What does ‘digital transformation’ really mean for a company? International management consulting firm Accenture strongly recommends that businesses should build their transformation strategy on the basis of the customer experience.
A satisfied customer is potentially a loyal customer. Up to this point Accenture Digital – the digital technology arm of Accenture – is not telling us anything new in its report ‘Digital Transformation: Re-imagine from the outside-in’. However, the consulting specialist goes beyond the fairly obvious basic link between the quality of the user experience and the revenue which customer loyalty is likely to bring in – in terms of repeat purchases, lower switching rates and increased word-of-mouth recommendation – and shows us just how close is the correlation between the two. The report quotes research from Forrester which reveals “potential loyalty-related revenue boosts of $3 billion for wireless service providers, $2 billion for airlines and $1 billion for hotels”.
Customer experience leaders outperform the market
While there is hardly any need nowadays to explain the benefits enjoyed by companies that focus hard on customer experience – ranging from higher earnings to greater name and brand recognition – the report strongly recommends that companies think their digital transformation through carefully in terms of the customer experience. In other words, when building a digital transformation strategy start with the consumer. In 2015 this has become an absolute must, says Accenture.
A changing customer profile
Focusing on the customer experience is of course easier said than done when customer needs are constantly changing, driven to a large extent by digital technology. Customer demands have also increased. ‘Consumactors’ nowadays know how to take the reins and assume the role of co-creators of products and services and content to which they have access. Moreover they have the tools to obtain the best information and to publish their feedback – through the social networks, brand websites, online price comparison sites, and so on.
So what are the consequences of all this for a company? The list of requirements is expanding and becoming more complex by the year: it is now vital to ensure consistency across all channels and to be completely synchronised along the entire value chain, states the report. And brands cannot afford to relax their efforts one little bit. An oft-quoted figure is that 66% of all consumers worldwide who switched supplier companies in the past year did so because of unsatisfactory customer service.
Is there a miracle recipe? No. Each company needs to manage its own digital transformation and the way it experiences innovation. However, Accenture has drawn up the skeleton outline of an optimised digital transformation.
Optimising the customer journey and aligning the company ecosystem accordingly
Firms should first go back to basics: build the ideal customer journey and then ‟align the parts of the business that customers do not see – internal operations and technology infrastructure – because these elements make or break the customer experience,” the Accenture Digital report argues. Of course this implies an omni-channel presence but first and foremost it means understanding customers and what they really want. For instance, the report’s authors attribute Amazon’s success to its platform which makes it “easy for [customers] to get what they want hassle-free, while continually raising the bar on customer experience.”
However, firms also need to know how to put tools in place to measure performance and to be able to react according to the results. BMW has recognised the need to align its internal business operations around its customers. The German auto-maker has implemented an eKanban digital solution system with car seat supplier Lear Corp, designed to streamline the supply chain.
The building blocks of a digital business
Last but not least, businesses need to build a flexible platform featuring optimised infrastructure and content. The technologies used must be ‘scalable’, and capable of fast deployment when the need arises. The report cites the example of a company which is creating a comprehensive digital dashboard architecture to provide business intelligence for global marketing initiatives.
Aligning the three key elements – delighting customers, re-orienting the business and creating a flexible platform – should give companies every chance of making trouble-free progress along the road to complete digital transformation, the Accenture experts argue.