“Every company’s greatest assets are its customers because without customers there is no company.” Michael LeBoeuf”
Despite all the hype, digital transformation remains a highly mercurial beast to tame. Forbes estimated in 2016 that 84% of all digital transformation efforts fail, which, defeats the whole purpose of transformation as a whole. And with so much disruption happening all around, industry-wide platforms and the power of data, it is easier than ever to forget that every transformation is driven by a singular, defining truth: all projects must improve the life of the fast-changing consumer.
Michael LeBoeuf’s quote rings true in this regard, as it harkens back to the core fact that in the modern day and age, organizations are just out to service their customers. Overlooking this truth can inevitably bring out the harshest in the from of an existential crisis, best demonstrated by companies like Nokia, which went from being the largest phone brand in 2012 to stop existing altogether just two years later. Technology, in-spite of its obvious significance, will always trail the needs of the consumer but is the essential ingredient for businesses to stay ahead of the curve. And while there is no one way to achieve the right level of customer centricity, (or the right one for that matter), most digital toolmakers wish for these leaders to believe that a simple acquisition and implementation of their products/services can magically take these organizations into digital nirvana. The reality is far too complicated and requires a much deeper understanding of the new way of human thinking rather than simply relying on technology.
Some of the approaches below can provide perspective.
Consumers are Fast-Changing
Not only must modern enterprises keep in mind the importance of the consumer, but also realize that they are fast changing. The characteristics of the modern consumer have been discussed to the bone now, however, there are other cataclysmic changes being brought about by digital tools through their ease of information and communication accessibility. The digital phenomenon has had a major impact on how traditional marketing and consumer behavior models behave. For much of recent history, we’re used to the linear purchase funnel, which started at awareness and ended at purchase. The actual sales process today is much more convoluted than that, thanks to the rise of newer tools like social media and the internet. The modern purchase funnel (itself an upgrade over the century-old sales funnel) makes the cardinal sin of assuming that the marketing & sales teams have the responsibility for the education of prospects. Those days are long gone, as consumers now take many steps in the awareness and consideration stages themselves. The rise of social media channels has created platforms for consumers’ loved ones to share their voices and opinions, which takes an upper-hand over traditional marketing.
Loyalty is Dead; Data is King
With multiple substitutes breathing down their throats and their loyalties fickle than ever, modern consumers need to be understood to obtain success. Today, switching is as simple as installing a new app. More technologically-advanced (BigTech/FAANG) competitors continually blur traditional industry boundaries and add more convenience and mass-customization with reliance on cloud-based, agile business models. Today, any company can partner with relevant industry forces and come up with a digital offering that offers ease and convenience and dominate rapidly. No matter the industry, there’s almost always room for a platform-based company to disrupt. This was the lesson learned by finance world when Apple decided to enter payments through its Pay service (and a credit card in March 2019). Despite having no experience in the financial services arena, the Cupertino giant only needed to partner with bigwigs like Mastercard and JPMorgan Chase, as it already had a large customer base and needed to set up no infrastructure. Loyalties too can quickly change on intangible factors as misalignment over consumers’ values and their perceived image. Loyalty programs, while becoming more prevalent are becoming less successful than before. In our divisive world, even a seemingly-innocuous move could be turned on its head on social media, as Nike recently found out via its Colin Kaepernick campaign. The recent privacy awareness and data protection legislations has also complicated the monitoring of consumers, making it necessary to maintain a spotless security record, with laws like GDPR ready to slap companies with millions of dollars in fines.
Customer Focus Directly Hits the Bottom Line
Perhaps, the most obvious reason to adopt a customer-centric strategy would be that it directly affects profitability. KPMG recently noted in its Competing for Growth paper that for an industry like packaged goods, customer-centric companies can have growth almost 7 times as much as their non-customer centric rivals. Of course, that comes off as no surprise at all. Using technology and data, customers’ digital profiles can be created which allows representatives to better address issues and roll out custom-built solutions, as the insurance company iSelect has been doing to lucrative effect. Further, the workforce develops digital skills that help take care of problems with increased efficiency. These advantages and skills are difficult to replicate by competitors; hence, they can serve as a lasting advantage. Equally, failure to move can result in severe losses to the business.
Disruption Now Comes from the Customer
Whichever way we look, modern enterprises represent the Darwinian premise of survival of the fittest in the barest, primitive sense. At the heart of this mess stands the modern customer, who, if not alone, is by some distance this change’s biggest influencer. As the recent Salesforce State of the Connected Customer research showed, around 76% of consumers found it possible to take their business elsewhere upon dissatisfaction. With technology leveling the playing field, organizations no longer have the option of mistaking reality for something else; it is truly the modern consumer pulling the strings in between the lines and enabling disruptions to occur. The research also suggested that nearly two-thirds of all employees want companies to release more products with more innovation than ever. It is her demands and expectations which are reshaping entire industries with more agile and customizable digital options, given that roughly 6 in 10 consumers in the research found tailor-made experiences based on past engagements to be more important (look at iphones). The rise in technological capabilities is also making it easier than ever to track the consumer and obtain meaningful insights. Cookies track users online for retargeting purposes, IoT gauges the customers’ physical location and AI helps improve predictability. These instruments can also raise privacy concerns among consumers, which is why 62% of consumers are more wary of data breaches today than ever before.
In the end, it is important to notice that most organizations realize the importance of understanding the consumer, but still fail to address the gap between customer expectations and internal capabilities. Forrester recently reported that 37% of companies understand their consumers, while just 10% could make real-time strategic moves based on their actions. It is about time these organizations started looking at their consumers as determinants of brand value and future relationships over entities that they only have to strategize and execute on. What’s clear is that 70% of organizations worldwide are underway in their digital transformation journey, 84% of which end in failure. In order to reboot this long series of failures, they need to take a more customer-centric focus rather than implementing tools and technologies listlessly.
So where does the Digital Journey begin?
The TransformX Approach to Digital Maturity
TransformX is a global firm focused on Human-Centric Transformations (Employee Enablement and Customer Engagement Solutions). TransformX Employee Enablement Solutions are built on the TransformX Digital Maturity Model that assesses, enables and empowers forward-thinking organizations in taking on the demands of the next generation of digitally connected businesses. The 3 phase model includes Diagnostic Assessments that provide a baseline for how Digitally Mature the organization and its employees are and identifies the areas that need skill building across all levels of the organization. Transformation Roadmaps strategically bring customized Learning Journey’s, Innovation focused events, deep dives, and workshops into the mix and build the requisite skills needed to innovate for the future. And finally, Partner Assisted Executions are carried out for a specific solution, process or innovation areas that are identified during the Assessment or the Roadmap phase.