There are many different ways to approach digital transformation:
- Operationally to streamline internal processes and reduce costs.
Tool-based digital transformation, where you reform the tools you have to achieve better business outcomes
- Data-driven digital transformation, where organizations create opportunity based on the data they have
But what we’ve found is that a single approach stands out above the rest: customer-focused (sometimes called customer centric) digital transformation.
Here’s how to approach digital transformation through the eyes of your customers.
What is customer-focused digital transformation?
Customer-focused digital transformation is when you embark on digital transformation efforts (e.g. changing how your business works and how your employees do their jobs) from the position of the customer.
For instance, if a clothing store's customers are demanding better digital experiences online, it might transform its back-end to have more accurate and up-to-date inventory data. This would better unite in-store and online properties so the store could offer a seamless service where customers could “buy” clothes online, have them delivered to the store, and try them on in a risk-free way.
That insight came from a customer, but the actual transformation was of a back-end system that customers never see.
Why customer-focused digital transformation is best
Customer-focused digital transformation is, in a lot of ways, the comprehensive way to understand digital transformation initiatives.
Because it’s the closest approach to the desired outcome of digital transformation: make an organization more customer-centric.
While the other approaches we mentioned earlier in the article – like operational-focused or tool-focused – are absolutely valid, if you play through their consequences and business cases you end up right where customer-focused digital transformation starts.
For instance, let's say a manufacturing company that produces refrigerators embarks on a digital transformation journey to streamline its systems and get fridges to market faster and more effectively.
The reason to do that might be:
- To stay competitive in a changing landscape
To ship products to market faster
To reduce cost and thus, cut prices
If you follow those reasons though, you inevitably end up confronting a very real fact: no matter what, digital transformation is all about the customer.
Customer-focused digital transformation just starts there, rather than getting there eventually.
How to “do” customer-focused digital transformation
Most businesses claim to be customer-focused. And with good reason: customers pay the bills.
But we’ve found that many enterprises don't walk the talk and end up focused on themselves.
It’s an easy trap to fall into:
People tend to focus on what they know and what impacts them
Businesses are made up of people
So they focus on what they know (their own business) and what impacts them (again, their own business).
So here’s how you can make sure that your digital transformation project doesn’t fall into this trap, and transforms problems your customers have rather than ones you do.
1. Always remember the customer experience
The most important thing for customers is their own experience.
So that experience should be the most important thing for your business.
A few years ago, Econsultancy wrote:
Customers today are challenging companies to find new ways to connect with them with the 'right promise.' To take this thought further, effective customer experiences aren’t just about offering customer service or producing the best possible customer experience in a singular, right moment.
And since then, not much has changed.
Customers continue to put enormous value on organizations to provide the right experience at the right time and have increasingly little patience for anything else.
The challenge businesses have to solve is how to do that. It’s about uniting marketing, technology, deployment, sales, and physical environments under one roof to:
- Craft the message for the right moment
- Understand the right moment to deploy that experience
- Have the capability to create experiences at the right time and ONLY the right time
- Be able to carry that experience through to action/behaviour change (conversion).
And this starts with understanding your customer’s desired experience, in a temporal way.
2. Flatten your data silos
Understanding your customers’ wants and meeting them effectively has to be done on a smaller and smaller scale. And while we’re not at fully personalized/customized experiences yet, we’re not far off.
Which is why flattening your data silos is a critical step in achieving meaningful customer-focused digital transformational change:
- Providing the kind of real-time adaptive and responsive experiences customers expect can only be powered by a massive amount of data for granular segmenting and predicting.
Customer journeys are no longer linear, but rather span dozens of touchpoints (more on this in a minute). Mapping and understanding that is key, and again can only happen if data is democratized within organizations.
Historical data can help map buying patterns, in turn allowing for predictive analytics to play a role in understanding what customers will want next and helping organizations get a jump on offering it to them. It’s only through predicting desires that enterprises can proactively create experiences rather than retroactively responding to the experience consumers had yesterday.
By uniting data under a single umbrella, enterprises can best position themselves serve customers what they want at the exact moment they want it.
3. Think in ecosystems, not in processes
We mentioned earlier that customers span multiple touchpoints. Well, that new reality of how customers engage with businesses means that businesses need to start thinking about ecosystems rather than processes, funnels, and checklists to better serve the folks paying their bills.
By beginning to think of themselves as members of the customer’s ecosystem rather than the customer as a component of their process, organizations can begin to think about how their systems best serve the ecosystem they’re a part of.
What’s more, customers don’t move in a linear process. They move through the ecosystem they cultivate and curate, a combination of digital and offline experiences, choices, and decisions.
It doesn’t matter if your funnel it set up so that your prospects see an ad and then get a cold email. If they don’t see the ad or ignore the email, your carefully-constructed funnel falls on its face.
By digitally transforming systems to reflect the customer ecosystem (and your small role in it) the companies can be much better at meeting those needs in a way that suits the customer rather than the way that suits the funnel.
Digital transformation has many approaches. But the one we prefer is customer-focused digital transformation.
Because it starts at the heart of what digital transformation is supposed to do: help customers engage with businesses with digital and non-digital ways to maximize their experiences.
Experiences that customers demand be personalized, tailored, and of the best possible quality.
By always considering the customer experience, leveraging disparate data sources, and being a part of, rather than an intruder in, the customer ecosystem, businesses can offer the digital transformation that will keep them competitive long into the future.