Customer Experience in the Digital Age

The digital transformation is the greatest revolution in the global economy since the age of industrialisation. Entire sectors are being turned on their heads, frequently before the established players even notice. Companies will need a comprehensive digital strategy if they want to use digital transformation as an opportunity for renewal, and to avoid being caught napping by this development. The PAC study “Holistic Customer Experience in the Digital Age” interviewed 455 executives from companies in Germany, France and Great Britain to acquire an impression of what this actually means.

Comprehensive digital strategies are frequently lacking

While everyone is talking about digitisation and accepting the process as a challenging market revolution, most companies are nevertheless failing to implement a comprehensive digital strategy. Although 69 percent of the companies interviewed have already defined central corporate responsibility for digital transformation, only a quarter of the study participants are consistently putting their digital strategy into practice throughout the company. The companies are called on to remember that digital transformation is not just affected by internal factors, but also by customers’ external expectations. They are the driving force behind digitisation, voting with their feet to ensure that no industry can hide from the repercussions of this sweeping development.

Digitisation is unstoppable

Smartphones are becoming the extended arms of consumers– remote controls in a digital world. Each year the accumulated online time continues to rise as a dizzying pace. Today, people looking to hire a car are no longer compelled to go to the next rental firm, and can instead use a car sharing app on their smartphones. Anyone who prefers not to drive themselves will turn to MyTaxi or Uber. While the German startup MyTaxi merely translates an existing industry into a digital service, the American provider Uber goes a lot further, replacing the traditional business model with an entirely new vision. These examples from the world of mobility illustrate the dynamic and sweeping change that digitisation brings to existing markets. They also demonstrate that digital transformation is unstoppable: any industry that fails to actively initiate its own transformation will simply be overwhelmed by external forces. In consequence, even market leaders in flourishing industries might find themselves upstaged, or marginalised entirely.

Digitisation is changing consumer behaviour

Not only has our daily access to the digital world of the Internet brought substantial changes to our consumer patterns; it has also strongly influenced the expectations we place in companies. Consumers are able to encounter their brands, and to receive a consistently positive customer experience, at any time, wherever they happen to be: and they certainly want it. Ultimately, this puts their loyalty to the test, as it only takes a simple click to switch from one brand to another. Hence, customer experience becomes a key factor of corporate strategy in the digital age. Roughly 70 percent of the companies interviewed as part of the PAC study have recognised this truth, and are dealing with customer experience as a top-level priority. Another 21 percent also perceive the need, but are yet to put any practical steps in place.

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Company decision makers have defined customer experience as a top-level priority

Nevertheless, roughly half of the companies are having a rocky ride when it comes to strategic implementation throughout the company, beyond the realm of mere marketing. Although 53 percent have already initiated a holistic customer experience strategy, 36 percent of them have done no more than analyse what needs to be done. Indeed, 12 percent believe nothing needs to be done.

Customer experience spreads beyond the checkout counter

A holistic customer experience strategy is defined by its interdisciplinary structure– involving more than just the company departments asked to deal directly with customers. Although the interviewees agree that these departments possess greater clout, they must not be held back by other areas that operate unseen by customers. For instance, only 21 percent of those interviewed believe the IT department is particularly important to customer experience. Nevertheless, it impacts significantly on the operative involvement of other areas considered essential, among them customer service or billing.

Individual fields of work must collaborate within a smoothly organised and well-oiled structure in order for an interdisciplinary strategy to take hold. But the answers given by half of the study participants indicate this remains a problem. Collaboration between the departments to produce a holistic customer focus is persistently inefficient. 65 percent of the companies do not have a central position responsible for this area, tasked with ensuring a uniform customer experience across all touchpoints.

Europe’s companies are facing a structural challenge when it comes to the topic of customer experience

Europe’s companies are facing a structural challenge when it comes to the topic of customer experience

One contributor to the currently substandard degree of collaboration may be that responsibility for customer experience, as things stand, is largely organised without a central function. Only 14 percent of the companies participating in the study employ a customer experience manager, or have installed a relevant department. 30 percent of the companies have merely foisted responsibility onto one of the traditional departments, mainly marketing, sales & commerce (55 percent), followed by customer service (25 percent). Indeed, almost two thirds have neglected to create a new position, and 58 percent of the companies state they have no plans to do so in future.

Responsibility remains a murky question in most companies

Responsibility remains a murky question in most companies

There is a also clear need to buck up ideas in terms of how customer interaction is organised. Although 80 percent of decision makers perceive customer interaction across the various channels as a crucial task, fully 60 percent of the companies remain in a stage of early development in this area. Here, the low participation afforded to IT in respect to responsibility for customer experience is almost certain to have a deleterious effect.

Data silos put the brakes on innovation

The inadequate involvement of IT creates yet another problem: in most European companies the study identified data silos that need to be eradicated. For instance, many companies use several IT systems that all generate customer data while remaining insufficiently interconnected and without any meaningful system of communication. Half of those interviewed are aware that they will have to establish an integrated IT system that incorporates all data produced throughout the customer journey, yet 43 percent of those interviewed believe IT has a less conspicuous role to play.

Data silos may well inhibit customer experience

Data silos may well inhibit customer experience

Important company areas are starved of valuable data without an integrated IT system. For instance, the study demonstrates that only one quarter of the companies provide all departments with customer contact history from the online and offline touchpoints. The availability of customer profiles (21 percent) is even more restricted. Every tenth company included in the survey does not even record customer history. These companies will be entirely unable to create a customer experience worthy of the title ‘holistic’.

Summary: the digitisation of our societies represents, in equal measure, an opportunity and a challenge for companies. Besides the sweeping change processes that digitisation brings to entire industries, the focus has again switched back to the customer, who is now able to enter into contact with brands at any time in a digital or analogue environment. Although this is an immense opportunity for companies, it will remain untapped unless they can deploy a convincing customer experience across all touchpoints. An absence of anticipated customer experience will merely precipitate a quick and simple switch to a different brand. It follows, therefore, that customer experience will occupy a key role, and will become one of the main unique selling propositions in competition with rivals on the marketplace.

(This article originally featured as part of an Upload Magazine “Customer Experience” special powered by Adobe)

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