Mapping digital transformation in customer experience
In the fast-moving world of customer experience there is no shortage of new trends and technologies for companies to evaluate and adopt. How do they choose their priorities and ensure that they meet both customer needs and that they gain buy-in from the board?
The Global State of Customer Experience 2016, a new research report from the CX Network, provides some interesting insight into what is happening across the world. Based on the responses of 700 global leaders, largely from the US, Europe/UK and Asia Pacific, it finds that the four biggest investment trends for the next 12-18 months are:
- Customer loyalty and retention (cited by 40% of business leaders)
- The online customer experience (33%)
- Data and analytics (30%
- CRM (28%)
In many ways these priorities have not changed dramatically over time – demonstrating that customer experience is very much a continual progress, with organizations focusing on improving how they operate, deepening engagement with customers and better understanding and acting on their needs. What is changing is the importance of digital channels, and the impact that this transformation is having on how companies interact with customers on an ongoing basis.
The barriers to transformation
When questioned on what is holding back progress, responses fitted into one of two groups. Firstly, there are challenges around justifying investment – demonstrating Return on Investment (ROI), finding budget and gaining board level buy-in. These all point to a difficulty in turning strategy into reality, and building business cases that show the board exactly what improving customer experience will mean in financial terms, whether that is greater revenues or higher efficiency.
Secondly, there are factors around the business, its structure and people. Creating a customer-first culture, competing priorities and engaging employees were all mentioned by over 25% of respondents. So, as well as convincing higher management of the importance of customer experience, it is vital that CX teams reshape how everyone within the day-to-day organization thinks of, and treats customers. This starts with ensuring that staff themselves are well-treated, engaged and have the tools they need to do their jobs, and that the customer journey is not disrupted by departmental silos or barriers.
The different stages of transformation
The move to digital channels is having a fundamental impact on how organizations do business. It opens up new channels of communication with consumers as well as new ways of working that are more flexible and agile. Importantly, it changes the traditional relationship between consumer and business – in an era of greater choice and higher demands, customers have much more power to switch supplier, share their views on social media and impact a company’s overall revenues.
Organizations are at different places in their digital transformation journey, which the report breaks down into six stages:
Currently 12% of companies have no digital plans or strategy. The positive news is that half of these aim to move onto the next stage by the end of 2016, showing an increasing urgency to embrace digital.
Essentially this is the planning stage, where companies are readying themselves to begin their digital transformation journey. 29.5% of organizations are at this point now, but many are looking to move forward, meaning that 21% expect to be at this stage by the end of the year.
3. Early implementation
Beginning implementation can take time, with many organizations starting with pilot projects that can help shape final strategy and unlock further funding by demonstrating ROI. Consequently, there is little predicted change in this numbers in this group from now until the end of 2016 – moving from 29.5% to 30.4%, although obviously some organizations will move forward and others will enter this phase from pre-deployment.
Digital transformation is an ongoing process, with those in the established group having made some headway in delivering benefits, but with the understanding that they need to continue to innovate. 21% of companies currently feel they have an established program, expected to rise to 24% at the end of 2016.
Showing the momentum in the market, this stage will see the biggest growth between the beginning and end of 2016, moving from 4.7% to 15.2% over the course of the year. Factors that respondents mentioned as essential to this jump included:
- Having buy-in from cross-functional teams (30%)
- Learning from others (30%)
- Seeing ROI from current projects (25%)
- Finding the right technology (11%)
The highest category of organization, with well-established capabilities, proven successes and a commitment to ongoing innovation. Obviously, this group is the smallest in the research, but even here numbers are expected to grow from 2.9% to 3.2% of the survey respondents. Moving to this level means having the right culture in place, the technology infrastructure to support the customer journey, and the ability to work across departments, rather than be constrained by their boundaries. As the customer experience becomes even more important, expect more leaders to move to the mature group across every industry.
The CX Network report shows encouraging signs as companies transform their customer experience. However, it also outlines the major cultural and business level challenges that many organizations face. Overcoming these will be crucial to unlocking the benefits of digital transformation, engaging staff and customers and ultimately benefiting the bottom line.