Digital transformation & customer experience: what’s the connection?

Akshaya SrikanthContent Writer

May 18, 202210 MINS READ

The ways in which most businesses now operate and interact with customers is drastically different from what they were a few years ago. For example, customers can research their options, learn about other brands, and make purchases all from the comfort of their own homes.

And though this has meant a lot of change and adjustment for businesses, many of those changes have been for the better. This is because digital transformation and customer experience influence each other. Let’s unpack how and why, and dive into how you can transform your business in this blog.

What is digital transformation?

If you’re unfamiliar with the term, “digital transformation” refers to the ways in which businesses change to adapt to new technology and consumer preferences.

It’s essentially an umbrella term for the many changes that companies have had to make (and will continue making) to keep up-to-date with advances in tech.

With most conversations, transactions, and businesses going online, digital transformation is an inevitable evolution that every company, no matter the industry, will have to go through. According to research from PWC, 60% of senior executives believe that digital transformation will be critical for business growth in 2022.¹

So if your business hasn’t yet taken steps toward adopting digital technology, it likely won’t be much longer until you need to make some adjustments to improve the customer experience you deliver and keep up with your competitors.

What do today’s digital customers expect?

For your digital transformation efforts to succeed, you need to understand what your customers truly want. Here are four customer insights that are common across industries:

1. Online-first interactions: Having an online presence enables customers to communicate with businesses effortlessly, on channels that they prefer. Studies have also shown a 160% increase in the frequency of digital purchases in the past two years. Businesses need to embrace a digital-first mindset to stay ahead of the game.

2. Speed: The want-it-now culture dictates customer behavior now more than ever before. 80% of customers demand quicker responses from businesses. Time saved is money made, so you cannot afford to keep a customer waiting today.

3. Omnichannel experiences: If there’s one thing that’s worse than keeping today’s customers waiting, it’s delivering inconsistent, fractioned experiences. The kind of experience you provide directly impacts your bottom line. Companies with the strongest omnichannel experiences retain 89% of their customers on average, compared to 33% for companies with multichannel customer experience.²

4. Messaging and mobile-first conversations: The convenience and ease of mobile-first engagement make it a non-negotiable for customers today. Your customers want you to engage with them on their favorite channels and mobile apps, including WhatsApp, Apple Business Chat, LINE, or Facebook Messenger.

In addition to learning about customer trends, it’s also essential for you to understand why digital transformation is now more critical than ever, owing to the newer modes of working that surfaced in the past two years.

How does customer experience drive digital transformation?

Many of the advances we’ve already seen, like e-commerce shopping, personalization, and new communication channels, have been mostly for the benefit of consumers. And companies are on board with this because experience-led companies have 1.6 times higher customer satisfaction rates and 1.9 times higher average order value.³

Plus, digital transformation and a focus on customer experience can generate a 20-30% increase in customer satisfaction and economic gains of 20-50%.⁴

Considering that each experience a customer has with a brand impacts their perception of the company, incorporating technology that improves customer service has a lot of potential benefits. This includes seamless and personalized experiences across all touchpoints, more convenient ways to connect with a business and more autonomy. So much like how digital transformation impacts customer experience, the vice versa is also true.

New technology is continually developing to cater to evolving customer demands. The digital transformation we’ve seen so far is likely only the start of the changes we’ll see over the coming years. Here’s a quick overview of today’s customers’ needs and preferences based on Freshworks’ CX Trends 2022 report.

How has covid19 expedited digital transformation?

With the global pandemic imposing a lockdown, most businesses shut physical shops and offices and transitioned their business online. Everything from engaging with customers in-person to moving away from on-premise tech changed in a short span of time.

According to McKinsey research, businesses are three times more likely to say that at least 80 percent of their customer interactions are digital when compared to before the crisis.

The pandemic accelerated the dependency of digital-first workflows and modes of working across departments in an organization. However, customer service, in particular, witnessed huge changes. This included:

– Adopting digital channels of communication like live chat and messaging to replace in-person real-time conversations

– Bringing all agents and different teams together on the same page

– Onboarding and training teams remotely using chatbots and internal knowledge bases

– Dealing with sudden and unexpected spikes in volume

– Substituting field visits with video assistance

And the list doesn’t end here. The lockdown has opened doors to possibilities that we didn’t know existed before, further altering customer tastes and preferences.

So if you’re looking to improve the experience your company provides to customers, it could be time to start adapting to advances in technology and finding ways to incorporate more digital elements into your strategy. Here’s how you can go about doing that.

How does digital transformation impact customer experience?

Digital transformation has the potential to influence every aspect of a business. But ultimately, it’s the customer and the experience they receive that is impacted the most. Consider the outcomes that digital transformation brings to a business. Apart from the mentioned benefit of simply meeting customer expectations, you also get:

– Unified customer data

– Streamlined processes

– Data-driven insights

– Better employee engagement and culture (improved collaboration)

– More transparency

– Improved resource and supply chain management

When a company goes through digital transformation, everything from the way customer data is stored to the channels of engagement changes with the customer at the focal point. In fact, 54% of transformation efforts continue to focus on modernizing customer touchpoints and 45% for enabling infrastructure.⁵

With better data management, seamless processes, more empowered employees, and integrated technology, each team is better positioned to do work that impacts customer experience significantly post digital transformation.

5 ways to use technology to improve customer experience

Considering the massive scope of technology’s impact, you might face difficulties with knowing where to begin. And while this list is by no means comprehensive, the following five tips will help you develop a digital transformation strategy that can positively influence the customer experience you provide.

