Digital transformation in customer experience
A company’s digital transformation strategy should also consider the customer experience |
| Most businesses, no matter their field or focus, would benefit from DX for CX, whether that means websites that automatically reconfigure to suit unique user preferences or AI-powered chatbots that deliver standardised service across a multichannel network. |
Digital transformation (DX) can be seen at every stage of modern business architecture, from the way employees organise and communicate to the way goods are manufactured and delivered. According to the IMF, 65 per cent of global GDP will be digitised by 2022, while the DX industry is expected to increase at a compound annual growth rate (CAGR) of 16.5 per cent to 2025.
But DX is not just about improving internal functions — such as the online meeting rooms used during lockdown or the 3D printing technology that produces complex items at low cost. Increasingly, it’s also being employed to help companies understand and serve their customers better. In a world where consumers demand, and can expect, more than just well executed goods and services, DX and customer experience (CX) go hand-in-hand. Here’s how you can employ DX to achieve better CX and ensure your efforts don't go in vain.
Most businesses, no matter their field or focus, would benefit from DX for CX, whether that means websites that automatically reconfigure to suit unique user preferences or AI-powered chatbots that deliver standardised service across a multichannel network. But relying on technology to meet the nuanced needs of your customers isn’t something that just happens overnight. You’ll need a data-driven, humanistic strategy that can be implemented with speed, precision and ease to add value where you need it most.
Building a DX Strategy
As much as 70% of organisations claim to have, or be working on, a DX strategy. But before you even think that far ahead, you’ll need to know what you’re starting with and what you’re up against. Audit your current processes and procedures and calculate what you know, don’t know, have and need. Prioritise the problems that require the most attention before looking at your competitors and honestly assessing where they’re excelling and underachieving. Finally, shop around and experiment until you find the technologies that will put you ahead of the pack. Once you know where you are and where you want to go, you’ll be able to set realistic goals and plot out a road map for meeting them.
But don’t expect the road to your bright digital future to be bump-free.
Some technologies may feel cumbersome or complex at first, and it can be a steep learning curve for both individuals and organisations as a whole. There’s also no guarantee of instant success, so strategies will need to be well thought out, skilfully implemented and carefully monitored. Be prepared to scrap a strategy and start again from scratch if you don’t get the results you expect.
The good news is that once you’ve started on the road to DX, any change of course or future tweaks will be easier to implement. A welcome byproduct of digitalisation, big data will ensure the decisions you make going forwards are powered by analytics and insight.
Measuring success
Global businesses are projected to pump a whopping US$2.8 trillion into DX by 2025, and CEOs, of course, expect a return on their investments. According to Gartner, however, almost half of organisations have no metric by which to measure DX.
Companies undertaking DX would expect to see an improvement in business efficiency once a technology has been successfully implemented. Managers will therefore need to measure how these new digital assets are being used by employees and customers to determine whether they’re proving value for money. The most important metric to look at is arguably adoption rate. Anything above 80 per cent should be considered a success, anything below 50 per cent indicates that the software may not be a good fit, and anything in-between suggests more attention should be paid to implementation.
Other KPIs to measure include active use of the software, changes in exit and bounce rates, employee and customer satisfaction, productivity and, of course, revenue. For example, if you invest in a technology to help you handle customer queries, track whether the number of support tickets your team closes increases. If that’s the case, ask if the system is simply speeding up the process or allowing employees to optimise their work hours, stay engaged and respond more strategically. Ultimately, you’ll also want to know whether overall customer satisfaction, and therefore brand sentiment, has improved.
Remember, however, that investments and results may not grow in perfect unison. While companies that spend small on DX are unlikely to reap high rewards, others may be in danger of over digitalising, where increased spending serves up diminishing returns. The trick is to find the sweet spot where the technology works as the oil on the wheels of business as opposed to a dead weight that impacts agility.
Proper implementation
All organisations starting down the road of DX need to be pragmatic. Success won’t come overnight and will ultimately depend on the people most affected — employees. DX may impact your workers positively or negatively, but it will not be achieved without them.
While the technology will need to be robust and user-friendly enough to encourage all workers to change their habits, it’s important that companies lead from the top and actively demonstrate their commitment to improving CX through DX. According to McKinsey, organisations with an engaged CDO are 1.6 times more likely to be successful in DX. Nurturing a culture that encourages innovation and experimentation is also imperative. Employees should be empowered to celebrate early wins and fail without fear.
Business efficiency is important at any time, but especially during times of great change and challenge. Those with a DX strategy that successfully optimises CX should find their workers, employees and bottom lines benefit.
