Digital Transformation in Customer Experience: What It Really Means

Digital transformation is an intimidating phrase, calling to mind humans being turned into robots in a futuristic dystopia. Digital transformation in customer experience is almost just as daunting: Does it mean an end to the human element altogether?

Of course, it does not. Digital transformation in customer experience just means using digital technologies, from cloud platforms to business intelligence tools to artificial intelligence, to improve consumers’ interactions with a brand and enhance the human element. If you’ve ever bought a product recommended to you on a website, interacted with a chatbot or paid bills online, you’ve already benefited from the digital transformation of customer experience.

How businesses benefit from the digital transformation of customer experience

By and large, improving the customer’s experience also improves an organization’s business outcomes. Brands that make interactions easier, more enjoyable and more efficient for consumers reap increased loyalty, revenue and advocacy.

A customer experience digital transformation can provide brands with other benefits as well. Technologies that automate routine manual processes save brands money; compare the cost of a 24/7 customer service chatbot to that of staffing a contact center round the clock. Customer data platforms, customer relationship management solutions and marketing automation tools provide efficiencies that improve the bottom line while enabling more accurate, quicker data analysis for better decision-making and agility. Other digital technology, such as cloud-based computing, allows for more-secure systems overall.

Key technologies for customer experience digital transformation

A trove of digital technologies exists to help improve CX and, with it, business outcomes. The challenge is less about finding those that will benefit your brand and more about deciding which ones to implement and optimize first.

• CRM and CDP. Perhaps more than any other technology, CRM (customer relationship management) solutions have driven digital transformation in customer experience. CRM software has long been vital for tracking consumer engagement in multiple sales channels. Now AI has turbocharged those capabilities and given rise to the customer data platform. CDPs incorporate data from CRM systems as well as from social media, websites, stores, ad platforms and other online and offline touchpoints, from the top of the funnel to the bottom. By creating a more complete view of consumers and their customer journey, CDPs facilitate more-precise segmentation and targeting along with more fluid cross-channel engagement.

• Predictive analytics. Before AI, marketers used laborious statistical methods such as regression analysis to try to anticipate customers’ future behavior based on their past actions. Now machine learning models power predictive analytics tools that can not only assess more historical data more quickly than humans can, but are also able to detect patterns among data points that people would miss, leading to greater accuracy and insights. In terms of the digital transformation of customer experience, recommendation engines and improved customer segmentation for personalized marketing are two common uses of AI-powered predictive analytics. Fraud detection, credit-risk modeling and inventory forecasting are just a few others.

• AI chatbots. Prior to the incorporation of AI into chatbots in the mid-2010s, the technology relied largely on heavily scripted responses to questions, with a limited degree of flexibility. Now chatbots can engage with people in a manner that more closely resembles true discussions. This enables the technology to handle a wider range of customer queries and to gather information from customers to pass on to the human representatives should customers need a higher level of care than the chatbot can provide. The reduced customer service wait times and resolution times improve CX while reducing costs.

• Virtual and augmented reality. “Trying on” clothes while shopping at home. Seeing how a paint color will look on your walls before making a purchase. Gamifying store displays to engage kids on their devices while their parents shop. These are a few ways brands are embracing VR and AR as elements of digital transformation to improve customer experience.

• CX analytics. A brand can’t improve what it cannot measure. CX analytics tools help organizations gather behavioral, as well as self-reported, customer data. They also analyze the data to better understand customer journeys and identify pain points that need resolving. By incorporating how consumers interact with the brand as well as responses to surveys and questionnaires, CX analytics helps ensure that the digital transformation impact on customer experience addresses consumers’ needs and wants.

Implementing a successful digital transformation of customer experience

An effective framework for implementing digital transformation in customer experience can be broken down into five key steps.

• Research and assess the existing CX. Work with a cross-functional team to map the entire existing customer journey. This includes touchpoints outside of your owned channels, such as review platforms and media coverage. Be sure to use multiple methods of research, from website analytics to customer surveys.

• Design an ideal customer experience, then prioritize the necessary changes. Again, work with cross-functional partners. This serves three purposes. First, it trains the focus on customers’ pain points, not what certain departments might champion. IT might be champing at the bit to invest in VR, for instance, even though marketing can show it’s not something the target audience is apt to use. Second, involving these partners helps to align changes with the overall brand strategy. Finally, it creates the sense of ownership and buy-in critical for successful adoption and implementation.

• Determine which technologies are needed for which use cases. Perhaps you need to incorporate a CDP to enable more sophisticated targeting or upgrade your chatbot to take on more types of customer queries. Or maybe you have the right technology but an ineffective workflow. Given that Gartner research shows marketers use just 42% of the capabilities in their MarTech stack, you might already possess the technology you need for your customer experience digital transformation but have yet to access it.

• Engage and educate employees. Often this step gets a short shrift. Show them how the customer experience digital transformation will improve not only CX but also their own workflow.

• Determine your KPIs and how you’ll measure them. And of course, how you’ll use the data for continual improvement.

Let Material Help with your customer experience digital transformation

Material’s researchers, consultants and technologists have experience honing the customer experience and facilitating digital transformations. By marrying these specialties, we have enabled brands around the world to better engage customers, convert more prospects and increase loyalty while improving internal efficiencies. Contact us today to discover how we can do the same for you.

FAQs

How can digital transformation drive customer loyalty and retention?

From using customer data platforms for more sophisticated segmentation and personalization to incorporating virtual reality into the online shopping experience, digital technologies help create more relevant, more engaging customer experiences. And it’s long been proven that relevancy and engagement are essential to creating long-term customer loyalty as well as positive word of mouth, which in turn leads to a growing customer base.

How can we measure the success of digital transformation in customer experience?

Comparing before-and-after customer satisfaction scores, Net Promoter Scores and levels of customer engagement are all ways to gauge the success of your customer experience digital transformation. Depending on your strategic goals and use cases, you might also want to measure any cost reductions resulting from automation and streamlining, additional revenue attributed to the CX enhancements and employee productivity levels.

Why is digital transformation crucial for enhancing today’s customer experiences?

Manual processes can no longer meet customer expectations regarding personalization, convenience and cross-channel experiences. Nor can many pre-AI technologies. They typically lack the ability to capture and analyze real-time insights and make rapid data-driven decisions, such as those that serve up relevant product recommendations on a website. As more brands invest in digital transformation of customer experience, consumer expectations will continue to rise. Organizations that fail to keep up are destined to lose customers and share of wallet to their digital-first competitors.