Digital transformation begins with the customer!

Article added on 7 November 2014

Success in the digital world requires a smart combination of 'customer experience' and a sharp price (‘operational excellence’). It needs a strategy that stands firmly on its two legs.

Digital transformation

Customer experience and journey

Digital transformation begins with the customer! Starbucks is a good example of a company that wins on customer experience. They sell coffee, but in an unprecedented number of variations and sizes, with good and fast service and a modern atmosphere. You can get coffee anywhere, so Starbucks competes mainly on service, atmosphere and other amenities such as Wi-Fi internet access. It also depends on customers making recommendations. This is a pattern that you will see quite often. Product and price are easy to copy, the other factors and the overall concept much less.

Customer experience is about customer satisfaction, about emotion. How do you know what the customer thinks of  your business and your products and services. You will have to consider the entire 'customer ‘s journey'. What are the crucial moments and what determines the customer satisfaction? Starting from the exploration phase, moving to the purchasing decision phase and next to the operating stage, in which, for example, service is needed.

Not so long ago it was clear: make sure through advertising you acquired a strong brand and reputation. For example, when considering buying a TV, you first chose the brand (Philips, Sony, Samsung?), then the product, the type and the price. The shop played an important role in the transfer of information. If you were a really serious person you maybe consulted a few tests, but then you made your choice. After the purchase there were typical 'cognitive dissonance' advertisements, which confirmed you made the right purchase of your lovely, but o so expensive, BMW, Rolex or 'whatever-product’. What you actually did think about it yourself was much less relevant to the provider.

Zero moment of truth

This pattern of 'product push marketing' no longer works. The customer searches through his smart phone, internet and social media for information and product’s reputations. He pays particular attention to what people say about the product they’ve just bought. Are they excited about it? What do they like about it? That - subjective - information plays an important role in the buying decision of new customers nowadays. Together they create a kind of 'zero moment of truth'. Your company or organization should be visible and perform well in the exploration stage, on the internet and in the social media. That demands clever design of the digital touchpoints with the customer. Do they cover the customer journey and do they address the personal needs and attitudes of your potential customers?

Knowing your customers

Many companies and organizations have problems with the new transparency. They complain about customer expectations which are always changing and about unpredictable customers. The new CEO of ING, Ralph Hammers recently said: "We must improve our analytical skills to better understand our customers and be able to think further than traditional banking." With more information and new technology (big data, data analytics) ING wants to reinvent the bank and migrate to new business models.

Gathering more information about the customer is a logical step. Companies collect and search for all kind of data and behavior patterns and construct profiles. CRM systems and business intelligence can be valuable allies. Amazon has understood that in an early stage apply their famous ‘customers-who-bought-this-also-bought….’. But is that enough in the digital economy? Do we connect well to the customer journey and the possibilities of digital channels?

Collaboration and co-creation 

Dutch Knab bank, the digital bank under the AEGON umbrella, goes a step further to obtain and maintain the confidence of the customer. They have adapted their services. They consistently work from the perspective of the customer. They provide the customer with information, analysis and advice. But more importantly, they are constantly in contact with the customer. What is valuable to the customer, what is his appreciation of things, what could be improved. And they adapt their services if required. Thus, they co-create with the customer (and other stakeholders). You then have an involved and enthusiastic customer. There is not just an annual customer survey, but a constant reconciliation between what customers want and what the company provides. Digital technology makes that bidirectional communication possible. That’s the big difference with the past!

Looking at it this way, customer experience requires more than just touchpoints, websites, apps, digital processes and extensive customer data. It is a different way of working, a different attitude, a different culture. The company must show leadership. From having the best product – which sells itself - to continuous interaction with the customer is quite a big leap. Such a cultural change will succeed only if it is widely adopted and supported.

Our 3-day training Digital Business pays attention to all the aspects of digital transformation. But success always starts with creating great customer experience and delight!

Harm Spoor 

Principal consultant and

lecturer of the master classes Digital business and Business IT strategie.