July 15, 2022

Understanding the impact of digital transformation on customer experience

The digital landscape has been changing for decades. However, not all businesses have been able to make the shift at the same rate. To understand the impact of digital transformation on customer experience, we need to evaluate which companies have had the most success, particularly in light of the pandemic.

Startups tend to wholeheartedly embrace digital, building their entire companies on a digital model. Because they are inherently leaner, it’s simpler for them to adapt to change.

Conversely, enterprises have been slower to adopt digital transformation. Their sheer size means that sweeping changes are rarely possible. To their credit, sweeping changes are also rarely a good idea because they nearly always lead to failure. Even in light of the pandemic, 3Pillar Global recommends incremental change to ensure that our clients are constantly solving real problems and minimizing time to value for their customers.

To no one’s surprise, the COVID-19 crisis accelerated digital transformation out of sheer necessity. This trend appears to be here to stay for businesses of all shapes and sizes.

The increased rate of change has a silver lining, which according to McKinsey, lies in “the falling barriers to improvisation and experimentation that have emerged among customers, markets, regulators, and organizations. In this unique moment, companies can learn and progress more quickly than ever before.”

Regardless of company size, businesses frequently cite operational efficiency as the reason for digital transformation. While this is a factor, when customer experience isn’t at the heart of your digital transformation strategy, it may lead to increased frustration for your customers, decreasing customer loyalty. The truth is that digital transformation impacts customer experience by creating opportunities for brand differentiation that frequently lead to growth.

A strategy-first approach to digital transformation and customer experience

The impact of digital transformation on customer experience cannot be overstated. Customer experience should be at the forefront of every digital adoption strategy.

According to BCG, “an exceptional customer experience (CX) is as good for companies as it is for customers.”

For that very reason, before taking on platform modernization or digital transformation, you must understand the big picture. The very first place to start is with why.

Specifically, you must consider why you’re undertaking digital transformation and how it impacts your customer experience. Organizational change doesn’t have to disrupt the customer experience. It’s quite the opposite. Your digital transformation should positively impact customer emotions by prioritizing their needs.

Digital transformation allows you to minimize time to value

Adopting a product mindset means taking intentional action to solve a specific problem. To that end, a dartboard approach to your digital strategy is not productive—it’s impossible to prioritize everything at once. Instead, 3Pillar Global advocates for incremental change.

So how do you choose what to prioritize? The answer is surprisingly simple: listen to your customers to understand their pain points and overall desires.

Innovation begins with customer feedback. When you listen to your customers—through interviews or user surveys—you can uncover specific opportunities to improve their experience.

From there, it’s a matter of evaluating which enhancements can deliver the most significant impact the fastest. Again, focusing first on customer needs creates value for your customers, improves the experience, and, in turn, deepens loyalty.

Customer experience as a brand differentiator

Simply put, it pays to listen to your customers and adjust your experience accordingly. However, this doesn’t mean that an excellent customer experience must cost your business big. According to PWC, 85% of customers are willing to pay more for a premium experience, meaning that an excellent customer experience can lead to a competitive advantage and financial growth.

According to Deloitte (in the WSJ), “Organizations that can successfully reorient the mission of customer service toward enhancing value for each individual customer will likely have a head start in their industries and markets.”

The key to doing this once again lies in gathering customer feedback. To that end, digital transformation positively impacts customer experience by allowing you the flexibility to shift with the changing marketplace. Customer feedback delivers insights into two primary areas—problems and perceptions.

The problems that keep your customers up at night should be what keep you up at night, too. Specifically, find a straightforward solution to their problems.

Once you understand their problem and have a solution, it’s imperative to learn more about their perception of your solution and their ideas for improving on it.

Customer feedback integration is not a one-and-done step. Instead, soliciting and integrating customer feedback should be part of your ongoing development process. By continuing to iterate and release updated features, you minimize the time to value for your customers, solving for their needs and problems.

Excelling at change is mandatory

Today’s world is too fast-paced not to excel at change, particularly with respect to customer experience. Embarking on a digital transformation means that your organization is better able to shift with changing market conditions. Moreover, your leadership will be able to evaluate when it’s time to change course versus staying the course.

Digital transformation is not a destination. It’s a journey. Companies that set themselves up for agility and change can maximize the impact of digital transformation on your business by improving the customer experience.

3Pillar Global’s high-performing teams can help you rise to the new demands of delivering a premium customer experience through digital transformation. 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.