Mixed Responses for Digital CX Adoption
Digital transformation is the latest buzzword, with organizations wanting to incorporate advanced technologies to improve experiences in different aspects of their business. Customer experience (CX) is also being revamped and digitally transformed to improve their engagement and, therefore, retention. However, an IBM study on digital CX adoption has revealed that these customer experience initiatives are falling short of meeting customer expectations.
The IBM Institute for Business Value (IBV) has published the findings of its study titled “The Experience Revolution: Digital Disappointment — Why Some Consumers Aren’t Fans,” based on the responses of over 600 executives who have introduced digital CX services and tools in their organizations. The survey also collected the responses of over 6,000 consumers worldwide to learn of their experiences and their attitudes toward the initiatives. The main finding of the study was the disconnect between what executives “think” the customers want, and what the latter actually prefer.
Companies are rolling out digital CX capabilities in the hope that they will enable them to enhance their customer service for quick resolution of problems. Incorporating Internet of Things (IoT) capabilities, virtual reality (VR) and augmented reality (AR) experiences, Amazon Go’s “just walk out technology,” and mobile experiences are just some of the ways in which customer involvement is being enhanced. Simultaneously, companies are also tapping into the data provided by these new digital interactions to enrich their customer insights.
The survey found that around 86% of the executives work for companies that are planning to introduce mobile apps that can be used by customers in physical locations. Nearly 85% of the companies were planning to introduce mobile payments, 80% were planning to use IoT in appliances and automobiles, 80% were planning to use location services like NFC and GPS, 70% were planning on using voice commands like Amazon Echo, in order to improve their customer experiences. Other ways to improve customer experiences included click-and-collect capabilities, where purchases can be made online and collected from physical stores, incorporation of RFID technology, VR, and AR.
The IBV study finds the following three major disconnects and misconceptions between companies and their customers:
• Motivators: Digital CX initiatives are being launched by companies without properly understanding the key motivators that will encourage their customers to try out the new initiatives. Humans are primarily creatures of habit. Companies should try to ascertain how they can lure them out of their comfort zones to try out the new CX. Such analysis should be the foundation of any new CX. The IBV study found a major disconnect between what the company executives thought were important factors to the customer and what the customers actually preferred.
“Seeing the world through the eyes of the customer is not always easy,” says Mark Hurst, founder and CEO, Creative Good. “Yet it is vitally important. A team can amass all the money, talent, and technology in the world, but without also considering the customer’s perspective, any innovation risks failure.”
• Age: The impact of age on consumer interest in digital experiences has been miscalculated. The IBV study revealed that 63% of millennials, 48% of generation X, and 39% of baby boomers were excited about digital CX technologies. The older generation had lesser preference for new digital experiences. About 32% of the executives felt that age would not have an impact, and another 30% were unsure about the impact of age on the adoption of CX.
“The lesson here is that even though we are well into the digital age, and the pace of change is accelerating, eager adoption of digital CX by all should not be assumed. Companies that simply launch new digital points of engagement and expect customers to flock to them are putting their investment at risk, especially if there are significant numbers of customers who aren’t inclined to shift to digital on their own,” says the study.
• Disappointing experiences: The initial digital CX experiences have been disappointing for many customers and many have decided not to use these experiences for regular use.
“Considering that consumers’ expectations are being set by digital leaders like Google, Amazon, Apple, Uber and others, the bar is high. Companies need to clearly demonstrate the functionality and communicate the benefits of their digital CX so customers understand precisely what they can do and why they should give it a go,” says the study.
To enable more adoptable CX, the IBV study recommends that companies should focus on meeting their customers’ expectations, instead of their own, while designing CX. The root motivations, pain points, and desires of the customers should form the foundation of any new CX. And finally, the marketing strategies of companies should always be aligned to address specific needs of the company’s customer base.
“Companies have an opportunity to win and lose customers solely based on the quality of the experience they provide,” says Robert Schwartz, global leader, Strategy & Design, IBM iX. “It’s not enough to adopt a one-size-fits-all approach. Companies need to provide personalized and individualized experiences in order to authentically build their brands. With customers of certain demographics, this already matters far more than branded communications.”