Institute for Business Value

Digital era brings new wave of customer experience lessons

Today’s customers can be disappointed after just one click, making customer experience more complex — and more important — than ever. Changes that come from digital customer experience impact not only customers, but also companies’ strategies, processes, operations and employees. The IBM Institute for Business Value surveyed 1,400 companies and 6,600 consumers to better understand the sweeping effects of digital engagement. Our goal was to help companies avoid common pitfalls as they pursue successful digital transformation of their customer experience. The result? A comprehensive four-part series, “The experience revolution,” that revealed these key lessons:

Avoid false choices

A foundational shift is occurring: the majority of companies surveyed are embracing digital to reinvent their customer experience. Companies across industries are racing to either augment or replace in-person, manual customer interactions with digital ones like mobile apps, virtual reality and voice command (Cognitive /AI). Executives surveyed overwhelmingly cite revenue and increased market share as the key drivers for their customer engagement strategy. Far fewer considered the opportunities for cost reduction and improved loyalty. Yet, digital transformation can deliver both growth and efficiencies. Boxing yourself into one while ignoring the other limits the value digital customer experience can bring to your organization.

By 2017, 86% of surveyed businesses plan mobile apps to enhance the customer experience at their physical locations

Find your North Star

What strategies, methods and measurements are organizations using to digitize customer experience? We uncovered three distinct types of companies, characterized by where they are along their transformation journey. The “Amateurs” are in the early stages of establishing a customer experience mandate for their business.  The “Professionals” are further along with coordinated customer experience initiatives and standards, but they lack an overarching strategy. The “Elites” are far more visionary and have a more advanced approach to customer experience across a number of factors.  Not surprisingly, the “Elites” have embedded a customer-first philosophy into their corporate DNA.

Customers fiercely focused on customer experience do three things differently

Happy employees make for happy customers

How will these new digital modes for customer engagement impact employees’ jobs? Executives told us they expect their workplace will be profoundly different. They plan to revisit their corporate talent strategy, hire people with digital skill sets, introduce new employee responsibilities and incentives, and they believe the shift to digital customer experience will create new career opportunities for their teams. However, despite these expected changes, most companies still don’t include an employee experience strategy in their customer experience strategy.

Execs pursue people with certain digital skills to help them approve customer experience

Beware of digital customer experience disconnects

For many customers, new digital options haven’t lived up to the hype. We surveyed both executives and consumers and we were alarmed to find serious disconnects between why executives thought customers would adopt their digital experiences and what consumers told us motivated them to switch from traditional channels to digital ones. Executives thought consumers wanted more control. But for consumers, control was near the bottom of their list. They wanted time savings more than anything else. Even worse: many consumers who tried companies’ new digital options found them unsatisfactory and would not adopt them.

Consumers cite four top reasons why they are disappointed by digital customer experience

The bottom line: View digital customer experience holistically

Consumers’ disappointment underscores the key message resonating from each report in the series: Instead of approaching digitization as point solutions, companies need to think about digital customer experience as a holistic, enterprise strategy that permeates all aspects of their business.

Could organizations simply launch a few applications to give customers new ways to get assistance or make a purchase? Lots of businesses are doing that. But if digital options don’t alleviate customers’ core pain points, widespread customer adoption is at risk. Eventually, siloed, digital one-offs will become a hodge-podge of touchpoints that are increasingly cumbersome for customers to use, and difficult for companies to manage. Plus, you cannot optimize invaluable, digital customer data if you don’t consolidate it into insights you can use across functions. And if you think hiring good digital talent can solve the problem, think again. These people are in high demand, and they can be hard to find. You might need a whole new talent strategy. When you change your customer experience, you change your employee experience, certainly for your customer-facing employees, but also for others throughout your organization.

Our findings demonstrate that digital transformation of customer experience has far-reaching implications. Companies that exploit this opportunity to strategically and tactically reinvent their business will be way ahead of the game. To learn more, read the full series.

Global Research Leader - Customer Experience & Design, IBM Institute for Business Value

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