• March 1, 2015
  • By R "Ray" Wang, founder, chairman, and principal analyst, Constellation Research

7 Lessons to Learn in the Digital Shift

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The stage is set for digital transformation to be one of the hottest trends in 2015. In customer experience (CX), market leaders and early adopters have already embraced the shift. Yet massive hype will be coming soon, as the importance of digital channels hits mainstream awareness. While it seems as if digital can be applied as an adjective to every movement or trend, Constellation Research defines digital transformation as the methodology in which organizations transform and create new business models and cultures with digital technologies.

Customer experience in the digital age requires a shift in thinking. Those in leadership positions must prepare to move ahead of these social, organizational, and technology shifts or be left behind as digital business disruption becomes a necessity.

There are seven lessons from market leaders and fast followers to be learned in the shift to digital CX:

1. Deliver a continuum of interactions. Customer experience in the digital age is not a one-time event. It's not a metric or Net Promoter Score. The sum of all good and bad interactions drives the overall impression on a customer. Even worse, every interaction is on display to the public and networked.

2. Shift from engagement to experience using analytics. The digital world enables CX professionals to track every click, touch point, and bit of digital exhaust. All this data must be converted into information, must surface insights, and must ultimately democratize decisions. Data is the foundation of digital customer experience. Analytics helps CX leaders shift from engagement to experience.

3. Design from multichannel to ubiquitous channels. Tired of the omnichannel label? We are too. It's not about omnichannel, but rather about delivering a seamless single response regardless of the channel your customers are in. Digital customer-centric experiences transcend and traverse channels, departments, and internal business processes.

4. Let customers craft their own adventure journeys. Journey mapping often limits the paths a customer is able to take. When customers choose their own adventures, digital customer experiences support customer segments of one.

5. Embrace identity to deliver hassle-free experiences. Identity removes the barriers and transaction costs in customer experience. Seamless access and payments can remove the friction points. Use identity to take the hassle out of engagement.

6. Focus on contextual right-time experience. While most strategies emphasize real time, digital customer experiences design for context and enable mass personalization at scale. Context can be delivered by role, relationship, location, time, process, ownership, industry, sentiment, and even intent. Greater relevancy reinforces customer loyalty and adds to brand authenticity.

7. Invest in vertical specialization. Today's out-of-the-box horizontal solutions are no longer good enough. As market leaders and fast followers wait for technology providers to deliver real vertical capabilities, many organizations realize they need to build versus buy to achieve digital capabilities.

Digital Darwinism Is Unkind to Those Who Wait

In almost every segment, the top three competitors control 43 to 71 percent of the market share and 53 to 77 percent of the profits. While boards have not been complacent about addressing change, the past five years have demonstrated the difference between those who have invested in digital transformation and those who have not. The corporate digital chasm is massive among market leaders, fast followers, and everyone else. Astute board members realize they must invest in transformational change or face a vicious digital Darwinism.

Organizations that are succeeding in the digital era are doing so because of their understanding of what it takes to build an organization in the digital age. Traditional customer experience has shifted because we no longer sell products or services. The digital age requires us to focus on experiences and outcomes. We've moved from selling products to keeping brand promises.

The digital transformation in customer experience is here. The driver stems from the fact that since the year 2000, 52 percent of companies in the Fortune 500 have gone bankrupt, been acquired, or ceased to exist. It's up to us to disrupt digital business before it disrupts us.

R "Ray" Wang is the principal analyst, founder, and chairman of Constellation Research. He is the author of the business strategy and technology blog "A Software Insider's Point of View." His latest book, Disrupting Digital Business, will be published in the spring by Harvard Business Review Press.

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