1. Make information available online

One of the biggest benefits of the shift toward digital is also one of the simplest: The ability to store information online using cloud-based technology. While businesses used to save data locally, advances in storage and security have made it common practice to use online methods.

Maintaining records online is foundational to breaking data silos. Different teams are responsible for a certain set of data –

marketing teams have campaign and conversion data,
sales teams record in-depth customer data and pipeline information, and
product teams have adoption data.

You have the opportunity to unify all of these data sets when it’s available online. For instance, using a CRM tool, you can view these teams’ information with a few simple integrations. This way, information about a customer’s lifecycle, interests, content consumed, etc, can help customer-facing teams engage in more meaningful conversations.

When you store information in paper or on-premise solutions, getting a complete picture of the customer journey might be time-consuming and laborious.

On the customer’s end, making information available online in the form of FAQs, help guides, and tutorials, helps them find the answers they want and eliminates the need to speak to an agent.

For example, many online retailers, like Sephora, now allow customers to access details on all of their past purchases on the company’s website. If a customer wants to track, cancel, or return an order, they can do so on their own — without waiting for assistance from the company’s customer service team. This not only improves the digital customer experience but also frees up support agents’ time to help customers with more complex questions and issues.

2. Embrace automation and AI

Automation and AI have come a long way over the past few years, especially in customer service. The terms used to call to mind images of rudimentary chatbots that provided canned responses to basic questions. However, automation now refers to a range of things used to improve different parts of customer experience and customer service. This includes:

Ai-enabled chatbots

Chatbots powered by artificial intelligence can now completely handle tasks end-to-end. You can build chatbots to automate processes related to booking, billing, refunds, and assisting customers around the clock.

Workflow automation

Performing repetitive tasks can into your team’s time and energy. Automating tasks like following up, sending CSAT surveys after every interaction, and ticket categorization, prioritization, and assignment, can reduce the amount of time your team spends on basic processes, and help them serve your customers more efficiently.

Ai for customer service agents

While customer-facing AI is quite popular, using AI to simplify the lives of customer service agents is also gaining popularity. Customer service leaders around the world have recorded a 40-49% dip in service quality, first response times, and agent productivity due to the pandemic.⁶ Investing in agent-facing AI can ease the burden on agents by:

– offering self-serve modules with pre-configured flows that guide agents with the next best step

– automating complex backend processes

– providing learning resources, FAQs, and how-to guides that agents can refer to whenever they need assistance

If you’re not yet using automation as part of your customer service strategy, there’s no better time to start than now.

3. Personalize customer experiences

The more relevant your offers are to each of your individual customers, the more likely they’ll be to take advantage of those offers. That’s why many companies now use customer data to provide personalized experiences.

If you’ve ever shopped on Amazon, you’ve likely seen a section of recommended products. Instead of merely featuring products that are popular with other shoppers, the site shows custom lists tailored to each user’s browsing history.

Of course, the way you adopt this strategy for your site depends on your business model and goals. For instance, you can also personalize experiences simply by engaging in contextual conversations. This way, the customer takes home a seamless experience without needless back and forth exchanges.

But no matter what you’re hoping to accomplish, tailoring your content to individual users can go a long way in getting them to take action.

4. Create customer-centric experiences

As you look for ways to adopt new technology, remember to keep the focus on providing value to the customer. After all, if the goal is to create a better customer experience, you should be sure that each step you take toward the digital world benefits them in some way.

Don’t create an app for the sake of being able to say you have one and don’t feel like you need to invest thousands of dollars into a new site feature just because one of your competitors has it.

Instead, look for areas where customer or user experience needs improvement and figure out how technology could help you solve those issues. After all, if your company’s digital transformation centers on supporting and engaging customers, it’s much more likely to help you reach your customer experience goals.

Business owners and marketers now have access to more data than ever before.

And while all of this information can be overwhelming if you’re not sure what to do with it, it can be extremely helpful if you use it to find new insights about customer journeys. Then, you can use your analysis to improve your product and customer engagement strategy.

5. Offer omnichannel assistance

If you use multiple tools for engaging with customers on different channels, you know how painful it is to get access to:

– historic conversations

– customer’s information

– agents who previously engaged with the customer

Not being able to pick up from where you left off is the biggest downside of multichannel communication. The customer feels the impact of this because the experience they receive is slow, broken, and inconsistent.

What can help you do that is using a single tool for managing conversations across channels, aka an omnichannel customer service software. And the best time to unify your channels is when you’re going through a digital business transformation. You can invest in an omnichannel customer service software that helps you deliver fast, personalized experiences with ease.

With a tool like Freshdesk, you can even incorporate all the customer preferences and points we discussed, including adopting messaging channels, deploying chatbots across channels, and creating personalized, customer-centric experiences.

Conclusion

Technological advances over the past decade have already made a significant impact on how businesses interact with customers. Today, this digital transformation shows no signs of slowing down.

And while some companies are resistant to adopting new technology, those who choose to embrace it have the opportunity to create even better experiences for customers. You can use it to provide helpful online resources, automate specific tasks, and even collect data in ways that will help you more effectively serve each of your customers.

As long as you focus on creating better, more convenient experiences for your audience, there are plenty of ways to integrate digital transformation initiatives to benefit your customers, help your team serve them even more efficiently, and give you a competitive advantage.