Customer Experience

Why Digital Transformation Isn’t Enough; The Power of Customer Experience Transformation as a Business Driver

Kelly Gratz
Thanks to a combination of technology advances, changing consumer behavior, and a bit of corporate follow-the-leader – companies across every industry have been focusing on “digital transformations” of their business operations and processes.

However, these Digital Transformations alone aren’t enough to create the advantages needed to grow in this hyper-competitive, customer-centric world. Developing a strong, long-term Customer Experience Strategy is what will take these digital investments to that next level.

Clearly, a Digital Transformation is needed by many organizations. Their technology is outdated and not keeping pace with the business needs or today’s competitive landscape. But since the majority of Digital Transformations are focused on maintenance versus innovation, the ROI is often negligible. 

So, what exactly is a CX Transformation you might be asking? 

Customer Experience Transformation is the ongoing improvement of a company’s offerings, processes, technology, and culture to enhance customer value in every interaction, enabling sustainable growth and competitive advantage. 

This comprehensive look at all aspects of an organization that impact the customer experience – including technology – has repeatedly proven valuable to the success and growth of companies. Just look at the numbers below. 

The Benefits of Prioritizing Customer Experience 

With both competitive pressures and increasing consumer expectations, the customer-driven era is here. And those companies that prioritize continuous CX improvement are winning. In fact, they’re growing their revenue nearly 2x times faster on average than those that are not putting CX toward the top of their list. 

But it’s more than just increased short-term revenue. Recognizing, prioritizing, and capitalizing on the importance of CX also creates: 

For those still not convinced of the advantages of a CX Transformation: 

Measuring the Impact of Great Customer Experience 

The concept of a better Customer Experience leading to increased revenue, while simply intuitive to most people, isn’t always easy to measure or forecast. If a customer has a good experience, they will buy more, pay more, come back for more, and make more referrals. All of those things will increase revenue and profits. But how can we predict and prove this cause and effect? 

In 2022, Forrester revealed a model for calculating how CX improvements drive business growth through increased customer loyalty. The full study looked at 12 different industries – from retail to automotive to banking – and showed that the benefits of improving CX index scores by just one point can be tremendous. 

In one example, Forrester calculated that for mass market auto manufacturing, improving CX by one point could equal more than $1 billion in additional revenue “because improving CX increases the chance that customers will buy their next car from the same brand and take the car to the brand’s dealership for service needs.” 

And these results aren’t specific to car companies.  

Investing in CX has repeatedly proven valuable, but it’s crucial to remember that achieving results like these requires a commitment and an investment. A recent study showed that companies “with higher-than-average business success metrics resulting from the use of CX technologies are spending nearly $2,700 per employee annually on CX technologies, compared to only $1,400 for those showing below-average success metrics.” 

It turns out you really can put a price on customer loyalty – even better, the price is worth it.   

There’s No Arguing with the Numbers

The business benefits have been repeatedly proven, and the companies that have started their CX transformations – including the critical component of a digital transformation – are leading the way in setting themselves up for long-term growth and success. 

On average, it takes around 22 months before a company can see measurable results from a transformation effort, according to Forbes. 

But if your organization hasn’t yet invested in a comprehensive Customer Experience strategy, it’s OK. You can still catch up. You just need to get started. 

Like the old adage says: “The best time to plant a tree was 20 years ago. The second-best time is now.” 

It’s Time to Get Started on Your CX Transformation. 

But how? 

It all starts with developing a specific CX strategy with corresponding prioritized initiatives. Conducting team workshops can help kick start this process to get everyone focused on moving in the same direction. The strategy will lead your next steps.

Establishing a well-considered CX Transformation strategy, to guide a meaningful digital transformation, can benefit your organization in several key ways: 

  1. Providing Focus and Clarity on Your Current State: By analyzing current customer journeys, you can identify areas for improvement and optimization. This approach allows for quicker returns on the lower hanging fruit before delving into entirely new journeys or experiences. 
  2. Prioritizing Impactful Touchpoints: Concentrating efforts on the most significant customer touchpoints can yield higher returns, ensuring your digital transformation resources are invested in efforts you know will make an impact by bringing true value to your customer. 
  3. Fostering a Customer-Centric Culture: Transforming your organization into one that prioritizes the customer experience helps to break down silos, creating a more cohesive workplace and strengthening customer loyalty. 

While a Digital Transformation is an important part of driving fundamental change and redefining how your company operates, top organizations engage in a Customer Experience Transformation to ensure those efforts drive lasting business success. 

Interested in learning more about a customized approach to enhancing your Customer Experience and boosting your bottom line? Reach out to us today.