Managing rapid change
Few people welcome change which is precisely why businesses should prioritise change management |
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That’s what a change programme is for - to guide your people through the change, helping them to better understand and come to terms with it. In fact, people and their motivations for change are said to be one of the biggest wildcards in business change initiatives. |
It’s human nature to dislike or fear change, because with it comes the risk of losing control. So, when a business undergoes change, such as a new piece of technology being implemented, it’s important to follow an organisational change programme. Your people need to be eased into the ‘new way of working’, not thrust into it.
In many cases, resistance to change happens because of a lack of information. People don’t understand the reason for change so they start to wonder:
- What am I going to have to give up?
- Will this compromise my role and skillset?
- What will it mean for me?
That’s what a change programme is for – to guide your people through the change, helping them to better understand and come to terms with it. The more they know what’s going on, the better. Information is power, after all.
But what if change happens rapidly and you don’t have the right information on hand? Perhaps you’re as in the dark as your team will be. What if something unpredictable and out of your control happens that disrupts the landscape, such as a global pandemic or another business that you didn’t think could end up being a competitor but suddenly is?
If that happens, what do you do next?
Rapid change is hard to manage
As reports of well-known household names struggling to cope or falling from grace suggest, longevity doesn’t guarantee survival. Many business leaders are realising that their organisations aren’t equipped to navigate today’s fast-changing environment and the challenges that it brings.
There are various methodologies you could follow. For example, Prosci’s ADKAR model suggests:
- Awareness of the need to change
- Desire to support the change
- Knowledge of how to adopt the change
- Ability to implement the skills and behaviours key to change
- Reinforcement of the change to ensure it’s adopted and sustained
In the case of rapid change, you may not need to focus as deeply on the Awareness and Desire stages. People will typically understand the brevity of the situation and why it requires urgency.
Reinventing The Organisation by Arthur Yeung and Dave Ulrich presents a six-part framework that could also help:
- Environment: monitor and anticipate changes in your business landscape
- Strategy: it’s not just about market share; create market opportunities and allocate resources accordingly for this
- Ecosystem capabilities: share information within teams and departments so you can become truly customer-centric and boost agility
- Morphology: create new organisational forms so your talent can adjust to market changes on demand
- Governance mechanisms: stay connected at all levels of the business and facilitate cross-functional collaboration
- Leadership at all levels: build and encourage leadership so everyone can take initiative
The framework focuses on building a ‘market-oriented ecosystem’ – one where an organisation prioritises its customers over internal systems and processes.
Results will not only be achieved through internal efficiencies and capabilities. The key is to align and facilitate collaboration between your broader network of teams, departments and partners (internal and external). This is what will help you respond more quickly to the changing market.
Projects or programmes?
According to Prince2, a project is ‘a specific, single task that delivers a tangible output, while a programme is a collection of related projects’.
A project is shorter term. It has an end, an intended goal and a defined timeframe. Tasks tend to be technical and they produce an output, such as improved product quality and customer satisfaction.
A programme is usually longer term, with no fixed deadline though still with intended goals. Because of their longevity, programmes are usually adjustable and serve multiple functional units with tasks that tend to be strategic. Output is often an outcome and the benefits are long term, such as ROI or realising new value.
That’s why we refer to a change programme rather than a project. Change is dynamic – timelines, goals and outcomes can vary depending on the maturity of the organisation and the extent of the change itself.
The small steps towards effective change management
Change management revolves around your people – everyone who will experience the change but especially those who will be impacted. You must always keep these stakeholders front and centre. Do this by understanding:
- How the change will impact them, from their roles to the way they perform tasks
- What’s in it for them? In other words, understand the parts that will make them care
- Their emotions – this will help you better connect and engage with them
- The most appropriate communication channels – then communicate your change messages early and often
The final point in the above list is important. Communication matters when it comes to business change. According to Gartner, more than 80 per cent of organisations manage change from the top down. But change is most likely to be adopted, embraced and sustained when employees are on board rather than just the executives.
In fact, people and their motivations for change are said to be one of the biggest wildcards in business change initiatives.
So, this is where you should focus.
That’s not to say your leadership buy-in isn’t important. Strong leadership is crucial for successful change. But don’t neglect the power of your middle management teams. They’re the people who are best placed to communicate and promote your change vision to the wider business.
From this, you can begin to build change agents. Role and seniority don’t matter here. The key is to empower people across your organisation to become positive change agents and encourage others to follow in their stead.
Adapting to a changing world is a challenge. But when you’re following the right approach (plan for change, engage your stakeholders, create tailored change journeys and measure the change), you can ensure your programme is a success.
