Customer expectations are outstripping the capabilities of companies to meet them. The problem, according to a range of recent research and opinion, is the lack of investment in digital business models that enhance operational capabilities while creating value for customers. Companies that don’t fully embrace digital transformation will be fighting an uphill battle to keep customers satisfied.
The World Economic Forum said last year how fewer than 10% of companies are economically viable as the world becomes increasingly digital. In Australia and New Zealand, though there are some notable examples of innovative firms, most are lagging in terms of digital and CX innovation.
“There’s an ever-widening gap between how executives view the performance of their organisation in terms of customer experience and how their customers view the company’s performance”, says Anita Bowtell, CEO of Interact Melbourne. “Unfortunately, most companies are not doing enough in terms of digitally enabling their business and adopting innovative business models to close that gap.”
At the beginning of the year Zendesk published a report that used data collected from 45,000 businesses from across the globe. Between 2013 and 2018 the report revealed a significant drop in customer satisfaction and that dissatisfaction is growing amongst most customers.
Jeff Titterton, chief marketing officer at Zendesk, comments, “We are seeing a widening gap between what customers expect and what companies can deliver. Whether you’re a 100-year-old financial services stalwart or a fast-growing consumer tech start-up, your customers are comparing you to the best experiences they’ve ever had.”
The need to become digital
As the World Economic Forum notes, the most successful business model in terms of customer value, revenue growth rates and market valuation – is the digital platform business model. Companies like Amazon, Apple, Alibaba, Microsoft, Air Bnb, Uber and so on, use digital technology to improve customer experiences while at the same time drive internal capabilities around their core operations.
Yet fewer than 2% of established companies and enterprises have adopted it. Most have dabbled to varying degrees with digital experiments and CX strategies, but they struggle to fully transform their business.
Bowtell comments, “Most CX and digital transformation initiatives fail to succeed or move forward due to a lack of direction and sponsorship from the executive leadership team. Fear and risk aversion in terms of making substantial changes to a company that is currently making profits, are quite understandable. This fear to act is compounded by a lack of understanding amongst many executives and board members.”
Leaders need to be educated
Transforming large and very complex organisations that employ 1000s or 10,000s of people is extremely difficult. It means changing the culture, processes, systems and technologies that have been built over the years to operate the business. For an organisation to transform itself requires leaders that understand the potential opportunities that digital transformation can provide.
The platforms that are driving the digital economy are relatively new. Few executives and senior business leaders have operational experience with them. Leaders need to be educated and encouraged to incorporate digital transformation and CX as a very fundamental component of their corporate growth strategy.
Achieving success with digital transformation and CX innovation are a battle. There will be winners and losers. How battle ready is your organisation?