The Customer Experience and Digital Transformation

We are in the midst of a transition. These are times of constant, rapid innovation, times in which we believe in technology as the main provider of solutions for human lives. There has also been a change in the traditional engagement between salespeople and consumers, companies and customers, and brands [WE1] and people. When all these factors are combined, the focus has shifted away from the product—that is, the object that is sold, purchased or desired—to what has become known as the “experience.” We understand the experience as all interactions a person has with a product when making a purchase decision. We can define the experience cycle in five stages:

Now, another result of this shift has to do with the fact that the experience cycle has no clear origin or ending. Instead, the experience cycle continuously permeates the relationships between companies and people. The experience does not start or finish when a person purchases—or decides not to purchase—a product. It’s a daily interaction involving multiple channels (digital and traditional advertising, social media, recommendations by others, etc.).

Consummity. In-Depth Investigation.

The question of how enormously important the client or consumer experience has become and why companies are investing so heavily in learning more about the experiences of their customers is a very compelling one. At DatosClaros, we have been using our online customer community, Consummity, to understand more about the person-customer or person-consumer who is immersed in this digital transformation. To date, we have worked with more than 1,500 participants who have spent six months on average in our online communities [WG1] . We have received a total of 36,000 responses in our weekly activities, which pose a range of questions on how participants relate to the changes of the digital transformation era along with specific questions of interest to companies. We work with various industries, from banks and insurance companies to major beauty and retail brands. In this regard, although each company clearly builds a unique relationship with its customers and has its own trajectory, some lessons apply across the board.

How do people experience the changes in customer service that have accompanied the digital transformation era?? What are their preferences? What advantages and disadvantages have they noticed? What value to they attribute to the increased use of technology in customer transactions? What channels do customers value? What aspects of customer service make a company stand out from the rest?

These and many other questions guide the corporate research agenda. Based on the responses of the people who have participated in Consummity, we have come up with some answers, and we would like to share an initial summary of the opinion trends. It is important to bear in mind that these conclusions are part of ongoing research and are limited in scope to the digital transformation as it is currently taking place in Argentina.

Changes in Customer Service Models: From “Face to Face” to Digital Interactions.

In the past fifteen years, the transformation of the customer service models of major retail brands has had a major impact on how people relate to companies. Though many of the new service models are quite similar, each company is making the transformation in its own way and offering different alternatives. One particular focus is improving e-commerce experiences, which offer two benefits: they reduce costs and facilitate service for a great number of customers. However, there are as many strategies as there are companies, and sometimes companies forget or overlook the fact that each person builds relationships with any number of companies.

Digital transformation processes take a toll on people. Although in some cases, they represent a clear improvement, they also involve effort, fatigue, a need to adapt and constant learning on how the new channels work—learning that can be resolved digitally. What is fundamental here is that despite the flexibility and speedy services digital models provide for simple, automated transactions, people continue to value “face-to-face” service models. Therefore, there is a demand for a credible, reliable, attentive human face to the service a customer receives, whatever channel they choose.

To be successful and accepted by people, any customer service strategy or initiative should incorporate a human element. In this regard, the models people value vary: telephone customer service that allow callers to speak to a real person, service provided via chat or WhatsApp, non-automated e-mail or spaces for communication on websites.

People's willingness to complete digital transactions depends on trust and security. They need to trust the company with which they are interacting and feel secure that the company will keep its promises and uphold its side of the agreement. They need to trust that if there is an issue, the company will provide an effective and uncomplicated channel to resolve it. And they must know that their data is protected and transactions are secure.

The omnichannel experience. Is it a need? A problem? A challenge?

One of the strategies most talked about today is omnichannel. Companies are increasingly promoting the use of channels that allow them to facilitate customer service. But is omnichannel an efficient response to people’s customer service needs? Does simply adding more channels for customer-company interactions suffice? Although this is an ongoing process and debate, a consensus has been reached on certain things. For most people, customer service continues to be associated with a desk where a person is waiting to help with what they need. What helps reduce the effort involved and yields a good experience? Being able to resolve what they came for during that first contact at the customer service desk. There is still a widespread belief that a visit to customer service involves long lines, getting sent from one area to another, several hours, and great effort to resolve an issue.

