According to the latest Zendesk report, 80% of leaders plan to increase their customer service budgets over the next year. And most of the increases will be allocated to digitizing customer experience.
In 2023, a majority of customer interactions are happening through digital channels. Sharing opinions, giving reviews, complaining about products and services, communicating with the customer service team - all of that can be done online. In most cases, that’s the most convenient way of getting in touch with companies.
Read on to see why the digitization of customer experience is so important and how you can make it happen in your business.
Digital Customer Experience: What Do We Mean By The Digitization Of Customer Experience?
Put shortly, digitization is the process of moving offline procedures, solutions, and communication channels to the digital world. On a wider scale, we usually talk about digital transformation - the holistic process of making a traditional, offline organization a digitally-native entity that operates mainly online.
When it comes to customer experience, digitization aims to make all the offline touchpoints fully (or at least partly) digitized, i.e., accessible and usable in the online world. To make this concept more clear, maybe a few examples:
- When a company enables customers to send complaints via email instead of snail mail, that’s digitization.
- When a brick-and-mortar store opens an online store, that’s digitization.
- When customers can communicate with the company via social media and a chatbot and not just over the phone, that’s digitization.
How is it different from customer experience alone?
Customer experience is a broader term that refers to all the experiences customers have when interacting with a given company (e.g., buying its products, talking to its staff, browsing its website, etc.) during the so-called customer journey.
Digitization focuses on just one aspect of CX, namely - where it takes place. The answer is, obviously, online. Digitization has but one purpose - to make offline tools and communication channels online.
Now, there are several trends and technologies shaping the digitization of customer experience. Let’s have a look at them.
The omnichannel model
If you operate in the e-commerce sector, you’ve surely heard this term before. Omnichannel is a holistic approach to interactions between customers/users and companies. In short, it’s all about providing customers with one integrated experience, no matter where or when with which channel they reach out. The omnichannel model is built on two pillars:
- Offering several communication and marketing channels (e.g., a website, social media pages, a mobile app, an online store, and even brick-and-mortar stores)
- Integrating the experiences available in all these channels so that they offer the same quality of service and access to the same products and features.
Imagine a customer named Sue and her favorite retail brand. Sue can go to a nearby shopping mall, and she’ll find this brand’s store. She can also go online and browse the company’s products via its e-commerce website. Both stores offer the same products and the same prices. If there is a special promotion going on, Sue can buy products with the same discount both in the brick-and-mortar store and online. When Sue’s out, she can still stay in touch with her favorite brand, as it recently introduced a cool mobile app that allows her to browse the entire offer and order products.
If she wants to talk to the consultant, she can reach the brand via real-time channels like social media or chat (after hours, there is a chatbot ready to answer common questions or to provide basic information, e.g., order status). If Sue wants to return the product, she can do so via the courier, via parcel lockers, or, if she feels like it, she can go to the brick-and-mortar store and return the product there.
Sounds convenient, doesn’t it? That’s what omnichannel is all about: Accompanying every customer on every step of their journey, no matter what kind of device or form of communication they prefer.
I’ve already mentioned chatbots, but AI is more than that. Today, most major digital tool and platforms use some form of AI. For example:
- Dynamic pricing tools use AI to set optimal prices under specific market conditions
- Social listening tools use AI to analyze brand mentions and give CX leaders actionable insights
- Conversational AI tools use this technology to engage users in more meaningful interactions with chatbots and advanced IVRs for call centers.
- Customer data tools use AI to gather more in-depth insights about each customer and their needs and interests
- Business intelligence tools use AI to forecast demand and help business owners make more informed decisions
The list goes on and on. In fact, it’s difficult to imagine a business area that cannot be enhanced by artificial intelligence - content creation, revenue optimization, warehouse management, marketing automation, data analytics, sales strategies - you name it!
On a day-to-day basis, running a business is all about performing a whole list of activities. Some of them, especially those related to marketing and customer service, can be automated.
- Email marketing
- SMS communication and push notifications
- Gathering customer data and customer feedback
- Onboarding new customers/users
- Managing orders
- Invoicing, and much more!
Let’s go back to Sue. Recently, she decided to open an account in her favorite brand’s online store. She had opened an account, and shortly after, she received a welcome email along with a discount code for her first order. She was also invited to sign up for the newsletter so that she could stay up to date with the company’s offers and discounts.
A few days later, she received a push notification about the latest special offer. She decided to place an order. When she did, the company immediately received her order, and it was sent to the warehouse team. Within a few minutes, both the receipt and the delivery note for the carrier were created and printed, and Sue received an email and a text message with the parcel tracking code.
And the best part? All of that happened with no involvement from the company’s staff. All of that was automated using basic automation. That’s the beauty of this technology. It enables companies to save a lot of time processing orders and communicating with customers. As a result, your team can focus only on the most important problems and issues that need to be resolved.
Digital CX is also about the personalization of customer experiences. And don’t get me wrong; personalization is more than just using the customer’s first name in the email. It’s a marketing-slash-sales technique that is based on gathering all the data about specific customers and using this data to reach them with communication and offers that check all the right boxes. How can it work in real life? Let’s go back to Sue.
She’s been placing orders at her favorite online store for some time now, and the store’s personalization algorithms have been gathering data about her activity. As a result, Sue is now receiving personalized product offers. And she has to admit; she likes many of them! When she’s logged into her account, the website greets her: “Hello, Sue! It’s good to see you again. Have a great day, and enjoy your shopping!” And when it’s her birthday, the website wishes her all the best and gives her a special discount or free delivery.
