Businesses across multiple industries are feeling the heat from disruptors who are using digital to revolutionize how customers interact with brands. Armed with these new experiences, customers are becoming increasingly impatient with incumbents who don’t keep up.

Helping customers easily find what they need, simplifying signup, driving personalization and streamlining access to support – across all channels – is now critical to retain customers. Increasingly, the way customers experience a product or service is as important as the product or service itself.

Technology has always enabled companies to reinvent how they engage with customers. But now we are seeing a profound shift: the convergence of physical and digital customer interaction. This leads to new, often disruptive experiences that can quickly supplant incumbents and shift the competitive landscape of industries.

To better understand these emerging dynamics, the IBM Institute for Business Value (IBV) surveyed 338 C-suite and customer-focused executives across multiple regions and industries.

The findings in this report–the first in the IBV Customer Experience study series–offers an assessment of the current state of play in this experience revolution and the digital technologies that are gaining the most traction. We also explore the intricacies of building a business case for digital transformation that looks at the range of benefits digital can bring to an organization.

As organizations consider the implications of this physical/digital reinvention, they should focus on more than just the enhancements to their customer experience (CX); they should also consider the potential for more efficient processes, reduced costs and invaluable data that can provide insights for continual improvements.

The race to revolutionize CX

Forward thinking companies have always pushed the boundaries of technology, insights and design to reimagine the experiences they want customers to have. Today, we are crossing a new threshold as businesses from all types of industries adopt a host of digital technologies that are reinventing how they interact with customers across physical as well as digital environments.

This is leading to innovative, often disruptive experiences that can quickly supplant incumbents and shift the competitive landscape. For example, instead of buying a car that’s sitting on a dealership lot, customers can now use a virtual showroom to view a car in 3D, customize it with a click of a screen, and checkout with a swipe of their smartphone.

Mobile apps and payments, IoT, wearables, voice command—these new capabilities are fundamentally changing how people interact and transact with brands and businesses everywhere.

Companies across all industries are building their playbooks to address this shift and the challenges they face. The game is shaping up fast, and most companies are playing hard to win. In doing so, they are also discovering new rules along the way in areas such as the teams they need to build and the goals they need to set.

Companies need to think more broadly about experience

Why are companies focusing on digitally enhancing the customer experience? The reason comes through loud and clear from our survey respondents, who overwhelmingly cite the need to drive revenue by attracting new customers (62 percent) and increasing share (57 percent).

Far fewer see the goal as cost reduction, or even a chance to improve loyalty. However, we see this as a false choice. On the practical side, in a world of online price transparency and rising marketing costs, thinking about cost and customer retention is critical. More fundamentally, many of the disruptions caused by digital reinvention come from a rewriting of the rules.

Companies used to talk of “deciding what you wanted to be known for,” with an implicit assumption that you had to choose between delivering a great experience or a low-cost service. Providing a great experience implicitly implied a higher cost. Today’s winners think differently.


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Philip Dalzell-Payne

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, Global Partner, IBM iX

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Originally published 01 February 2016