Editorial
The Gist
- Digital necessity. Digital transformation in customer experience is essential for enduring brand success.
- Core foundation. A strong CX anchors successful digital transformation, blending tech and human expertise.
- Continual cycle. Ongoing adaptation and tech like AI and analytics are key to enhancing CX and productivity.
In today’s fast-paced business environment, a myriad of factors, including a challenging economic landscape, evolving technology and rising consumer expectations, have made digital transformation in customer experience necessary for short- and long-term success. To effectively navigate the journey of digitization, brands must achieve a delicate balance between competing today and planning for tomorrow. Maximizing present capabilities while developing or acquiring new ones to remain ahead of the curve is necessary to find and maintain a competitive edge.
In order to succeed in this regard, a brand’s foundational offerings must be rock solid before adding more layers of sophistication. For most, that foundation is rooted in an excellent customer experience (CX) that combines human expertise with technology to establish and nurture consumer relationships, build trust and foster loyalty. With that groundwork established, businesses can excel in digital transformation in customer experience by embracing agility, foresight and strategic partnerships to differentiate and drive share of wallet in an increasingly competitive environment, now and into the future.
CX teams need to design, build and deliver complete service innovation and navigate the complexities of digital transformation in customer experience. Adopting this end-to-end mindset is a three-step process:
- Identifying gaps in the industry and designing innovative solutions to fill them.
- Leveraging today’s innovation to build next-generation IT and technology solutions for tomorrow.
- Delivering a digital CX that excites consumers and goes above and beyond their needs.
Success only happens when all three elements work together in a continual cycle. The process does not end when delivery happens; it begins again with the next iteration of development. One eye must always be on the present, with the other focused on the future.
Navigating the Future: The Role of Digital Transformation in Customer Experience
According to Forrester’s 2023 U.S. Customer Experience Index, despite 80% of business leaders recognizing the importance of enhancing CX, only 6% of brands reported a significant improvement in 2023, down from 10% in 2022. The impact of bad CX can devastate the bottom line: 56% of customers would not purchase from a brand again following a poor experience. Studies indicate the opposite is also true: McKinsey research shows that improving CX boosts revenue by up to 7% and profits by up to 2%. Those might not seem like huge numbers initially, but that growth accumulates over time.
Brands must first focus on solidifying the foundational elements of CX and making investments to ensure that it remains strong. What are the drivers of high customer satisfaction and loyalty? Efficient operations, easy-to-use products and services, responsive customer support and a trustworthy platform that keeps confidential information private. Integrating new technology requires stable company infrastructure and employee education; with a superb CX, brands are better equipped to add new, innovative technologies, like generative artificial intelligence that further enhance the relationship between brand and consumer.
Digital transformation in customer experience means building a competitive advantage by continually deploying technology at scale, improving CX, and lowering costs. Successful digital transformation in customer experience increasingly relies on how companies become digital rather than how they use digital capabilities.
Successful CX teams:
- Improve channel orchestration with customer journey assessments. Lean Six Sigma and customer journey mapping prepare businesses to invest in the appropriate channels and conduct digital interventions. Identifying high-frequency points of journey abandonment and overlaying the proper solutions to alleviate bottlenecks is critical. A phased approach helps implement new digital levers over time for continual improvement.
- Refine employee management and reduce costs by sourcing and training talent. Beyond core CX services, like help desk support, inbound and outbound customer service, and sales and marketing efforts, CX service providers can help facilitate a customer-centric approach, streamline operations, and reduce attrition by sourcing, managing and training talent.
Related Article: How Focusing on People Can Help Your Digital Transformation Take Flight
Agility and Generative AI: The Strategic Duo Transforming Business Goals
Agility in business is vital, but it must be coupled with a forward-thinking approach and specific and measurable goals in mind. After all, brands shouldn’t adopt technology for technology’s sake. It may be tempting to incorporate the latest tech like generative AI because so many others are doing so, but it will only be fruitful if it makes sense for your business. Ask yourself: what does success look like for the business, how is the digital landscape evolving, and what future trends and challenges to prepare for. With this information, companies can collaborate to integrate new solutions at the right time.
CX teams with generative AI can source diverse datasets, train and validate learning models and refine those models through reinforcement learning from human feedback (RLHF). While generative AI-enabled chatbots can improve accuracy when trained on large, diverse datasets, the most effective way to teach them is through human feedback; AI technology is still only as good as its initial data and ongoing training. With humans in the loop across the generative AI process, chatbots can learn and adapt to human preferences, improving their accuracy and ability to understand prompts and respond in a humanlike fashion. In turn, by embracing the power of generative AI, brands can deliver personalized customer experiences at scale. Sales, marketing and product development can use the data that AI systems collect to develop customized messaging and product recommendations that fit each customer’s individual preferences.
Internally, AI serves multiple purposes. An AI chatbot can often handle simple customer interactions from start to finish without human support. AI can be trained and integrated with chatbots acting as co-pilots to assist agents and expedite customer support. Generative AI can comb through knowledge bases, customer data and other resources to provide customer service agents with instant, specific answers in real time. It can also write new external knowledge base content and enable customers with self-service capabilities to find answers quickly. The National Bureau of Economic Research found that generative AI significantly impacts productivity, boosting issues resolved per hour by 14%.
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