In the Digital Transformation Era, Customer Obsession is the Chief Currency
Digital transformation that influences the customer can’t be an organizational focus, it must be company-wide.
Digital transformation is today’s business buzzword. Leaders brainstorm about it. Marketing departments yearn for it. IT conferences host sessions on it.
But what does that mean to an organization? What’s the big idea, other than making sure you have the latest “must-have” game-changing software?
A major purpose of digital transformation is for companies to better serve their customers. But that simple fact too often gets lost in the shuffle. And the complex process of harnessing technology in a customer-focused way can be daunting. Most large companies don’t know how to start or how to be successful, and KPIs for success often focus on technology implementations, rather than the impact on the customer.
Those designing and leading a digital transformation process should hold tight to two core principles: Keep your customer at the forefront, and lead strategically for full buy-in across your organization.
Put the customer at the center
At its core, digital transformation is about using data to help your business. Data on its own is inert, but data paired with technology that can interpret and communicate it in a way that meets a specific goal is transformative. The misidentification of that specific goal is where many business leaders go wrong from the start.
For the digital transformation to succeed, that goal must be “to serve the customer better.” Anything else will result in high-tech wheel spinning.
“Companies must be customer obsessed. Without a customer your company doesn’t exist,” says Fred Faulkner, partner at ICF Next, an engagement and transformation partner. “Understanding your customer in the deepest way possible has to be priority one.”
Fred adds that companies need to more deeply understand each customer’s unique preferences to connect with them and improve their relationship with the brand.
“If you’re living in legacy technologies that can’t support that level of detail, you’re going to get eaten up by your competitors — and you’re going to be out of business,” he says.
Customers today want a personalized and frictionless experience. Brands that bend over backward to give customers those things will be rewarded with loyalty and referrals. Shoppers who feel they are just another number will look to competitors to meet their needs.
“We have a saying that if you’re not working directly with a customer, you better be supporting someone that is,” says Simon Button, chief information officer for RSL, one of the largest not for profits in Australia, which runs the world’s largest charitable lottery. “For us, it’s staying close to our customers, understanding their wants and needs, and then aligning the customer experience, the interactions, whether they be micro interactions or large-scale interactions.”
Customer first, technology second
After you’ve absorbed information on your customers’ wants and needs, you can move on to tracking their journeys. Where do customers interact? What do they purchase? How do they want to interact with you? And how do you actually then connect with them?
“Once you understand that journey against one, two, five or maybe 10 personas, then you can start to understand where you need to go with technology, where technology provides a value-add into that buying process and into that relationship with your customers,” Fred says. “Technology can’t be the first decision. Actually, technology’s probably the third or fourth decision when it comes to a transformation process.”
The technology, while not by any means an afterthought, must by necessity only be put in place after you complete the rest of the customer analysis process.
“The people and process part are what really fail digital transformation projects,” Fred notes. “It’s not the technology.”
Get buy-in within your organization
Digital transformation requires thoughtful leadership, especially considering that the more intangible aspects of this process are its largest potential weaknesses.
Digital transformation efforts will only be successful if the focus on how to create the ideal customer experience is set from the top, and across the various business units. Deciding which technology investments need to happen and then executing them isn’t as simple as IT implementing them. To be successful, the technologies need to be widely adopted and address the key needs of each organization.
To achieve this, companies need to:
1. Identify your goals — and communicate them
“I believe the steps that leaders need to take when they look at taking on digital transformation starts with first coming to a clear understanding of what disruption is affecting them and what action they want to take to address it,” Fred says. “So it is a goal-setting process. It’s a decision at a most senior level, and then understanding how that transitions into the lower levels of your organization.”
At RSL, Simon remembers the CEO communicating benefits of the organization’s planned digital transformation through stories of satisfying customer experiences and great employee experiences. The staff felt they were being brought along on the journey and were welcome to contribute ideas.
2. Focus on your people
“Once we determine the capabilities required and the processes that we want to embark on to deliver against that digital transformation, it really then comes down to the people and structures that we need to put into the organization to deliver against that,” Button says. “How can we form agile teams, agile structures that can adapt and move quickly, and then put the right people within those teams?”
3. Foster collaboration
In 2017, Nike announced a consumer-direct initiative focused on leading with digital and making more direct connections in key markets. All of the company’s functions had to coordinate in a full surround effort to accomplish this realignment. There had to be synergy among legal, business, technology, and marketing teams, each ensuring the others were set up for success.
“The biggest thing that we hear over and over again from the top of our house is that we obsess about the needs of our consumers,” says Genaro Lopez, Nike’s director of records and information management. “And the close partnership synergy between IT and marketing is absolutely central. Because whether you are a marketer or whether you’ve been doing innovative technology projects, they are synonymous with each other at this point within Nike.”
One of the results of the realignment was the establishment of a new store in downtown Los Angeles, Nike by Melrose, as a test case for using digital, data-driven insights to tap into a local community. The digital engagement of local runners and athletes who use the Nike Run Club app or the NikePlus app informs how things are presented to them at the store. For example, every two weeks a NikePlus member can come into the store, scan a QR code, and get a free product.
“Everything that happens in that store is based on a digital insight from a consumer,” Genaro says.
All aspects of Nike’s operations must come together to enable such transformative initiatives.
Fred argues that’s because working in silos gets in the way of pursuing the ultimate goal — serving customers better: “If your organization isn’t focused around what you can do for that customer and how they want to engage with you, it doesn’t matter how many silos you have, you’re never going to be able to break down those walls.”
Leadership’s approach to introducing, explaining, and incentivizing the work of digital transformation makes all the difference in tearing down those barriers. Genaro says it’s important for organizations to “lead with courage,” but more importantly, for them to embrace change as they focus on achieving their goal of putting the customer first.
“You must disrupt yourself,” he says, “before you get disrupted.”
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