Digital Disappointment: What Companies Must Be Aware Of In The Digital Economy
The inevitable march towards digital customer experience can have pitfalls for the unwary traveller
Brands that don’t take customer motivations into account as part of digital transformation run the risk of creating disappointment rather than delight.
An executive report from IBM Institute for Business Value said that the mad rush by companies into the so-called “experience revolution” does not always mean that consumers will be totally on-board with the new direction. According to the IBM report—“The Experience Revolution—Why Some Customers Aren’t Fans”—a seamless customer experience is more than just flicking a digital switch.
Benefitting from a digital customer experience (CX) is “not a slam dunk,” IBM said. Instead, success relies upon two distinct factors—the willingness of the consumer to embrace the digital transformation and the ability of company business leaders to resolve pain points.
Companies have to make sure that they understand the consumer point-of-view—in other words, to empathize—and not just digitize customer interactions for the sake of it. Business leaders have adopted an aggressive stance towards digital transformation, but an ongoing problem is that this transformation can trigger what is essentially a digital disconnect.
“We found that many executives do not fully understand why consumers would be willing to try new digital ways of engaging with their companies,” said the authors of the report. “Two-thirds of executives have underestimated the role generational differences play in digital adoption, and too often digital CX initiatives have failed to meet customer expectations.”
Customer Experience Underpins Digital Transformation
For the purposes of this business value report, IBM surveyed 600 company executives and 5,895 consumers.
Enthusiasm for digital initiatives was far more prevalent on the executive side, with the expectation being that a proactive attitude to digital CX would bring a number of improvements. For example, a digital transformation will allow companies to quickly serve customers or improve customer insights. The latter will involve not only data capture capabilities but also (in theory) increase a company’s ability to solve customer problems.
However, the benefits of a digital transformation are not always echoed in the minds of the consumers. The report said that customers often experience “digital disappointment” with some people unaware that the digital option even exists.
The reasons for this customer-expressed disappointment are not hard to fathom.
People said the digital CX didn’t work as they expected, was not convenient, often hard to use and too confusing. When you consider that customer expectations are being set by digital experiences such as Amazon, Uber or Facebook that do work (for the most part) with a minimum of fuss, then it seems logical to assume that companies must demonstrate to people the benefits of their digital CX.
Add into the mix the baked-in brand engagement preferences of Baby Boomers versus, say, Millennials and it becomes clear that companies need to take a person’s digital mindset into account. Around 38% of executives said that age would have an impact on a digital CX strategy, with a high percentage of people aged between 18- and 34 more likely to be digitally engaged or tech-savvy.
Understanding customer motivation is what matters, the report said.
How consumers interact with nearly any type of business often comes down to habit. People shop at the same grocery for many of the same items each week. To check into a hotel, they go to the registration desk. They pay for purchases with a credit card. After a few experiences, they discover what works for them and what doesn’t, and they instinctively repeat these patterns. Why, then, would customers, particularly those who have been engaging and transacting the same way for years, if not decades, be open to doing something different?
The answer to this question should be the bedrock of any digital transformation. Yet again, however, there is a sense of dissonance between the decision makers and the customer.
Executives cite an improved sense of control, the customer’s digital savvy, improved convenience and ability for self-service as the factors driving customer willingness to try a digital DX initiative. With the exception of improved convenience, customers disagree.
People would prefer that a digital experience took less time, gave faster results and was less expensive. In fact, all of the factors cited by executives sit comfortably at the bottom of customer priorities—apart from the aforementioned convenience.
“Even with mountains of customer data at their disposal, executives are still susceptible to projecting their needs onto their customers with an inside-out point of view,” the report said. “Executives may be quite clear why they want to move to a more digital CX. But, unless they fully understand why their customers would change their current behavior to experiment with new digital experiences, companies risk designing initiatives that miss the mark.”
Digital First Impressions Matter
Companies don’t just become part of the aforementioned experience revolution overnight. The mobile revolution that led to our connected world unfolded over several years, impacting both human behavior and society as devices evolved. The customer experience revolution will go through the same set of growing pains.
With that in mind, the report said that company executives are increasingly eager to integrate a number of digital initiatives, including but not limited to location-based mobile apps, mobile payments, the Internet of Things, voice user interfaces and virtual showrooms. The recurring problem is that executive enthusiasm and customer adoption are often poles apart.
To alleviate the potential for digital disappointment, the report said companies or decision makers should ask themselves the following questions before launching a digital CX initiative:
- Have the initiatives been designed to address customer pain points or are they an internal consideration?
- Is innovation within the company walls limited by experiences in traditional customer-facing channels? In other words, can a company break through barriers to build game-changing experiences?
- What data is being used to build the kind of digital CX experiences that people have come to expect?
- What types of experiences do you think your customers want?
- How are you making people aware of different digital experiences and how do you differentiate between segments in a target market?
Finding the answers to these questions may be the most important part of any company’s digital transformation.
Success in terms of digital experience is a very fluid concept, so much so that a company can sometimes stumble upon a customer-pleasing formula almost by accident. To “win” in terms of digital DX, companies have to think big from the start to solve customer frustrations and engender delight, the report said.
A degree of digital savviness—for both customers and companies—is no longer enough. Technology for technology’s sake has limited appeal, even more so if companies see tech as the sole motivator for digital engagement.
“Customers have little patience with digital alternatives that seem to be more trouble than the traditional interactions they are used to using,” the authors of the report said. “Like store windows, digital first impressions matter. If your digital experience falls short of expectations for any reason, even interested customers may be slow to adopt or, worse, refuse to give you a second chance. It’s important to remember: the easiest thing for customers to do is continue to do what they have always done.”