By Shikha Devadiga, Associate Partner - UX & Research at Red Blue Blur Ideas (RBBi)
As companies across the globe face mounting pressure to digitize their services, there’s a growing need for a customer-focused approach to digital business transformation (DBT). 88% of customers expect accelerated digital initiatives from companies after the pandemic (according to Salesforce), resulting in DBT investment projected to exceed $100 billion in MENA.
Today, most of our clients approach us seeking “digital transformation done right.” And yet, many seem at first to misinterpret what DBT is truly about.
Often, when companies approach DBT, they focus on the term “digital” transformation and neglect its true purpose: to relentlessly deliver customer value.
Perhaps it’s because of the word digital, or because it’s historically been pushed by tech companies, but clients too often assume their core task is about choosing, purchasing, and implementing new software to run operations more efficiently. The biggest shift in the last decade is not the type of software people use, but how and when they want to interact with brands, what they expect, and how easily they will switch to another company that offers a better customer experience.
70% of DBT fails (according to Forbes), and there’s a pattern: companies implement new tech tools for themselves rather than for their users, costing them more customers than it brings. If you’re considering or undergoing DBT, there are several risks you cannot ignore:
Putting customer needs second
When DBT is not built on rigorous UX research, the brand-new tech solution overlooks the most important aspect of the transformation: the people who use and interact with the technology.
No matter how fancy the software, solutions will be perceived as complicated, difficult to use, and not user-friendly. Poor implementation can result in a 75% decrease in customer satisfaction, according to the Stanford Persuasive Technology Lab. User frustration ensues and soon enough, a large chunk of your captive audience is already seeking alternative solutions.
By making the user experience a top priority during DBT, companies can ensure that their efforts meet customer needs and result in increased satisfaction, adoption, and success. A 1-point improvement in the user experience index (UXI) score can result in a revenue increase of up to $100 million for a company with $1 billion in annual revenue (according to Forrester Research).
Increased support and operational costs
When we onboard a new client, we often notice they built their touchpoints in isolation, and only treat the back office that connects them all as an afterthought. In their pursuit of efficiency, they typically bring in a new CRM, AI tool, or personalization engine to run operations without thinking of it as an integrated solution in their digital ecosystem. The result? Some processes get more efficient but new problems arise: complex systems with longer learning curves, increased staff training needs, and circumvoluted customer support processes.
To avoid this bad surprise, an effective experience-driven approach prioritizes the “why” before determining the necessary tools and resources. This approach bridges the customer’s needs with the capabilities of the system/process to create better value, increased agility, and improved communication across departments. The result is a more efficient and integrated system with processes for faster and more accurate results, optimized resources for reduced costs, improved data analysis for quicker decision-making, and new customer-oriented experiences. Business executives claim a holistic experience transformation helps them meet customer expectations and improve operational efficiency by 40% (according to PTC).
Pushing the wrong feature/solution
When companies do not focus on creating a positive customer experience and instead prioritize technology, the potential of DBT is limited and the wrong service or a failed experience may result. This can result in wasted funds on developing services that do not deliver value or resonate with customers.
For example, automation features in CRM tools, like sending a series of follow-up emails to a customer after a sale is made. For the business, this may seem like a feature that helps remind the customer and is slapped as a default feature in an “out-of-box” solution. But this approach prioritizes the business’s desire for efficiency and productivity over the needs and preferences of the customer.
As a result, customers may feel bombarded with unwanted communications and view the business as impersonal and uninterested in their needs. This can lead to a decline in customer satisfaction and ultimately hurt the business's reputation.
In conclusion, companies need to invest in research and development efforts around creating better user experiences if they want their transformation projects to succeed in the long run. The cost of neglecting customer-focused experience must be taken into consideration when planning digital transformation projects.