Iterations of disruption
By getting the nitty-gritty right, incumbents can eventually jump on the innovation bandwagon |
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But while technological disruption is coveted, it’s in the best interests of businesses to minimise social disruption and ensure the stability of the environment they operate in. |
The taxonomy of innovation is anything but clear-cut. To give an example, some regard the iPhone as the paragon of radical innovation, which turned the world on its head by squeezing a computer into a mobile phone. Some use it to illustrate architectural innovation, which combines already existing inventions into a novel product. Still others like to see the iPhone as the prime example of disruptive innovation – an expression coined by Clayton Christensen, author of the seminal The Innovator’s Dilemma (1997), which has come into its own only in the past decade.
Although journalists and marketeers tend to use the word “disruptive” indiscriminately, Christensen linked its use to strict criteria. Disruptors start out by identifying a market segment overlooked by incumbents, which they target first with inferior products to get a foothold, before moving upmarket in the next stage. Despite having limited resources, these “low-end market encroachers” are excellent at recognising unmet customer needs, which they satisfy by making sophisticated products more accessible and affordable for everyone. Although taxi drivers losing revenue to digital ride-hailing firms may think otherwise, Uber doesn’t qualify. Whereas Netflix, which started as a DVD-by-mail service, is a textbook case – by now also fulfilling the requirement of being mainstream.
How can incumbents reinvent themselves in an era obsessed with innovation?
In an age where Davids are all the rage and incremental innovation has fallen from favour, Goliaths need to give a lot of thought to how they can make themselves sexier while dodging the stones slung at them by agile start-ups.
As Kyle Nel, Founder and CEO of Utah-based transformation company Singularity Labs said in Harvard Business Review, “large organisations have just as much right to play into the future […] as these kids in the garage.” But their modus operandi, based on hierarchies, procedures and tight budgets, is no breeding ground for disruptive business ideas.
Although they have all the necessary human and financial resources to out-innovate anyone, the kind of agility, flexibility and inventiveness which are second nature to start-ups is difficult to simulate. Liberating incumbent innovation labs from the pressure to turn a quick profit and ensuring that they adopt the so-called failure culture are still no guarantees of success.
What makes or breaks legacy firms’ efforts to innovate is whether they can strike the right balance between separation and integration. On the one hand, innovative teams, skunkworks or incubators need to be liberated from the established practices of the core business and the strains that stifle the drive to innovate.
On the other, the airtight segregation of these endeavours from strategy and the C-suite is a recipe for failure. According to Capgemini research quoted in a recent article on weforum.com, more than 75 per cent of companies have some form of innovation accelerator or lab (despite a wave of closures around 2016), yet more than 90 per cent of them fail to achieve real financial impact. A paper published in 2021 in the International Journal of Innovation Management by researchers from the University of Innsbruck found that the reasons for a high rate of failure are siloed approaches and a lack of management support.
Moreover, neglecting the preparation and outcome phases of external accelerator projects means that they fail to align with corporate strategy. Therefore, the knowledge and experience gained through them won’t get fed back into the organisation or promote innovative thinking inside it.
However, despite concerns about the lack of impact or the threat of cannibalising the brand’s core products, innovation labs, incubators and accelerators are here to stay. After all, they are innovations themselves that will improve incrementally as incumbents learn how to keep them at arm’s length without completely sealing them off.
Labour rights and regulations in technology are often criticised as unnecessary curbs holding back innovation. But while technological disruption is coveted, it’s in the best interests of businesses to minimise social disruption and ensure the stability of the environment they operate in.
In hindsight, we can understand how social media can lead to, for example, political turmoil, negative body image issues for millions of teenagers, or how drones can paralyse airports. However, as the news of the first fully AI-generated stock photos of humans arrives, we’re idly waiting for their vast and far-reaching implications on employment, privacy and identity management to unfold before calls for regulation will stir legislators into action. From the perspective of technological advancement, initiatives to make AI human-friendly or attempts to offset the negative impact of technological progress on employees look like shackles on the innovative spirit. In the long run, however, prudence and social responsibility may take us further.
Transforming your product to be digital-first
Digitalising your business will expand your customer base but only if you focus on new value creation |
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The businesses that thrive are the ones that can adopt an offensive strategy. Provide new value for customers rather than improving existing value. Get closer to your customers and examine their needs, then use that knowledge to innovate. |
Selling your existing products in your online channels is a challenge, but in today’s digital era, most businesses have the capability (some way or another) to sell online.
This makes it harder for you to offer a truly unique selling point because, despite your best efforts, there will always be another business somewhere that can offer the same (if not more) than you.
