Most of the digital transformation concepts state that the main motivation is to have a better customer experience. It really makes sense that all the transformation in business models with all operations, supply chains, even suppliers, and all other pillars should serve to improve the customer experience. But what does customer experience (CX) transformation mean to itself? Why should we consider CX instead of customer satisfaction? Why is digital the key to achieving this? Understanding the CX is crucial to understanding the new generation of business models.
What is Customer Experience(CX)?
In short, CX means a “customer-first approach” throughout the journey of each buying process. It refers to the overall experience a customer has with a company, including all touchpoints and interactions.
When we talked about the Customer Experience design, there are some questions to ask:
How many different channels do you reach your customer? How quickly are you able to interact with your customer? How do you empathize with your customers? What are the social opportunities you serve your customers? How easy is it to buy your products or services? How do you position them? How can you personalize them? What about your customer service? How fast can you catch the trends or lead them? How can you contribute to your customer’s digital identity? Are your products looking good on social media? Can you catch the personalized expectations? At the end of the day, are customers satisfied with working with you? Are they happy shopping with you?
So the customer experience is not only about the product or service itself; it is about the entire buying lifecycle.
Companies should rethink all their operations to support this concept within the company and among all stakeholders in the supply chain. Also, the organization itself should adapt, and the culture should support this approach. Why? Because it is the key to new business understanding and competition. Companies can improve customer satisfaction, loyalty, and retention rates by improving their customer’s experiences. This can ultimately lead to increased revenue and profitability for the company.
1. Customers who enjoy positive experiences are likely to
2. Customers who enjoy positive experiences are likely to remain customers for five years longer than customers who had negative experiences. [2]
What are the obstacles?
Shifting to a customer-centric mindset is not a simple decision, and it’s not a one-time process. It requires a new understanding, a significant shift in organizational culture, a redesign of business models, and a lot of motivation to ensure the consistent delivery of positive experiences. Moreover, all these subjects should be a continuous understanding.
Instead of traditional input-output models, all departments should work in harmony. Every employee should understand and be part of the new approach. This is where the transformation comes. Transformation is always tough because it requires challenging the current state, existing business models and comfort zone.
Another important fact for CX transformation is the technology itself. We are living in a technology-centric world and it changes everything including the CX. So is technology a threat or an opportunity? It depends on your approach. If you can’t benefit from it, if you can’t see the opportunities created by technology and innovation, only threats remain. The greatest risk is your competitors who can turn these opportunities into customer value. That leads us to the next and the important section.
Role of digital transformation in CX
According to research, people spend 3–5 hours a day on their smartphones. If your customers are on digital that much, it is obvious that you should be there somehow. You should be on your customer’s cellphone, tablet, watch, self-driving car, or even connected home appliance. We are in an IoT (internet of things) world, and new capabilities of connection are increasing day by day.
This hyperconnected world has new threats and opportunities. Your customers can share their good or bad experiences on social media and reach large communities. So if you are good at CX, it’s good; if you are not, it’s too bad for you.
Another crucial fact about digital capabilities is the power of big data. The hyper-connected world has been creating so much data. If you can collect and analyze them, then you can understand the upcoming trends, your customer’s behaviours, and the new opportunities. By doing this, you can create a trendy or personalized experience for your customers. This is what your customer really wants.
We mentioned just some foundational relations between digital and CX. There are always new and popular trends on the table; some of them have big potential and some of them do not. Or the time is not coming for them yet. For instance, in 2019-2020 metaverse was very popular and many companies invested in the metaverse. It was very popular at that time and offered a completely different experience. In 2023, it is not that popular, but we talk about AI-based chatbots and digital assistants. Nowadays we are not talking that much but we know that blockchain technology is improving and will create new opportunities soon. It can reshape the customer experience such as metaverse, NTF or others.
So, digital is one of the biggest drivers for CX. Therefore, companies are investing more in digital technologies to enhance their customer experience and stay ahead of the competition. As technology continues to evolve, we can expect even more digital enablements to emerge in the near future.
[1] Customer experience is the future of marketing (Deloitte, 2015)
[2] The Value of Customer Experience, Quantified (Harvard Business Review, 2014)
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