One time, Sue wanted to ask about her order, but it was late, so instead she went to the company's website and found its chatbot. The chatbot greeted her the way she did not expect:
“Hello, Sue! Do you want to ask about your order no. 12345?”
The chatbot quickly provided her with all the information she needed.
That’s how personalization can work. When it’s done correctly, it can be an amazing tool enabling you to give your user experience (UX) a boost and not just fulfill but even exceed customer expectations.
Why Is The Digitization Of CX Important?
The short answer is because that’s what your customers expect from you. Today, every customer-centric company is also a fully digitized company. What benefits can you expect once you digitize your customer service?
- Increased customer loyalty and retention: Customers are reluctant to leave companies they like. If you provide your customers with everything they need, you will see the customer churn rates go down.
- Increased customer engagement: Automation and personalization are all about encouraging customers to stay in touch with your company, place more orders, and visit the website more frequently. As a result, your business can grow and become more stable as there is a constant inflow of new orders.
- Maintaining competitiveness: Nowadays, the majority of companies have already gone through the digital transformation or are going through it right now. Companies that don’t recognize the right moment to do so will soon be surpassed by more tech-aware competitors. To some extent, you really don’t have a choice; you have to digitize your business if you want to thrive in the market in the long run.
How To Start Digitizing Your CX
Suppose you’re at the very beginning. You’re currently running a small business, and you want to digitize it. Where should you start, and what process should you follow?
Create a digital customer experience strategy
Start with a strategy. What areas of your business should be digitized? What can you do just to get the initiative going? What kind of tools do you need to succeed? I know these are not easy questions. If you feel like this assignment overwhelms you, you have two options:
- You can ask for help. Find a consultant specializing in digitizing businesses; they should be able to help you with the whole process.
- You can DIY it! So much of today's business software is designed to help digitize businesses, either step by step or all at once. For example, if you want to start by digitizing your customer service operations, then any of the vendors on this page would be a great place to start!
By no means don’t even try to digitize everything at once. Start with just one aspect of your business, and once it’s done, move to the next one. Start with something that will help you see a quick result. For instance, if you run a brick-and-mortar store, you can start by launching an online store.
Select the right SaaS tools
Digitization requires tools; you can’t do it on your own. For instance, if you want to open an online store, you need an e-commerce platform to make it possible. If you want to introduce personalization to your business, you need a good CRM tool (as well as a customer data tool) that will gather all the information about specific customers. If you want to start using additional communication channels (like push notifications), you need an online platform that will enable it.
In general, you need to create an IT ecosystem with the tools and technologies necessary to digitize your business. Here, the most important technology is the cloud. Almost all digital strategies and solutions are based on cloud computing. Modern cloud-based tools are sold with the Software as a Service, or SaaS, model.
Put shortly, with the cloud, you don’t have to download software and install it on your computer. It’s all available online in the cloud. A good example is Google Drive. It’s a complex ecosystem of tools you can use for email (Gmail), advertising (Google Ads), creating documents (Google Docs), and more. You don’t have to install Google’s tools on your computer; you access them via an internet browser. All the other SaaS tools work the same way.
The biggest advantage of such a solution is that you can access these tools 24/7 from any place on Earth (provided you have an internet connection).
Adjust everything you do to your target audience
Digitization is not a goal in itself. You should tailor everything you do to your target audience and its expectations and needs. If you don’t know much about your customers, you need to start gathering data about their activity (in your online store, on your website, on your social media profiles, etc.).
Next, you should create a customer persona (that will reflect your company’s average customer) and a customer journey map. This way, it will be easier to make sure the new technologies and initiatives you introduce will satisfy your customers. The rule of thumb is this - concentrate on making your customers’ lives easier; solve their pain points and give them access to convenient online tools that will help them make the most of your digital touchpoints.
These three steps are fundamental to the success of your future digitization strategy. Once you complete these steps, you can focus on further elements and steps.
Take Your Digitization To The Next Level
- Continue tracking your customers’ behavior: Use analytics and tracking tools to monitor how customers interact with your website, social media profiles, and web/mobile apps. This knowledge will help you introduce more advanced customer support solutions in the future.
- Actively collect feedback: You can use online customer surveys to find out what people think about interacting with your company. My colleague discussed this question in his article: 6 Clever Ways To Get Customer Feedback.
- Offer self-service support: Here, solutions such as chatbots and customer portals are extremely useful. Enable customers to solve at least some of their problems on their own. It’s a clear win-win situation - they don’t have to wait in line to deal with their issues, and you can save a lot of time.
- Never start exploring new tools and technologies: The digital world is always on the move. You have to keep looking for new technologies and solutions and never stop improving your business. Only this way will you be able to stay competitive and relevant to your customers regardless of market conditions.
How To Measure Success
The shortest answer is with customer satisfaction. That’s the main purpose of digital transformation, isn’t it? There are several metrics you can track, including:
- Customer churn index
- Customer Effort Score (CES)
- Net Promoter Score (NPS)
- Customer Satisfaction Score (CSAT)
And several others. Measuring customer satisfaction as well as gathering feedback from them will give you a complete view of your efforts and the direction in which your company is going. My colleague discussed this question thoroughly in his recent article: Customer Satisfaction Metrics: Key Terms & Examples.
Conclusion: Digitize your CX
In this article, I’ve barely scratched the surface of the importance of digital CX. If you want to know more, explore our website. We have tons of practical articles on how to digitize your company, what tools to use, what to focus on, and how to organize the process.
If you want to stay up to date with what’s going on in the CX world, I encourage you to sign up for our newsletter. Inside, you will find our latest articles and practical tips that will help you manage your company in a more efficient way. All we need is your name and your email!