The Effect of Digital Transformation on Customer Loyalty

July 22, 20208min

As technology has advanced, it has become possible to digitise an increasing number of organisations’ interactions with customers, making the customer journey simpler and more streamlined while also cutting operational costs.

The benefits of such solutions have inevitably prompted organisations to invest heavily in the digitalisation of customer experience strategies over the past couple of decades.

To succeed, however, organisations need to strike an effective balance between digital and human interactions, in order to foster lasting customer loyalty. This is an important consideration, particularly as we come through a global pandemic that has resulted in more interactions taking place online than ever before.

Creating a balanced journey

The key principle behind bridging the digital/physical divide is understanding the moments in the customer journey when a human touch may be more appropriate. Here, we must take two factors into consideration.

First, which approach will minimise the amount of effort required by the customer? For example, routine events in a customer’s journey, such as resetting their password or tracking a delivery, can – and should – be digitised. This makes such processes quick and easy for the customer, while reducing operational input for the organisation. It’s a clear win-win – and a quick and meaningful one at that. Indeed, many of the most customer-centric organisations have identified the link that exists between improving the worst experiences and driving significant bottom-line impact.

For instance, as part of its push for digitalisation, a telco customer decided to focus on ‘low hanging fruit’. Tasks like managing payments and checking usage were moved online. As you might expect, this led to better customer perception metrics. But it also led to a significant reduction in calls into its contact centre, with the high-volume tasks now being fulfilled via self-service instead.

In fact, in this case, digitising the worst experiences led to a 38 percent decrease in callbacks – together with the corresponding saving in man hours, meaning that employees could now be assigned to other tasks.

Humanising the interaction

The second factor to consider concerns those moments in a customer journey where the customer is either seeking advice or experiencing strong emotions. This is where an organisation should think about investing in human interactions and personalising the service. For example, when a customer buys a car online, there should be a human interaction at the close of the transaction, such as at the point of delivery. In this way, the company can show they recognise and appreciate the significant investment the customer has made, while celebrating this special moment with them.

Even more critical, though, is introducing a human element when something goes wrong. At such moments, the customer needs reassurance. Robotic, automated services can have no place here.

In banking, for example, when a customer misplaces their credit card or falls victim to identity theft, they will likely want to talk to a human and be reassured that the company will take on the responsibility of finding a solution. Making customers feel they are being heard can be a determining factor in whether they will stick with you for the long term.

Introducing advanced technology

As the industry continues to move beyond such blunt instruments as traditional satisfaction surveys, customer-centric technologies are stepping up to help humanise digital interactions. Video as a tool has a unique ability to record customers’ thoughts, sentiment and opinions.

Enabling the capture of this authenticity and emotion humanises the process of providing customer feedback in the first place, while also offering a way of amplifying the customer’s voice across the business. Customer Experience leaders can use video as part of wider voice-of-customer (VoC) programmes. It provides a means to convey emotive stories that drive change in their customer operations, while enabling actionable insights to be derived.

Businesses have easy access to video technology, and the expansion in remote collaboration encouraged by the global pandemic has helped ensure that being on camera is now quite normal for many. The crisis has also accelerated the rate at which companies are adopting video across the board. As a result, there has never been a better time to leverage video as an integral part of a customer experience strategy, using it to discover what customers want, and acting on this insight to keep them coming back.

Building omnichannel interactions

The fact that customers are becoming more accustomed to using technology such as video in their everyday lives can be turned to great advantage – but it also needs to be easy for customers to switch between digital and human processes as and when they feel the need. This is especially true if the customer has already tried to use an automated service, such as a chatbot, and failed.

Consequently, organisations should move towards designing omnichannel interactions – balancing the speed and efficiency of new technologies with additional ‘human’ channels – in order to provide customers with the flexibility they need for great customer experience.

It remains true that today, certain customer demographics within an organisation’s customer base may still prefer human interactions. Yet coronavirus has shown us just how quickly organisations and customers can pivot when the need arises. And it goes without saying that the upcoming generations of digital-native customers have very different expectations to those of their forebears. Forward-thinking organisations should be cognisant of tomorrow’s customers, as well as other groups who would be willing and eager to adopt new channels of communication. Investing in omnichannel interactions is a sure-fire way to ensure your company can continue to innovate while continuing to drive customer loyalty.

Interesting links:

Christopher Colley

Christopher Colley

Christopher Colley is Customer Experience VP for the EMEA region at Medallia.

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