That’s why your sole focus shouldn’t be on selling products. You also need to consider:
- How to envision and launch your digitally enabled products
- How your existing/new digitally enabled products are going to improve your customer experience and add new value
By reaching a higher level of digital maturity, you can respond more appropriately to the changing competitive environment. And that could mean re-evaluating or changing your business model with technology.
Digitally enhancing your products
Digitally enhancing your traditional product or service doesn’t just make you a disruptor. It can also generate a new wave of customers who may not have bought your physical goods and services.
Take Audible, who did this successfully by converting physical books to audiobooks. While the company may not have seen it at the time, the development of smartphones has changed the way we use the web and has made it more accessible to listen on the go.
Then there’s Netflix who – after destroying Blockbuster in its wake – reinvented itself by digitising the entertainment industry to the point where physical video rental became obsolete.
As we’ve touched on already, the market is constantly changing. The businesses that thrive (rather than merely survive) are the ones that can adopt an offensive strategy. They look to provide new value for customers rather than improving existing value.
At Columbus, we’ve partnered with a variety of businesses across a range of industries to help them achieve exactly this.
Innovating Camgrain with Microsoft Dynamics
Camgrain provides a reliable, safe and secure cooperative grain storage facility to its farmer members. Camgrain’s desire for continual development and innovation outstripped the capabilities of its legacy systems, so it decided to look for suitable alternatives.
Camgrain chose to partner with us due to our industry experience, clear understanding of business need and ability to define and develop simple solutions where required.
We helped Camgrain implement Microsoft Dynamics as it had:
- The flexibility to support the unique services it offers
- The ability to keep pace with the innovative processes adopted by Camgrain
But Camgrain’s quest for innovation hasn’t stopped there. The company continually assesses and tweaks its system and has plans for a future project using Microsoft Azure to help optimise its route planning.
Helping Carter Jonas leverage the benefits of the cloud
Carter Jonas is a national property adviser business that’s intent on helping clients realise their goals and aspirations by providing ‘simply better advice’.
The company’s vision focuses on two core areas:
- To strengthen Carter Jonas’ position as a major and distinctive national firm, providing a full range of integrated property services to both corporate and private clients
- To deliver these services by providing outstanding client advice against a culture of constant innovation
While its old system had performed well, Carter Jonas acknowledged it needed to move from an on-premise CRM to a modern cloud-based solution. This was to align with its own cloud-first strategy and to better manage its business-to-business contact data.
Since we’ve helped Carter Jonas upgrade to Microsoft Dynamics, it’s been able to leverage the additional features and benefits of having a modern cloud-based solution, such as having all its customer profiling information in one centralised location.
This has helped Carter Jonas deliver excellent customer experiences at every touchpoint as its teams can view accurate customer data and tailor the right messaging to the right clients.
Transforming C-Kore from silos to an integrated solution
C-Kore Systems Ltd builds and rents modern testing technology for the subsea industry. C-Kore inherited legacy systems from its parent company, Zetechtics, when it launched as an independent company.
But as it started to see more business success as C-Kore, a new solution was required to better fulfil its growing business needs. This was because it was experiencing silos between finance and sales teams, high levels of manual work and productivity losses. C-Kore also needed to move data from its parent company to keep vital customer information.
We helped C-Kore implement Microsoft Dynamics 365 Business Central, a modern integrated solution that could tackle both halves of its business. C-Kore’s sales team can now easily create quotes while the finance team can monitor order confirmations as they enter the system, saving everyone time.
We also successfully moved all of C-Kore’s existing customer data from its parent company’s CRM system into its new solution with no records lost.
This upgrade has not only made life easier for C-Kore – which now has its own system that can fit around business needs – but also its customers, who benefit from more personalised customer service.
Review your customer needs
It’s important for businesses to constantly review their vision of where they’re going with their products and services.
Get closer to your customers and examine their needs, then use that knowledge to innovate. That may involve using technology, but it’s also about transforming in a way that helps you deliver on your vision and add new value.
And if you’ve transformed your business already, it’s not the end of the road. You need to keep evolving and adapting in response to any changes – because if there’s anything the past 18 months has taught us, it’s that unprecedented incidents are near-impossible to prepare for.
The importance of data within a DX strategy
The key to maintaining a competitive edge in business is making the right decisions at the right time |
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Big Data, which is distributed across many platforms and typically uses external, non-propriety information, is far more scalable and offers more intrinsic value than traditional data. Any organisation undergoing digital transformation must take great care to follow the best practices for every stage of the data lifecycle, from planning to decommissioning. |
No-one can see into the future, but with enough data at their fingertips, business leaders can make accurate, timely, relevant and comprehensive predictions about the outcome of potential moves. After undergoing digital transformation (DX), organisations will find themselves with reams of data by default. But how do you best collect, manage, process and use this data to help your business work better, smarter and ultimately boost profits? By systematically turning the information you have into valuable insights, you can make better choices, take fewer risks and fuel improvements across all aspects of your operations. Let’s dig in.
