Customer experience is digital
This article was first published in The new IT playbook, a report that explores what it means to be resilient and adaptable in the face of disruption.
There are many facets of the digital business era but none more important than customer experience. The way customers interact with a company, whether online, in store or through electronic signage, is enabled by digital technology. Accustomed to gathering information, communicating, and making purchases online, customers expect to be the focus of attention. Because the way customers interact with a company is the way they remember that company, it's not too much to say that the experience a company offers is its brand.
The importance of customer experience is no secret―it's overtaking both product and price as the top differentiator in the minds of customers. Because it typically costs seven times as much to gain a new customer as it does to continue doing business with an established one, investing in existing customer relationships pays big dividends. Today, those investments should be in digital technologies designed to reach customers across multiple channels, including online advertising, online purchasing, video conferencing, chats, and product delivery.
Digital channels are on the upswing
Digital business strategists who study human behavior find that consumers tend to stick with what they're used to, while being a bit slow to move to new and better methods. There is quite a difference between the minority of innovative early adopters, the majority of mainstream purchasers, and the trailing minority of laggards. The cycle is clearly spelled out in the Diffusion of Innovations, a theory popularized by Everett Rogers (Figure 1).
Against this backdrop, the pandemic has broken the traditional channels of customer interaction. It's no longer possible to offer in-person demos, meet over lunch, or gain purchasers' attention through attractive storefronts. Instead, companies must take a digital approach to cultivating current customers and attracting new segments of buyers.
Research from McKinsey bears out this contention. The necessity of using digital channels during the pandemic has given rise to sharp increases in the numbers of first-time users. In approximately eight weeks, consumer adoption of digital channels has vaulted five years ahead, according to the research firm.
Most important, when the lockdown ends, it's unlikely customers will go back to their old behavior patterns. Much like riding a bicycle, learning to use online tools is a skill that, once learned, is never forgotten. It's a sure bet that newly adopted digital interactions will weave their way into the new normal.
Build a better customer experience
Savvy IT and business leaders should keep these trends in mind as they rethink and redesign the customer journey. Putting digital technology in place at each of the five key customer touchpoints―awareness, considering, purchasing, retention, and advocacy―will pay rewards for years to come. For example:
- Awareness: Online advertising, already a powerful force, continues to gain momentum. In addition to optimizing search engine results for your products and services, explore online forums like LinkedIn Sessions, TED Talks, and sponsored events such as webinars.
- Considering: Most customers do online research when mulling a purchase. Include test reports and reviews on your website, as well as tools for comparing your products with those of competitors.
- Purchasing: The simplicity and ease of use of online purchasing is winning over even resistant customers. The rebound to in-store purchases is unlikely to return to pre-pandemic levels. Strive for a frictionless experience across all channels, including online, in store, and combinations of the two, such as click and collect.
- Retention: Customers expect their experience to be consistent across channels, whether online, in a store, or over the phone. Customers assume you have―as you should―the same knowledge of their habits regardless of channel.
- Advocacy: Customers will recall how they were treated at each touch point and spread the word to others in the form of online reviews, emails, and social media posts. Turning customers into advocates builds brands and primes the pump for future sales.
Who's doing it right
While the pandemic has disrupted business as usual everywhere, companies in some industries are putting innovative approaches into practice, according to McKinsey research (Figure 2). For example:
- Travel. Lockdown policies are causing many people to dream of travel. How about virtual travel? Digital technology can provide interactive 3D views of destinations and allow would-be travelers to interact with guides and ask them questions about an exotic locale. Customers who have an outstanding virtual experience now are likely to put a destination on their bucket list and make a real-life trip there later.
- Museums. The ability to take a virtual tour through an exhibition can be a moving and educational experience. Often, the online experience offers advantages such as enabling visitors to get closer to the works of art or exhibits they want to see, without being obstructed by other visitors and tour group members. Such a virtual experience can whet the visitor's appetite for a more rewarding real-life visit later.
- Call centers. By enabling call center staff to work remotely during the time of pandemic, providing them with complete customer information and enabling interactive customer video sessions, companies can retain and enhance a critical touch point. Apple provides an example worth emulating. The Apple representative schedules meetings, sends reminders, accesses complete historic information, and uses FaceTime to interact with customers.
Seize the moment
While the overarching trend has long been toward increasing reliance on digital channels, the pandemic has accelerated that transition. In many cases, the customer journey, having become 100 percent digital during the lockdown, will remain that way afterward. This disruption is giving organizations an opportunity to be bold, think differently, and improve the customer experience at every touch point. Companies that seize the moment will gain an edge for years to come.
The new IT playbook: From recovery to resurgence. Expert advice for your digital transformation.
This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.