Customer Experience is a Catalyst for Digital Transformation

We are witnessing a dramatic shift in the balance of power between organizations and their customers across virtually all industries. Today's empowered customers have access to more information, choices, and opportunities, redefining the ideal experience. Customers decide what they want and where and how they want it. They now dictate the terms of engagement with businesses.

Today's customers value experiences—selfies, stories, chats, and influence stats grab the attention of digitally empowered consumers, who in turn feel compelled to share their personal encounters. Experience, not price, will be the battleground of the future.

Customers value the flexibility and convenience that digital channels provide. Seventy-six percent of respondents prefer digital interaction with businesses, and 40 percent prefer to chat through social media messengers. Half prefer mobile loyalty programs with personalized rewards. This amount is up 6 percent in just two years.

Digital experiences (DX) represent a revolutionary shift in the company-customer relationship. These driving factors have given a voice to customers, who now expect businesses to rise to the occasion. Digital transformation that leverages the latest applications, analytics, and infrastructure to deliver a differentiated experience is not a luxury but a necessity.

It's also more than just an IT strategy. As a result, businesses must take a four-pronged approach to digital transformation, as seen in Figure 1. While DX garners a lot of attention, it will not be successful without full consideration of an organization's strategy, platform and operations

Digitizing the Customer Journey Across Physical and Digital Worlds

DX is the new heart of customer engagement. The digital and physical worlds are colliding in more than just retail. It's happening across multiple industries and companies. It's virtually impossible to plan for all potential customer journeys because each is essentially a non-linear, self-directed interaction, or micro-moment, across the customers' channels of choice.

It's also not just digital interactions that need to be mapped, but physical interactions, such as phone calls or face-to-face contacts. There are facets of the physical journey that, when tracked, can influence digital interactions.

DX today is increasingly mobile-first, omnichannel, seamless, and connected across all channels of consumer interaction, from retail store, social, email, and voice to SMS, web, and the latest mobile applications, and back-end processes, such as pricing and inventory. This approach is critical for delivering a new generation of customer engagement that goes beyond traditional CRM to deliver a truly effective CX.

451 Research customer survey data shows that mobile options have increased in popularity across the entire customer journey. Consumers increasingly want to interact via SMS, mobile self-service, in-app two-way messaging, mobile browsing, social media, or a mobile phone call to a company representative. At the same time, traditional interaction methods have steadily declined, with a 38 percent drop in home telephone interaction and a 27 percent decline in email use.

Yet, most companies provide inconsistent, disconnected experiences, leading to a disjointed and negative brand impression that creates friction and, over time, erodes loyalty. Companies still treat each interaction or touchpoint as a separate silo, and businesses can have more than 30 application sources scattered across customer, employee, and product data. When we add to that all the new channels of interactions, the result is an IT nightmare across systems, applications, and data repositories. Digital transformation is key to enabling businesses to stop asking customers to adapt to company processes or technology constraints.

It's not just customers' DX that is inconsistent, but also employees. Sales associates, marketing professionals, and customer service representatives are forced to use systems cobbled together from one or more task-specific business applications that usually provide inconsistent data, processes, and user experiences. Consequently, it's important to invest in new applications that can use processes and data more effectively, so that businesses can adjust their CX to align with the digital shift and remain relevant in the eyes of customers, partners, and employees. This can take the form of new apps for sales, service, and marketing.

Customer service agent experiences are also being transformed with new agent desktops that automate processes and provide an intuitive agent UI that guides conversations with the next-best action. The new agent desktop provides not just the contextual information needed to help resolve customer concerns or purchase products, but also the ability to auto-log essential notes and orders quickly and efficiently through integration across all appropriate systems of record.

A powerful digital transformation plan must take into account the organization's digital strategy, customer experience, IT platform, and operational execution. Since CX is a main catalyst in many digital transformation projects, businesses must invest in new technologies and processes to more effectively engage customers, partners, and employees. Ultimately, putting digital tools to work in a transformative way means ensuring that data and insight connect people with the right information and processes that ultimately lead to a better experience for customers. Organizations can digitally transform their businesses to best attract, win, retain, and support customers, employees, and partners by leveraging the latest applications, analytics, and infrastructure to deliver a differentiated experience that is not a luxury but a necessity.

Sheryl Kingstone is research director for business applications at 451 Research.