Data management
Effectively managing data is perhaps the most crucial part of any DX strategy. Business leaders will need to strike the right balance between responsibility and opportunity to yield maximum benefit from their data while complying with privacy laws. Here are some tips on how to do just that:
Record everything you can — First and foremost, your company should invest in several complementary technology solutions that allow for the recording and storing of all manner of data, from customer conversations, both online and off, to employee productivity and individual product performance. The more detailed your records and the more interactive your systems, the better the data.
Ensure your system is user-friendly — Your staff have better things to do than endless data entry tasks. You’ll therefore need a system that’s simple and intuitive to use. Make sure the solutions you choose are quick to load, available on mobile and constantly auto-saving.
Keep it clean — Your data is only as good as its last update. Encourage staff to keep everything up to date and well organised so different departments can dip in and out and communicate easily between themselves. Fill in new details straight away and delete outdated entries. Check regularly for import issues and fix any human errors or bugs.
Review regularly — Once you’re up and running, be sure to review your processes regularly to confirm you’re using all the features of your technology as efficiently and effectively as possible. Also make sure that all employees are equally engaged, you’re keeping abreast of the industry’s best practices and you’re using the technology’s latest updates to full effect.
Comply with the rules — Among all this, remember that breaking data privacy laws is a big deal. Always ensure you’re on the right side of the line. The person in charge of the system should be well versed (and always following) the relevant regulations to ensure responsible data management.
Data analysis
Once you have the data you need at your fingertips, it’s time to start putting it to work. This is where we see the intrinsic value of Big Data as opposed to traditional data. In short, while traditional data is based on a company’s centralised database architecture, Big Data is distributed across many platforms and typically uses external information, such as social network modelling and sentiment analysis, that is not proprietary. This makes the data far more scalable and useful in a wide variety of ways that can improve a company’s decision making, performance and cost benefit.
Effective data analysis can help companies:
- Use historical data to extract actionable insights and make data visualisations that support decisions.
- Employ Artificial Intelligence and Machine Learning to predict trends and outcomes to increase efficiency, uncover new growth potential and secure a competitive advantage.
- Build future-proofed data platforms to support cutting-edge business intelligence and economies of scale.
- Monitor employee performance more closely and identify what the most effective workers are doing differently.
- Boost the effectiveness of marketing strategies by giving a clearer snapshot of the leads and sales pipeline.
- Use segmented datasets to find the prospects that are most likely to understand and value the proposition.
Best practices for the data lifecycle
With Big Data comes great responsibility. Any organisation undergoing digital transformation must take great care to follow the best practices for every stage of the data lifecycle, from planning to decommissioning. Here are some tips:
Planning: In the planning phase, ensure the vision complies with the fundamentals of your country’s privacy laws, licensing requirements and the general ethics and culture of your company. Also consider the impact of data processing on the mental and physical wellbeing of the system subjects.
Data Acquisition: If acquiring data from third parties, make sure you have watertight contracts and licenses for doing so, if needed. Clean up the data as much as possible, for example by deleting duplications, mitigating any biases and inputting missing entries. Where appropriate, run Natural Language Processing tools to automatically identify named entities and geocode locations. Remove personally identifying information of your subjects where privacy may be an issue. Finally, be sure to set up a system for the labelling of files and the inputting of metadata. This will protect against misinterpretation or misuse and ensure database integrity.
Data Use: Once you have your data in hand, you’ll need to make sure it’s prepped appropriately so the raw materials are cleaned up. This will ensure it can be combined with different data sources to provide the most meaningful business insights possible. Don’t rush this stage as the cleaner your data, the better your insights. The next stage is data manipulation, which, in its most simplified form, means adjusting the information to make it organised and easy to analyse. Data manipulation language, or DML, is a programming language that adjusts data by modify a database in order to map and interpret the data. It’s easy to get lost and muddled while manipulating your data, so invest in some specialised software or an individual with some nifty spreadsheet skills.
Data Storage: While the data is being stored and used, ensure both virtual and physical access to the information and systems is secure. Consider the security of the physical data processing premises and implement a policy for the creation of strong and frequently changing passwords for all who have virtual access. Also consider your measures for the transport and transfer of information and ensure that a detailed and secure log of who had access when is kept. Finally, establish procedures for the regular backup, update and timely recovery of your technology and database.
