July 8, 2022
What Is The Connection Between Digital Transformation And Customer Experience?
Everywhere you go, the buzz is building about going digital, and with good reason. According to Salesforce, nearly 90% of customers expect companies to push toward innovation. This is particularly true in the wake of the pandemic, which accelerated digital transformation by up to 7 years, according to McKinsey.
It should surprise no one that companies with a more robust digital foundation and an agile culture could more easily adapt to pandemic-related challenges than companies who merely talked about digital transformation as a “someday” priority.
Digital transformation means more than simply continuing to deliver during times of crisis. It’s about being able to shift rapidly based on changing market conditions and customer needs. To that end, digital transformation and customer experience are closely related—or at least they should be.
Why embark on digital transformation?
According to 3Pillar Global President & CEO, David DeWolf, in The Product Mindset, “The word “digital” is often used to describe any asset that relies upon bits and bytes, such as digital cameras or digital signs—but it can be applied to almost anything. The “digital economy” rests on a particular understanding of the role of digital within new business models.”
To that end, digital products and innovations can transform any business or industry, regardless of size, customer base, or any other factor. The keys to choosing a digital approach lie in solving for a specific need, modernizing your business, and continually improving based on customer feedback and changing market conditions.
What stops businesses from implementing digital transformation?
Innovation for the sake of innovation does no one any good. Instead, innovation with purpose allows companies to iterate, continually deliver incremental change, and shift as needed.
It’s not merely about technology, however. According to George Westerman of MIT, “Unless organizations change, the technology really does nothing for the business.”
Digital transformation and enhanced customer experiences frequently require organizational change as well. Because change can be difficult in any organization, change management—in and of itself—can create bottlenecks to your digital transformation strategy.
The Product Mindset states: “It’s exciting to be a part of [digital] transformation. This excitement doesn’t always last. A new paradigm may not mesh well with existing systems, processes, and bureaucracies—not to mention entrenched attitudes. Many corporate cultures simply are not set up for success in the digital age.”
However, a clear understanding of why your organization is undertaking a digital transformation helps minimize bottlenecks. Clear goals help maintain focus. To that end, you don’t need to modernize every aspect of your business at once—in fact, you shouldn’t. Instead, by choosing a specific goal—for example, a particular area of customer experience—for your digital modernization efforts yield faster time to value.
Designing digital transformation for better customer experiences
According to Forbes, “a successful digital transformation starts and ends with people.” 3Pillar Global finds this is true, internally—in terms of operational agility and team building, and externally—in terms of improved customer experience.
Adopting a digital culture means giving your team the tools they need to do their job better. Of these tools, a product mindset—or a focus on solving specific problems, minimizing time to value, and continually iterating to improve—is significant.
As far as external functions, the impact of digital transformation on customer experience cannot be understated. And this starts by evaluating your customer journey and determining how you can use digital transformation to enhance user experiences.
Three businesses that exemplify the impact of digital transformation on the customer journey
Whether you’re seeking change in an existing company or creating a new company or industry, the customer experience has to come first when embarking on a digital transformation. Three companies that exemplify this are Carvana, Farmers Insurance, and Starbucks.
Carvana delivers the ability to buy vehicles online, without visiting a dealership. This fully-online concept completely disrupts the automotive industry. Users can go online to explore a car and all of its features, arrange for financing, and coordinate delivery with a few simple clicks.
Farmers Insurance hasn’t fundamentally changed the insurance industry. However, by using drones to explore risk and evaluate damage, they can deliver faster decisions and assessments to clients. Simultaneously, they’re improving working conditions for their adjusters.
Even Starbucks is in on the game by driving customer loyalty through their app. The app allows customers to order ahead and pick up their order—without waiting in line, saving precious time on their daily commutes.
All this proves that regardless of your industry, who you serve, and how you deliver to your audience, opportunities for digital transformation and customer experience improvement abound. And, as PWC puts it, “If experience isn’t your strategy, you’re doing it wrong.”
The exceptional expectations of digital transformation and customer experience
Digital transformation allows for more tools to improve your customer’s experience further because new technologies change the status quo. And, these days, your customers expect it. Being at the forefront of continuous improvement that serves your customers is critical to retaining your users and continually proving that your product solves their problems and improves their lives.
By delivering a better experience than your competitors, you can raise the bar for what your audience expects. Simultaneously, you’re setting a new standard for the experience your customers crave, upping loyalty and trust, ultimately leading to customer retention.
To learn more about how 3Pillar Global can help you revolutionize your customer experience through digital transformation, contact us today.
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.