Why Companies Need To Be Aware Of The “Experience Revolution”
UX Corner

Why Companies Need To Be Aware Of The “Experience Revolution”

David Bolton • June 26, 2017

The revolution will be digitized.

Long before he was just a pop culture image on a graphic tee-shirt, Ernesto “Che” Guevara was known to muse on the fundamental changes that take place in society. According to Che, “the revolution is not an apple that falls when it is ripe … you have to make it fall.”

Known for spending a great deal of time in the technological backwaters of Cuba, it is likely that Che may have found the adoption of the word “revolution” by the modern technology slightly irksome. Over the last 40 years or so we have had the PC revolution, the mobile revolution, the smartphone revolution, the digital revolution, the cord-cutter revolution, the broadband revolution, the app revolution … all of which make our lives in the connected society better.

And now we can add another one to the list … the experience revolution.

According to a report published by the IBM Institute for Business Value, the omnipresent specter of digitization has forced companies to reassess not only how they operate but also the ways in which they engage with their customers. Businesses in multiple industries are, the report said, “feeling the heat from disrupters who are using digital to revolutionize how customers interact with brands.”

This revelation from IBM is not exactly a surprise. Nor is it new. The word “disruption” is an overused trope for the cliche concept of creative destruction (which is better defined as pragmatic iteration). The process of integrating digital experiences—the convergence of physical and digital customer interaction—has been ongoing for some time. In other words, the so-called experience revolution should be at the top of the list for any company that wants to succeed in this brave (new) digital world.

“Forward thinking companies have always pushed the boundaries of technology, insights and design to reimagine the experiences they want customers to have,” said IBM. “Today, we are crossing a new threshold as businesses from all types of industries adopt a host of digital technologies that are reinventing how they interact with customers across physical as well as digital environments.”

A Seamless Customer Experience Starts With Engagement

For the purposes of its report, IBM interviewed 338 customer-focused executives and business leaders to find out their attitudes to the current state of the experience revolution. And while the sample size is small, the findings of the report make for interesting reading. The report considered some of the hot topics in current customer experience (CX), including mobile, the Internet of Things, virtual showrooms, virtual reality, voice commands and digital printing.

Mobile-first is still the focus for the majority of companies.

Eighty-six percent of respondents said that mobile apps which can be used in a physical location will be a customer engagement priority for the next 12 months. Mobile payments or mobile loyalty programs also rank highly as a priority by 85% of people. Companies are keen to integrate mobile sensors that interact with mobile devices; 80% of business leaders cite location services (Near Field Communication, GPS) as part of their future customer engagement plans.

Around 80% of people said that the Internet of Things will be important in terms of digital engagement. Voice user interfaces—Amazon Echo, Google Home, Apple’s HomePod—will play a greater role with 70% of companies expected to introduce voice services in the near future. Ordering online and then picking up in store was cited by 61% of respondents.

The integration of virtual or augmented reality is further down the list of priorities. Although there is a consensus that the “realities” (virtual, augmented and mixed) will play a large role in customer engagement over the next decade, 50% of people say that their companies will implement one or both in the next year.

IBM CX Initiatives

Companies are still testing the ground when it comes to virtual showrooms or virtual purchasing opportunities. Even oft-maligned wearables were considered a more immediate customer engagement tool—51% of respondents say that customer-focused wearables will be part of the experience revolution.

“The fact is, digital innovation has the biggest impact when it creates experiences that solve a deeply rooted need in a way that is personalized and removes friction from the experience,” IBM said. “To achieve that, you need to build your company DNA around integrating the customer point of view into everything you do. Take time to learn your customers’ needs, find the biggest challenges, and place your bets accordingly.”

The Digital Transformation Is The First Step

So why are companies so intent on digitally enhancing the customer experience? The answer is refreshingly simple … to drive revenue and increase market share.

IBM reports that 62% of people say that attracting new customers with digital experiences is their prime metric. New customers means increased revenue streams. An increase in market share (cited by 57% of people) provides the same result.

IBM Customer Engagement

Companies should ask themselves the following questions before they throw themselves into the experience revolution:

  • Which companies, both inside and outside your industry, are influencing your customers’ expectations?
  • To what extent is customer experience a core component of your organizations’ business strategy?
  • Which digital technologies will be experience game changers for your customers and your industry?
  • What potential efficiencies, cost savings or other internal benefits could be built into your business case for the digital transformation of your CX?
  • How will you acquire the new skills you’ll need to successfully reinvent customer experience?

Digital transformation can open up what IBM refers to as a “whole new frontier,” which means that companies need to consider what these experiences must be. Coming up with a great customer experience is only the first step. Companies must look at honing or reinventing that experience (both internally and externally) as required, rather than just integrating digital to “keep them in the game.”

Companies Must Have A Customer-Focused Playbook To Win

A recent survey of 388 CEOs by Gartner said that 42% of company executives have begun their company’s digital transformation. Around 47% of CEOs have been directly challenged by the board of directors to introduce digital initiatives, with 20% adopting a digital first attitude. The only fly in the ointment in Gartner’s survey is that only 21% of CEOs consider the customer to be a priority when shifting to a digital business model.

To that end, companies must design a customer experience playbook that allows them to win, irrespective of where or when customer interaction occurs.

This tool should limit the potential for false choices—a pure focus on revenue generation, for example—and have customer experience as a core part of business strategy. In addition, the playbook must start a dialog on value creation from experience initiatives, which will also include managing the paradox of internal and external pain points—cost of integration, disruption to current business model, security, lack of skilled people etc.

The good news is that more companies understand that digitalization as part of the experience revolution is the only way forward.

Technology has allowed companies to engage with customers in ways that could hardly been imagined as recently as 20 years ago. In turn, customer expectations have been increased, creating a need for companies to understand not only what their customers want but also how they themselves can benefit from the ongoing experience revolution.

“Armed with these new experiences, customers are becoming increasingly impatient with incumbents who don’t keep up,” IBM said. “Helping customers easily find what they need, simplifying signup, driving personalization and streamlining access to support—across all channels-is now critical to retain customers. Increasingly, the way customers experience a product or service is as important as the product or service itself.”

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