Thinking of a customer’s interaction with a brand as a journey offers numerous benefits. At its most basic, it allows you to focus on improving the quality of each customer experience while considering how each touchpoint influences the experience at the next. While we often think of a the positive effects of digital transformation in terms of changes to the internal operations of a firm—eliminating the siloing of individual departments and tasks, for example—as a concept, its outward-facing application is no less relevant, and in many ways similar.
So, what are the steps you should take to define the customer journey, and how does it fit with digital transformation?
In its first report on the subject, in 2014, The State of Digital Transformation, Altimeter Group went so far as to define digital transformation solely the context of customer experience: The realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle.
What makes satisfied customers so important? Because satisfied customers make more money for your company – and companies that have mastered digital transformation are prime disruptors for industries, according to Oliver Ehrlich, Harald Fanderl, and Christian Habrich from McKinsey & Company. “Across sectors, satisfied customers spend more, exhibit deeper loyalty to companies, and create conditions that allow companies to have lower costs and higher levels of employee engagement,” they write. “As digital pure plays such as Amazon, Apple, and Uber continuously reinvent themselves by delivering simple, immediate, and individualized experiences, even traditional business-to-business players in sectors such as chemicals and steel are making bold moves to build dynamic shared digital ecosystems around customer needs.”
“’Amazon-like’” has become an industry standard for customer experience, with the convenience of placing orders with one-click checkout, real-time feedback from other buyers and complete visibility on delivery status,” agrees Raman Katyal, CapGemini’s head of supply chain business services, in Supply Chain Digital. “For customers, the service not only meets immediate requirements, but also creates a need for something they may not even have been aware of until it was recommended.” But that requires an entire digital ecosystem in the background to make it happen, he warns.
McKinsey analysts specifically call on companies to launch an integrated operating model organized around customer journeys, or the end-to-end experience of a customer buying a product or service. They note, too, that companies that do so experience up to 15 percent revenue increases and simultaneous reductions in cost to serve of more than 20 percent.
Unfortunately, Altimeter’s most recent research, The 2017 State of Digital Transformation, indicates that the implementation of the customer journey is going down. “Only 34.8 percent of businesses report having completely mapped out the customer journey within the last year. This is a significant drop from our 2016 report where 54 percent of companies reported that they had completely mapped out or were in the process of mapping out the customer journey within the last year,” the company reports. “Although the customer journey is a chief catalyst for corporations to respond by digitally transforming those experiences, this year’s data shows companies still are not prioritizing customer-centered strategies.”
Legacy processes – especially paper-based ones – can particularly result in a suboptimal process, writes CapGemini in its report, Backing Up the Digital Front: Digitizing the Banking Back Office. While the report dates from 2013, its basic points are still true today: complex legacy IT systems, manual disconnected paper-based processes, and “siloed” data sources lead to high costs, poor agility, and, most of all, low customer satisfaction due to delayed response time and a lack of a seamless experience, the company writes.
That’s why it’s important to define the customer journey first and then use it as a map to determine the steps needed for digital transformation. If part of the customer journey involves having to track down a paper file and make sure it gets to the next person, that’s a prime area for digital transformation, both to make the process more secure and efficient and to make the customer happier.
That doesn’t mean that digital transformation consists only of digitizing existing paper processes. Instead, digital transformation requires looking at the entire process to see the ways in which digitization can completely eliminate steps. “The primary goal is to thoroughly rethink the way the journey works, instead of simply fixing inefficiencies along the way,” the McKinsey analysts write. In fact, they recommend “zero-based journey redesign,” or starting from scratch rather than trying to make changes to an existing customer journey, as doing a better job of eliminating unnecessary steps.
Deconstructing the customer journey can also reveal a surprising number of touchpoints that can serve as springboards for optimized customer experiences, writes Joerg Niessing in Knowledge. He gives as an example work he did with a Las Vegas hotel where they discovered that the average guest’s interaction with the property contained 125 touchpoints! That’s a lot of potential room for improvement using digital transformation.
It’s also important to ensure that, in mapping the customer journey, a company doesn’t focus on just the digital customer, even if the goal is digital transformation, writes I-Scoop, a business transformation consultant. “The customer experience plays a crucial role in digital transformation. Or better: many digital transformation initiatives arise from pain points, business/innovation needs and growth/transformation imperatives on the customer (experience) side of business,” the company writes. “Digital transformation on the customer experience level is not just a matter of the front-end and customer-facing functions, let alone touchpoints. It’s a matter of the whole organization and requires involving the back-end as well.”
Ultimately, IT has a major role to play in this entire process, writes Barb Mosher Zinck in Diginomica. “IT needs to be integrated with the business, but also able to work closely with other IT resources to get that complete cross-organization view required for customer experience and successful digital transformation.”
It’s said that any journey begins with a single step. The customer journey is the first step to digital transformation, and the CIO needs to lead that journey.