How to Improve the Customer Experience through Digital Transformation
By: Oppong Paul
Tags: Agile, Best Practices, Change Management, Stakeholder, Agile Business Analysis

Digital transformation brings with it many possibilities, but arguably one of the most important is transforming the customer experience.

Yet digital transformation does not always deliver this. One research study demonstrated that only 19% of customers felt they had a significant improvement in their experiences with companies, following $4.7 trillion of investment in digital transformation. A large number of companies (47%) have not even begun with digital transformation. These organisations are fast getting left behind and are missing a trick, when reports show that companies that have transformed digitally are 26% more profitable than those that have not. Given that companies that have undertaken digital transformation report the process taking between two and eight years, it is time to get underway.

What Customers Want

Customers have become increasingly demanding in recent years. Digital technology has driven this change. Shopping online and via mobile has presented customers with the opportunity to get what they want, when they want it, and now they expect this. At the same time, e-commerce, personalisation and new ways of communicating with customers have led to tremendous benefits for customers. In short, customers want instantaneous interactions and experiences and to be able to communicate with the organisation in the way that they prefer. Finding ways to deliver this through digital transformation can bring great benefits.

Why Be Customer-Centric?

Many digital transformation efforts focus too heavily on the opportunities that this brings for lowering costs for the business. This is unlikely to lead to greater customer satisfaction with the company. It is better to put the customer experience central to the process of digital transformation to reap the greatest rewards.

There are many quantifiable benefits to being customer centric in order to engage customers. Customers that are very engaged have been reported to purchase 90% more frequently, and they spend almost two thirds (60%) more per purchase. This presents a massive opportunity for businesses across all industries. Happy customers are much more likely to be retained, and it costs much more to gain a new customer than retain an existing one. This means that focusing on the customer experience with digital transformation efforts makes a lot of sense.

If you aren’t yet convinced consider this statistic: Companies that earn $1 billion a year have the potential to earn an extra $700 million over a three year time frame through investing in delivering an improved customer experience.

How to Improve the Customer Experience through Digital Transformation

There are a vast number of ways in which companies can have a great impact on the customer experience through digital transformation. One example is the use of chatbots. When implemented thoughtfully, chatbots improve the customer experience by allowing customers to communicate with the business at any hour of the day and on any day of the year and get a rapid response to their question. Studies show that 84% of customers prefer this due to the instant availability of chatbots. It is worth considering what you can do to automate customer communication for greater customer satisfaction through this approach.

Another remarkable benefit of digital transformation is the amount of data that companies can glean about their customers. Digital technology offers the opportunity to capture this data and analyse it, so organisations can learn much more about their customers than ever before. For example, it is possible to get a much better understanding of customer purchasing habits, which can drive improved marketing. This offers a great advantage, but only if it is implemented effectively (as I will explain below).

Digital technology can also be used to integrate the back end and the front end of systems, which can deliver the benefit of streamlining the customer journey. This means customers have a smoother, easier experience and are more likely to come back.

These are just a few of the countless benefits that digital transformation can bring for enhancing the customer experience.

Transforming the Customer Experience

It is important to note that when considering the use of digital transformation to improve the customer experience, the approach that should be taken must be enterprise-wide. An overarching effort like this will help to ensure that all possible customer touchpoints and interactions with the business are taken into account, so that digital transformation can genuinely deliver everything it sets out to for the customer experience. From a cultural perspective, ensuring that the organisation is genuinely customer focused is important from the outset.

On this note, a common mistake in going transforming the customer experience, was revealed in a study which showed that just 25% of respondents had set out to map the digital customer journey before trying to undertake digital transformation in this area. This is indicative of a bigger problem, which is a lack of organisational focus on customers in the first place. The problem is that some companies get tied up with focusing on a narrow approach of only using data to find ways to market to customers. This has the potential to seem robotic in nature, and it can be not particularly warm or welcoming from a customer perspective. Having some empathy with the customer and considering what customers might actually want is critical in the digital transformation process to avoid these types of problems. Taking a human-focused perspective is important, to get it right.

Summary

Digital transformation can bring about a great range of benefits if the customer is placed centrally to the effort. A focus on the customer journey can lead to increased revenues through enhancing customer loyalty and driving additional sales. Benefits of digital transformation for the customer are numerous, and include the ability to get what they want, when they want it — which customers now expect. It is important to take an enterprise-wide approach to improving the customer experience through digital transformation to avoid getting too caught up in a cold and impersonal approach that may end up alienating customers.