” will help your organization innovate and develop agility. Moreover, it allows your team to maintain a focus on striving for constant and continuous improvement. Fostering this problem-solving mindset in your team means being open to change and encouraging people to speak up when they believe there’s a better way. It also frequently involves developing an atmosphere of mentorship and collaboration.
To that end, a focus on “why” allows you to create feedback loops. Just as feedback is critical for developing products, it’s invaluable for helping your employees grow and being open to their suggestions.
Innovation is a hallmark of continuous improvement. Fostering this in your team starts with setting defined boundaries and processes for developing creative solutions that solve problems and minimize time to value. Innovation begins, first and foremost, with understanding customer feedback which should be regularly collected through various data points.
The product mindset should not be limited to your product team but integral to your organization at every level.
Define Communications Guidelines
Just as boundaries lead to innovation they are valuable for ensuring your team is on the same page for internal and external communications.
If you already have a brand messaging strategy or platform, you’re a step ahead of many of your competitors. It should go without saying that having this also simplifies your marketing. However, it’s also integral to your team onboarding process.
Setting internal expectations makes it easier for people to understand the company culture and internalize key talking points. Sometimes this document may be a simple one-page PDF with “say this, not that” guidance. Other times, it’s a lengthy document.
Regardless of how you define your communications, the most important takeaway is to devote time and consideration to how you want to come across. Without taking this step, your customer experience will lack consistency online and in 1:1 conversations.
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. This includes developing a digital-first company culture designed to deliver an exceptional customer experience.
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.