The news these days continues to be filled with reports that traditional stores are at last being sustainably displaced by fast growing online competitors. Startups in online shopping, media, travel, financial services, sharing economy, and finally even healthcare, have either invented popular new high-growth digital categories or are in the midst of successfully re-imagining the old ones in digital native terms.
In the 2000s, the digital disruption had more to do with industries on the economic edge, such as digital music with iTunes, e-commerce with Amazon, and online advertising with Google.
In the 2010s, digital is hitting core industries a bit harder: In transportation, Uber has achieved more revenue in its first 7 years of operation than either Amazon, Google, or Facebook did, all while securing a private valuation that’s larger than industry bellwether Ford. The same has taken place in hospitality, where Airbnb is now valued right around as much as the two largest old guard hotel chains in the world, combined.
Along the way, these so-called legacy firms, especially ones with retail stores, are now finding that their visitors, sales, and very existence are being rapidly eroded by more contemporary, easier-to-use, and highly compelling digital offerings, even as they continue to experience slow going.
While there’s nothing truly new here in terms of the macro trend, except for the scale, speed, and depth of the disruption, it’s little wonder then that significant attention is finally being given to digital transforming the traditional organization.
Customer experience: The linchpin of digital transformation
The industry data varies, but the message being transmitted to the business world seems evident: Create and sustain better customer experiences, infused with digital capabilities and meaningful engagement, or begin heading increasing irrelevance or even the dustbin of corporate history. A recent retail CEO survey by JDA/PwC confirms that many leaders have received this message, with digital transformation ranking as their highest investment priority in 2017.
Certainly this was the core message I encountered at Sprinklr’s Digital Transformation Summit in Nashville this month. Sprinklr, not quite a household name yet even in enterprise circles, is however one of the most well-known social media management firms at the moment, and a noted leader in the industry.
The premise of the event — an IT leadership priority that I also observed in my own CIO survey recently — is that the single most important boundary an organization has is between itself and its customers. That boundary is the realm were the critical and business-sustaining activities of customer experience takes place. It’s where business and commerce today gets done, how the customer journey is played out, and where value is created and exchanged, in whatever combination of ever-multiplying digital arenas.
The digital operating environment: A fast-evolving target
In a previous era, customer experience was largely conducted in-person and in well-defined physical locations. In the digital world, customer experience now happens literally everywhere: On mobile devices, in apps, on laptops, on wearables, inside games, in connected IoT devices, via chatbots, and on and on. In other words in places you often aren’t aware of and/or don’t expect with a more static and traditional view of customer experience.
As I’ve noted in the past, the value of a high quality customer experience, especially in the digital world, is strategically and competitively significant: Customer experience leaders outperform the S&P 500 by a good margin.
So vital is customer experience that one main speaker at the event, the noted social media industry analyst and New York Time bestselling author, Charlene Li, made the point perhaps the most bluntly: Today, “if you’re not working on customer experience, then you’re working on the wrong thing.”
Perhaps the most significant and persuasive presenter at the Digital Transformation Summit, however, is also one of the most respected figures in technology, Cisco chairman John Chambers.
Making an impassioned case for fixing a typical customer experience that has become entirely too fragmented, haphazard, and poorly integrated in many organizations, Chambers noted that most of us “have dozens of vendors that support customer experience in our organizations, but the reality is that few work well together.” So we end up with more and more experience silos, as new channels and devices continue to grow and proliferate.
As importantly, Chambers noted that new digital competitors emerge, without nearly as many constraints as we have, and reinvent a better customer experience upon whole new cloth. In response he said, “you must either disrupt or be disrupted. And you can’t disrupt while operating in silos or without single view of the customer.”
Perceiving your customers through the digital ‘fog’
Ostensibly, operating cross silo across customer experience channels is the industry competency that the event’s sponsor, Sprinklr, is most well known for — a capability to perceive, manage, and exchange value with one’s customers through a single lens, instead of spread out across hundreds of digital channels, where you can’t tell who they really are, or if they’re the same individudal or not. Addressing this now pervasive challenge was a key motivation for the event itself, in fact.
As Sprinkr’s VP of Product Enablement, Paul Herman observed later in the day, without this integrated view you end up in the unenviable and unsatisfying situation of “having 50 first dates with a customer.” That is, going through the same process of getting-to-know-you and initial engagement over and over again, as you they connect with you via different digital channels and devices over time. Addressed correctly, this disassociation of experience can be resolved by looking at the process holistically, then offering a more contextual and informed journey for the customer. This can be achieved by centrally managing customer identity, then building on historic knowledge of the customer and previous interactions with them.
Of course, perhaps the biggest root cause of broken and fragmented customer experience is sheer digital proliferation itself, both channels on the consumer side and marketing stacks on the enterprise side.
As marketing technology expert Scott Brinker has recently noted, there has been a genuine explosion of marketing vendors and solutions over the last 6 years, going from 150 point marketing solutions in 2011 to over 3,500 today. The same on the consumer side, where there are thousands of digital and social channels, from apps and online communities, to social networks and microsites.
Sustainably manage digital channel complexity
Finally, it was a speaker towards the end of the summit, Kellog School professor Mohan Sawhney, that made perhaps the most profound statement on motivation: With the fundamentally limited amount of attention that humans can possibly spend, and with every marketer, advertiser, and salesperson trying to get their attention with an ever growing amount of content and digital experience, he noted, then “if we don’t [take great care to] orchestrate customer experience, it just becomes noise.”
That then brings us full circle to a trend that’s becoming more common across digital products and services as a whole: Contextualization. That is, making it easy for the user to understand where they are, why they are there, what they are doing, and what comes next in the digital experience they’re currently in.
Three lessons for digital transformation of customer experience
From all this, we can derive a few instrumental take-aways for CIOs and CMOs that want to sustainably succeed on their ongoing journey of digital transformation:
- Organizations have a mandate today to simplify, properly contextualize, and make effective customer interactions on as many touch points as they can over time.
- Being a digital leader requires proactively using multichannel data to maintain an integrated picture of the customer, and then actualize a rich and useful customer journey using this knowledge.
- Use leverage to outsource or otherwise manage the complexity of the ever-evolving digital world. In other words, no organization alone can address digital proliferation.
While today’s digital operating environments are as complicated as they’ve ever been, they are also the most potentially rewarding for those that can learn to manage their intricacies and constant shifts. It’s also key to realize that it’s still early days in the history of digital customer engagement, so cultivating multichannel customer experience management as a dynamic capability as a core competency is a long-term survival strategy richly worth the time and investment.
Note: Sprinklr covered the costs of my travel and attendance at the Digital Transformation Summit.
(Cross-posted @ ZDNet | Enterprise Web 2.0)