Deletion & Decommissioning: Data that is no longer used by the system will need to be repurposed, archived or securely deleted. Remember that if you built a model before going live, the data in that model will also be subject to appropriate decommissioning procedure. (Some personal information can only legally be used for model building and therefore must be deleted immediately.) If and when you stop using the system all together, all residual data must be considered for retention (for legal or future learning purposes) or secure deletion.
Creating an omnichannel customer experience
To succeed in the omnichannel approach, businesses must focus on the customer first and foremost |
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For omnichannel, the customer - not the channel - is the focus. 73% of businesses said customer experience is an important factor in their purchasing decisions. Source: Future of CX, PwC |
Most businesses today sell their products across more than one channel. However, those that only use multichannel marketing will inevitably run into problems such as:
- Style/tone of voice inconsistencies between channels
- Miscommunication between channels
- Frustrated customers who need to use multiple channels to view products and complete purchases
These are all major issues with today’s consumers, who don’t see brands in siloes any more. They want to script their own journeys across multiple channels and touchpoints. This forces them to stick to one channel, or to start at the beginning when switching channels creates friction and negatively impacts their experience.
By adopting an omnichannel approach, you can keep all of your channels in one place while unifying their style and information.
Multichannel vs omnichannel
There are four key differences when looking at multichannel and omnichannel:
1. Siloed vs integrated
Although both multichannel and omnichannel involve selling across several channels, a notable difference is the channel integration. In a multichannel approach, channels aren’t connected. A billboard, for example, isn’t directly connected to a company’s website – they’re separate channels used to increase brand awareness.
An omnichannel approach, on the other hand, involves multiple channels that are integrated to create a seamless experience for your customers. In essence, a customer can easily pick up where they left off on one channel and continue their experience on another.
2. Customer engagement vs customer experience
With multichannel, the aim is to cast the net as wide as possible to make more and more people aware of your business. Omnichannel marketing, on the other hand, is focused on creating a consistent customer experience for the people who are already aware of and engaging with your business.
Let’s put this difference into context. A multichannel approach to your social media pages would help you gain more followers, comments, likes and shares on your posts as these metrics show more people are engaging with your brand.
On the other hand, an omnichannel approach to your social media would focus more on ensuring your customers can easily jump from your social media pages to your website. For example, when they click on one of your Twitter ads, they’re taken to the correct product page on your website, providing a seamless customer experience.
3. Channel focused vs customer focused
The aim of multichannel marketing is to maximise the number of channels used to promote your brand. With more channels, customers can choose how they want to engage with your business.
In retail, for example, a multichannel approach would involve several channels, including:
- Digital marketing (website, SEO and paid channels)
- Billboards
- TV and radio adverts
- Social media
For omnichannel, the customer – not the channel – is the focus. This approach aims to make the customer journey as smooth as possible as people move between different touchpoints.
Using the same retail example as above, an omnichannel focus would involve only half of these channels (such as a website, email and social media) and all of these would be connected so your customers could easily change from one to the other.
4. Quantity vs quality
As we’ve mentioned already, multichannel is about increasing the number of channels available. However, there’s no effort made to link up these channels, meaning customers have to start over when they switch from one to another, which can hinder the quality of support they receive.
Omnichannel is all about the quality of support you can offer through your channels. But this doesn’t mean every channel provides the exact same customer support – contact channels are deliberately varied to manage the different types of support your customers might need.
For example, a simple query can be solved via live chat, while problems with editing a shopping basket may require a more visual level of support through video chat or co-browsing.
Futureproofing your customer engagement strategy
With businesses increasingly dependent on relationships rather than transactions, improving customer engagement has never been more important. A recent study by PWC found that 73 per cent of those surveyed said customer experience was an important factor in their purchasing decisions.
That’s why you should be reviewing the quality of your customer engagement strategies on a regular (and ongoing) basis. There are three ways you can do this:
1) Offer tailored customer experiences
Customers want to be treated as though they’re special, not just one person in the ocean of customers you likely have. Personalising experiences to the individual customer can meet that expectation.
Another benefit of personalisation is that it can help your customers find the solutions to their problems more quickly. Here are some examples of personalisation:
- Recognising returning customers and website visitors – this could be greeting them by name or reminding them of what they previously abandoned in their basket
- Greeting customers by their first name in marketing emails
- Personalised product suggestions based on what you already know about your customers (e.g. previous website activity, interactions with customer service, order history)
- Personalised product suggestions based on what other customers with similar profiles interacted with (e.g. ”Other customers also bought…”)
- Exclusive bundles and pricing offers based on what you know about your customer
- Search results tailored to the customer’s previous interactions with your website/company
2) Reward customer loyalty
Not only do loyalty schemes help your most loyal customers feel more valued, but they also “gamify” the shopping experience and give them an incentive to keep buying (and place bigger orders) from you.