In this regard, an omni-channel strategy in and of itself does not address this. If a company offers multiple channels for customer contact, but a customer gets passed from one to another without being able to resolve an issue, the feeling and experience are both negative, no matter how digital or innovative the new channel may be. And, if the customer ends up visiting an office, branch or store to resolve the issue in person after attempting to do so on three or four digital channels, the negative impact can be even more severe. The question, then, is not merely about offering multiple channels for customer service but about finding the most appropriate channels for your customers. It is also about generating a customer service experience in which questions, transactions and inconveniences can be addressed in whichever channel the customer chooses. The challenge of efficiently managing channels and informing customers what can be done in each channel is a task companies must address head on. If the customer has to guess which channel does what—or has to resort to more than one channel to resolve an issue—he or she ends up feeling like the whole thing has involved too much effort, generating distrust and irritation with digital service models.

Perceptions about digital service. Resistance or integration. Challenges to digital access.

The digital era rests on one fundamental conviction: technology makes life easier and helps us resolve problems. Although this belief is widespread, and there is a broad consensus on the benefits of technological development, this doesn’t mean that everyone takes the same approach or feels the same way about technology tools or digital service models.
We believe that the following customer segmentations can contribute to a more robust understanding of where the digital transformation is at:

These are only some of the most visible segmentations. Any digital transformation strategy should first define who the customers are, who is the target of each interaction, and what each type of customer needs. Is the transition to digital customer service the right decision for my company or service? Bearing in mind the complexities involved in customer engagement will allow you to build digital transformation strategies that integrate and accompany people in the learning and adaptation process. 

Customer Loyalty in the Digital Era: Are Incentives the Key? Awe and Frustration. 

Besides working on digital transformation strategies, companies have developed ever-more complex customer relationship management (CRM) and loyalty programs, allowing customers to accumulate points and exchange them for rewards [WE1] . The aim is to reward loyal customers and thus build lasting, long-term relationships with them.

However how much do loyalty programs or CRM actually affect people’s perception of a company? In Argentina, where inflation is extremely high, it is almost impossible for customers enrolled in points programs to accumulate enough for big rewards. In this context, how important are these programs for customers? And on the other hand, as the digital transformation moves forward, what fosters customer loyalty? What generates long-lasting relations with customers?

Digital transformation processes have also had an impact on customer relation strategies. From the perspective of consumers, the emotional reactions to the digital era generally fall in one of two categories: awe and frustration. .

Awe appears whenever innovation facilitates something a consumer wants to do, i.e. when a certain transaction becomes simpler and more straightforward, or when an ingenious, intuitive and surprising way of doing something appears, allowing customers to take care of what they need digitally. Awe is connected to entertainment and this explains the growing influence of gaming in the creation of digital products. When digital service models inspire awe, the emphasis is on the importance of resolving issues, getting questions answered and completing transactions. Creativity plays a major role in awe and in generating effective mechanisms for resolving customer issues. A company whose digital channels optimize the customer experience and help customers take care of what they need is much more likely to generate a lasting relationship, regardless of whether or not it offers a rewards program.

The digital era has also produced a certain level of frustration, as seen in experiences people recount. There is a high level of recall of digital transactions that were unsuccessful due to issues not related to the user, confusions stemming from not fully understanding how to do what they needed, or information that was either unclear or simply nowhere to be found. Such experiences produce discouragement and anger. This highlights an essential question, who do I contact if I have a problem? Who provides a guarantee for what the company is offering me? Many companies have developed alternative channels to address issues that can appear in automated transactions. There are chats, online customer service, service hotlines, and emails, to name a few. It is important to understand that users who resort to these channels have had a bad experience in a digital transaction, which means they do not begin the interaction very well disposed.

According to customers, the way in which a company resolves issues, complaints or problems is what stimulates loyalty. At this point in the experience, the belief in the effectiveness of digital transactions comes into play, the conviction that if I have a problem, there is someone there interested in providing me with a solution, i.e. it is not necessary to visit a branch or go out searching for someone to take responsibility for the problem. This moment of the customer experience is fundamental to defining future relations, to deciding whether or not to recommend a company, and above all, to deciding whether to continue building a long-lasting relationship with the company.

HToday, the clincher is not to be found in discounts or coupons: it’s in providing the best experience possible and processes designed to optimally resolve issues when automated tools fail.