Successful digital transformation can prove to be elusive for business leaders who do not have a holistic view of their business and the customer journey. This may prove to particularly critical for enterprises in the wake of the COVID pandemic as the move to all things digital accelerates.
Digital transformation refers to the integration of digital technology into all areas of an organisation resulting in fundamental changes to how the business operates and how it delivers values to customers. All too frequently, however, it’s viewed narrowly as a means to improve operational efficiencies.
Vicky Katsabaris, head of customer experience solution and strategy, Qualtrics APJ, comments, “Traditionally businesses have always thought of their customers as separate to their organisation, and subsequently don’t account for them when undergoing a digital transformation. The unfortunate reality is that too many companies simply see digital transformation as modernising their IT stack. This can have a negative impact on the success of any organisational-wide change.”
The real benefits from digital transformation accrue when the business puts the customer experience at the centre of their digital initiatives. A study by MIT revealed that companies that focus equally on transforming the customer experience and on achieving operational excellence significantly outperform their peers, earning net margins that are 16 percentage points above their industry’s average[i].
“Digital transformation has the capacity to reimagine the ways in which we deliver customer value, but it can only be done if we understand our business from the customer’s perspective”, says Katsabaris.
Understanding the customer journey
The customer journey describes the path of sequential steps and interactions that a customer goes through with a company. It’s a sum of all experiences across multiple touchpoints. A sound understanding the customer journey is critical in undertaking a digital transformation project as it helps identify what needs to change and how to change it.
Katsabaris comments, “By not taking the customer journey into account when digitally transforming, a brand misses the chance to become a faster, leaner, and more competitive organisation. It can also expose businesses that have under-invested in their digital transformation or invested in the wrong tools that deliver poor returns.
For Heather Paterson, country manager ANZ for Medallia, attempting digital transformation without understanding the customer journey is like building a house for someone without ever knowing what they want and expect. She comments, “Consider the relationships you have with the many brands you engage with and the types of interactions you have at different points in your journey. Some are quick, some more complex and some you just wish you didn’t have at all. The type of interaction will more than likely influence the channel in which you will default to, to serve that need”.
“How does the business ensure that the right capabilities exist within each channel to meet the customer’s expectation, and how can it create a seamless bridge between channels as customer needs change?”
Understanding and mapping the customer journey allows the organisation to identify the points of friction customers experience across the various touchpoints they use. It provides a picture of the business and of how customers perceive it. This picture can then inform a digital transformation initiative about what needs to change or be added so as to improve the overall experience of customers.
Holistic view of the customer
Most organisations face challenges, to varying degrees, with their data and being able to use it to understand their business and their customer’s journeys. Making decisions about the business and one’s customers without accurate and complete data is potentially dangerous. For some the situation is monstrous and frightening, as Paterson points out, “A frankenstein of financial, operational, transactional and customer data is often scattered across the organisation – residing in legacy systems, pieced together in data warehouses, or worse, sitting in spreadsheets!”
She warns, “When working with fragmented silo’d or unstructured data, making business decisions is both difficult and risky, and it’s further compounded when looking to transform a digital landscape with new streams of analytical data, volumetrics and profiling that further muddies the water”.
Clean data is vital to effective and informed decision making. Accurate journey mapping requires direct input and feedback from customers about their experiences. Paterson advises, “Leveraging the right technology to collect, unify and analyse all of this data can provide the “leg up” needed to inform the right decisions at speed. Today’s technology platforms for doing this are leveraging AI and making it easy and fast to understand what customers are experiencing across all channels and where the organisation needs to improve”.
According to Katsabaris organisations have relied too much on operational data, such as number of website visits, to base their decisions and transformations. Though it may provide useful insights it does not provide a complete picture. A business may understand which touchpoints a customer is engaging with or not, but it will be left in the dark when dark about why. They haven factored in customer feedback or data regarding customer sentiment in response to their experiences.
Katsabaris says, “With better analysis and understanding, brands can detect experience gaps before they become issues and put in place solutions that ensures feedback is addressed to deliver meaningful action. By ensuring employees have the right tools and insights, brands can optimise customer experience by pinpointing customers’ unmet needs, preferences and pain points throughout their customer journey.”
Digital transformation should be about improving the
customer experience just as much, if not more so, as it is about improving
operational efficiencies. By incorporating an in-depth understanding of the
customer journey, means the organisation can create frictionless experiences
that add value for customers as part of the transformation.
[i] https://www.bcg.com/en-au/publications/2019/transform-customer-journeys-scale-transform-business