For example, you could offer bronze, silver and gold levels within your loyalty scheme and create levels your customers have to climb. Each level could come with different perks, which improve as you advance.
3) Optimise shopping carts
Shopping cart and checkout abandonment are all too common among online shoppers – the average e-commerce store loses 75 per cent of its sales to digital cart abandonment.
Fortunately, there are tactics you can apply to reduce this in your business:
- Keep it simple: reduce the header and footer on your checkout pages to remove distractions
- Reduce the number of different navigations: this is most effective once you’ve created an engaging checkout flow that consumers don’t feel lost in
- Offer live chat support: this can reassure customers and help them get immediate answers to their queries
- Avoid hidden shipping costs: the easiest way to do this is by offering free shipping. If you can’t afford that, be sure to tell your customers everything about the shipping cost. If necessary, provide a built-in calculator that allows buyers to determine estimated costs based on weight and quantity of items
Multichannel vs omnichannel – what’s best?
Today’s consumers expect personalised interactions and want to be treated as unique. They also want a customer journey they remember. So, with that in mind, an omnichannel approach appears to be better than a multichannel approach.
This doesn’t mean you shouldn’t increase the number of channels you use to communicate with your customers. After all, a business should always be where its customers are, and offering them their preferred contact channel is a good way to stand out from your competitors.
However, the changing behaviours of consumers who expect to be able to script their own journey’s will ultimately make omnichannel a necessity for e-commerce businesses.
Risk management in the 21st century
How climate, sustainability and cyber-security risks are becoming factors to be reckoned with
As Peter Thiel, venture capitalist and co-founder of PayPal said in an interview to Forbes about a year ago, Covid marks the 21st century’s true start. “One should think of Covid and the crisis of this year as this giant watershed moment,” he said.
The step-change taking place in risk management in front of our eyes seems to bear this out. The possibility of a pandemic, global warming and cyber-attacks had already been on our radars for quite some time before the current crises. The term sustainability was defined in 1987, and Al Gore’s An Inconvenient Truth was released 15 years ago. However, disruptions from Covid, increasingly extreme and frequent weather events and cyber-attacks against critical infrastructure have thrown these risks into sharp relief.
Real life events and incidents, although they come at a high cost, tell much more about the resilience of systems – or the lack of it – than any modelling or scenario planning. We’ve seen how our complex, geared-for-efficiency supply chains collapsed during the pandemic and demand for simple commodities remained uncatered for for months. As a result – and with the help of digital technology – our supply chains are now more transparent and take in larger inventories, and supplier assurances are becoming the norm.
From lip service to real risk resilience
Until recently, sustainability and climate risk reporting have been widely regarded as tick-the-box exercises. But having realised the extension of financial and reputational damage climate events and a company’s association with high emissions and fossil fuels can cause, investors, asset managers and pension funds started divesting from unsustainable assets. By the end of October 2021, a whopping $39.88 trillion (£29.36 trillion) had been divested from fossil fuels alone by 1,500 institutions. New reporting frameworks have emerged, such as the three scopes of GHG emissions devised by the Task Force for Climate-related Financial Disclosure (TCFD), whose voluntary protocol has already been adopted by 384 UK companies. Nevertheless, the UK government’s Sustainability Disclosure Requirements (SDR) propose to push adoption further by making it mandatory for large companies in April 2022, as well as widening its scope to cover sustainability matters more broadly.
Also, in November 2021, the IFRS (International Financial Reporting Standards) Foundation announced the creation of the International Sustainability Standard Board (ISSB) to deliver a global baseline for sustainability reporting – an endeavour that the TCFD Secretariat is also supporting.
The opportunities and risks technology presents
Digital tools and platforms can and are already playing a major role in meeting climate and sustainability challenges and those of the pandemic. However, as often is the case with great solutions, they are also double-edged swords and come with additional risks. So far, businesses have mostly been oblivious of these risks or managed them by taking out insurance policies that freed them from having to put proper security controls in place. But the tide seems to be turning.
NCSS’s Cyber Essentials and Essentialplus scheme, which was originally launched for suppliers who were to win government contracts, are today certifications coveted and attained by businesses of all stripes.
