Transforming the Customer Experience Through Continuous Innovation
Digital Changes Everything
As the long-term annual growth rate of the U.S. economy slows from its historic average of 3.4 percent to about 2 percent, today’s companies face growth strategy challenges. Eroding profits, stagnating growth, customer attrition, and a failure to meet stakeholder/investor expectations await unless businesses can stay ahead of the competition.
While the U.S. economy is sluggish, consumer expectations—fueled by constant exposure to digital technol-ogy—are high, putting pressure on companies to continually evolve the customer experience to retain customers and attract new ones. A 2015 survey of 500 C-level middle-market executives conducted by the National Center for the Middle Market found that 63 percent of respondents said that converting information to a digital format is very or extremely important relative to other business priorities. The ability to deliver a rich customer experience is a key driver of this change, as businesses realize that the methods used to engage customers need to be of the same high quality as the product or service they provide. A company’s digital customer experience needs to complement its brand. Anything less is a risk to the business, as customers quickly lose patience with poor customer service. Put simply, a well-executed digital customer experience is a business strategy imperative.
Digital Customer Experience 2.0: A Business Imperative
Successful digital transformation centers on building customer intimacy to drive engagement, and the key to building customer intimacy is to deliver superior DCX. The case for customer experience is simple. Every time customers interact with a business, what are generally called “touchpoints,” they form impressions. When these impressions are aggregated, they form experiences. By placing customers at the center of the business model and crafting engagement and servicing systems to deliver desired customer experiences, companies build a strong competitive advantage that pays off. Forrester Research proves just that: Better customer experience drives revenue growth.
Understanding Customer Expectations: The Key to Superior DCX
Delivering better customer experiences has become an imperative to business success. Complications, though, arise when businesses try to understand what constitutes a better customer experience. Different studies point to alternate sets of experience attributes that matter more than others, depending on the characteristics of each industry and the target or current customers. Above all, there are five universal attributes that define better customer experience:
Today’s customers are more diverse, more connected and more powerful than ever before, making identification and micro-segmentation one of the most important and challenging tasks. Although companies may think they know their customers, a recent IBM and e-consultancy study showed that 80 percent of consumers think that brands really don’t know them as individuals.
Most customer interactions happen during a multi-event, multi-channel journey. As customers switch channels, they expect to receive the same level of quality. Customers get frustrated by inconsistent experiences. American Express research found that a whopping 78 percent of consumers bailed on a transaction or intended purchase because of a poor experience.
According to Forrester Research, 77 percent of U.S. adults say that valuing their time is the most important thing a company can do to provide them with a good experience. Whether it is an FAQ section that provides instant answers to basic questions, or a live chat feature that eliminates long wait times, today’s consumers expect instant answers and fast resolution.
Companies that help consumers simplify the purchase journey have customers who are 86 percent more likely to purchase their products and 115 percent more likely to recommend their brand to others, according to Infosys research.
- Consumers are acknowledging that businesses can influence shopping behaviors by delivering relevant messaging and making shopping experiences more personal. Infosys reports that 86 percent of consumers say personalization plays a key role in their purchasing decisions. In exchange for personalized offers and services, consumers are willing to share personal information, provided they have control over it.
Road Map to DCX 2.0: Accelerated, Rapid, and Agile
To take DCX to the next level, companies should start small, be agile, and move fast.
When developing a DCX 2.0 strategy, customer base, and overall business goals, companies should keep in mind the five universal customer expectations—identity, consistency, responsiveness, convenience, and personalization—as well as the objectives of effective customer touchpoints. The steps outlined below explain the path from strategy to action.
Step 1: Assess current state of DCX via accelerated learning. First and foremost, businesses need to understand where they stand versus customer expectations. Accelerated learning exercises help companies understand how universal customer needs apply to their unique business environments, as well as customer engagement and servicing models. Coupled with digital infrastructure assessments conducted remotely, decision makers can obtain fast and accurate outside-in and inside-out views of gaps in their infrastructure that may prevent them from delivering better customer experiences.
Step 2: Develop effective customer touchpoints using rapid design workshops. Once gaps are found, companies need to design customer touchpoints with specific, and often tailored, digital capabilities that meet targeted customer needs. This process benefits from the input and guidance of designers, technologists, researchers, analysts and business practitioners. Rapid design workshops use experience design toolkits and remote collaboration technologies. This allows business and functional teams to develop blueprints of future experi-ences of customer touchpoints, gather and prioritize functional requirements, and design execution road maps, all within timeframes that would have been unrealistic years ago.
Step 3: Execute strategy using a continuous innovation approach: Companies need to get past traditional, sequential development approaches. Instead, they need to embrace agile methods that promote adaptive planning, evolutionary development, early delivery, and continuous improve-ment, while encouraging rapid and flexible response to change. Agile development allows companies to develop solutions with the “absolutely required” features, release them, and keep improving them based on frequent, even continuous feedback from customers and users. Doing so prevents businesses from overinvesting in unnecessary digital capabilities or underinvesting in table stakes features.
By the end of 2016, 89 percent of companies expect to compete mostly on the basis of customer experience, versus 36 percent four years ago, according to Gartner research. This experience is no longer about usability and ease, but also about connecting, inspiring, engaging and creating with customers. Providing superior customer experiences without huge investments requires effective customer touchpoints that are identity-driven, deliver convenience digitally, accelerate outcomes, reduce effort, and leverage informa-tion to deliver personalization. Above all, businesses must design and execute rapidly while staying open to continuous feedback from customers and users. Leading companies around the world understand what customers want from their omnichannel journey, and provide a personalized customer experience. The future demands it.