A fresh approach to technology risk can also help information security professionals get their C-suites’ buy-in for their budget plans. Rather than wastefully investing in security tools and solutions across the whole enterprise, mature technology risk management is aiming to maintain an acceptable level of risk in line with the business’s risk appetite.
Considering the persistence and global nature of these new types of risks, as well as how intricately they’re intertwined, companies that want to future-proof themselves will have no choice but to incorporate them into their general risk assessment and monitoring protocols.
Imbuing the business with the spirit of digital
Considering how the pandemic has accelerated the already breakneck speed of digitalisation by seven years, the need to create a separate C-level role responsible for overseeing the corporate transition from analogue to digital has never been more relevant.
Although chief digital officers (CDOs) are still a rare breed, they can be instrumental to successful digital transformation thanks to their ability to break down established boundaries that tend to stall these projects.
Digital innovation thrives in business environments where employees can freely collaborate with each other across departmental silos and corporate boundaries. It’s equally important that data sits on a unified data platform rather than disconnected Excel sheets, and can be accessed by anyone, any time. Although the structural reorganisation of a business can happen in a matter of weeks, silos may remain in employee’s minds. To remove them, CDOs need to win stakeholders over to the goals and benefits of the project and ensure that staff have all the necessary skills and tools to follow new processes and prevent their relapse into old habits.
The importance of culture
To successfully digitally transform, you need to focus on the transformation side of things as much as the digital technology |
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Your transformation stands a much better chance of success if you have the right culture in place. Léon de Caluwé and Hans Vermaak’s Colours of Change can help you better understand the ways your stakeholders handle change and the Prosci ADKAR® Model can help you recognise and address your stakeholders’ reasons for resistance. |
When it comes to digital transformation, it’s easy to focus only on the digital side of things. But the transformation should be as much of a priority as your digital considerations. That’s why culture matters: you need the right culture before you transform the business.
Digital transformation tectonically changes the way an organisation performs and completes tasks. This can range from changes in processes to department restructures, which is why you need a culture that’s willing to accept and support the change initiative.
You need a digital-first culture. That means prioritising culture, goal alignment, stakeholder engagement and all of the other factors involved in a change management strategy. This will allow you to benefit from:
- Better and faster decision-making: the right mindset and access to the right technology empowers people to make well-informed decisions on the spot
- Faster results: when people can access the right information at the right time, they can act more quickly so the organisation can move faster
- More and better talent: people are drawn to digital leaders due to the promise of cross-business collaboration and greater autonomy
In essence, your transformation stands a much better chance of success if you have the right culture in place. But how do you create this culture?
Creating a digital-first culture
1. Expect resistance
Even if the solution appears to be the most ideal or logical improvement, always expect resistance. Why? Because people don’t like change, even if it’s good for them.
Prioritise resistance when preparing your change management roadmap. For example, where might you experience resistance? Which groups will you see it in most? In what forms might it take? This can help you mitigate the resistance quicker and before it impacts the project.
2. Follow a structured plan
Resistance is normal, but effectively applying change management tactics can help you mitigate the potential fallout.
For example, you could:
- Plan for the initiative by understanding the business context and project agenda
- Engage your key stakeholders by aligning their mindsets with each other and your project goals
- Build and maintain awareness across the business as the initiative progresses
- Assess how the project might impact each stakeholder group by working with your key stakeholders to better understand the change and what it means for your organisation (this will allow you to address the ‘what’s in it for me?’ question)
- Create change journeys and plans tailored to each impacted stakeholder group
- Build a change management team that’s a mixture of internal and external resources
3. Isolate the causes of resistance
Change management shouldn’t just treat the symptoms; you must dig into the root causes. Understand why someone is resisting, not how that resistance is manifesting.
Sit down with your stakeholders and identify their motivations, pain points and fears.
Léon de Caluwé and Hans Vermaak’s The Colours of Change can help you better understand the ways your stakeholders handle change and the Prosci ADKAR® Model can help you recognise and address your stakeholders’ reasons for resistance.
4. Engage your key stakeholders
When it comes to transformation or change initiatives, you need your leadership and senior management teams on your side. It’s a top-down approach – these groups are the ones who can best help you mitigate resistance and create the right culture by demonstrating their commitment and making a business case that supports the need for change. The more engaged your leaders are, the more likely everyone else is to follow in their stead.
A strong culture is key to a successful transformation
With business transformations, you need the right culture. After all, it will impact various parties and the way they’ve been working for many years. Your choice of technology can only take you so far – if you want your changes to be adopted and sustained, you must prepare your stakeholders in advance.
The sooner you acknowledge and handle this, the more likely your transformation initiative is to achieve the outcomes and value you intended.