Has your business taken digital transformation too far?
The notion of digital transformation has elevated from buzzword to business imperative since the pandemic. In 2022, the need to accelerate digital transformation and build greater agility into the business remains top of the agenda: according to the latest Workbooks CRM survey, it is still the number one challenge facing SME businesses.
One way to gain speed and cut costs is to automate time-consuming processes and tasks – but is there a scenario in which digital transformation can be taken too far? How do businesses achieve digital transformation and still build meaningful relationships with prospects and customers?
In a time of increasingly sophisticated AI-enabled bots and sales automation platforms, it is vital to ensure digital transformation enables rather than replaces customer relationships, insists John Cheney, CEO, Workbooks.
With every technology vendor promising digital transformation, it is easy to get confused and lose perspective. There is a significant difference between digitalization – the use of digital technologies to improve business processes – and a digital transformation strategy that explores technology to achieve fundamental change. Yet, as widespread concerns from both customers and staff attest, far too many companies are synonymizing the two.
Service complaints are at an all-time high, not only as a result of the staffing crisis affecting all businesses but also due to misplaced focus on digital transformation to achieve cost savings. Pushing customers online or asking them to interact with chatbots or online text may work for the company, but the quality of the customer experience is often woeful. The result is a deluge of telephone calls that cannot be handled by a reduced customer services team. Is it any surprise that such strategies are adding cost, with UK firms spending a total of £9.24bn every month in worker hours covering complaints handling? A short-term plan to cut costs through efficiency could lead to a long-term reduction in revenue and profitability.
In a bid to reduce costs and cut the size of the customer services department, companies have digitalized one-off processes and failed to consider the impact on the customer – or the customer relationship.
Examples of ill-considered digital transformation projects creating significant business problems are everywhere. The insurance company that encourages its customers to make a claim via a portal, yet insists the customer has to call the customer services team – with the usual delays and frustrations – to receive confirmation the claim has been paid. The push toward chatbots is ubiquitous but, if they cannot resolve the problem, customers are then compelled to go through the entire process again, queuing for customer services and repeating every piece of information already provided to the chatbot. Businesses are focused on saving their time, but what about the customer’s time?
If cost saving cannot be achieved without damaging the customer experience and hence their perception of, and loyalty to, the brand, what is the value of the digital transformation strategy? If a cost-saving exercise ends up in a significant spike in customer churn and a drop in brand status, how much additional investment will be required to build back that customer base and create a better brand value?
The issues are not only in customer service. Giving sales teams automated tools and telling them to interact with prospects primarily online can also backfire. While both consumer and business purchasing decisions are made more online these days, vanilla sales emails are not the best way to engage prospects, however efficient the process may appear. Technology that digitalizes one part of the sales process may promise efficiency but is it really delivering the experience a business wants to offer? Or is it actually placing a barrier between the sales team and the customer?
To address the current disconnect between customer needs and business focus on cost reduction, companies must evolve digital transformation projects from simply using technology to digitalize existing processes. Irrespective of the power or functionality of that tool, if those processes already lack effectiveness, making them faster or more efficient is not going to deliver any business value. In contrast, ineffective processes require time and resources to manage the inevitable failures, adding costs that often exceed the available resources.
Companies need to take a step back. What is the true business goal of digital transformation? Is it winning new business? Reducing churn? Or just cutting costs? Also, what experience do customers and prospects expect? More than three quarters of B2B buyers and sellers say they now prefer digital self-serve and remote human engagement over face-to-face interactions, according to McKinsey, so what does this mean for business relationships? While slick, automated processes that deliver an optimal self-service experience are excellent, it is also vital that the business can be immediately alerted when a customer needs a direct, personal interaction to take the next step in the process.
Talking directly to customers is key. From surveys at the end of an interaction to focus groups, gaining constructive feedback will mitigate the risk of taking the wrong approach to digital transformation. Businesses that remain close to clients and achieve rapid insight into the impact of any automation on their quality of experience can also ensure change truly reflects the needs of both the business and its customers.
And that will not always mean using the most innovative technology. For example, having spoken to its customers, one company has moved away from expecting customers to log into a portal to access information about order updates – a process customers found onerous and time-consuming – opting instead to email order status updates. Simpler technology perhaps, but an approach that takes the pressure off customers and ensures they can be confident that any status change will be updated. The portal worked for the business, an email works for the customer.
Digital technologies are hugely powerful – when used correctly. True, effective digital transformation is not only about digitalizing processes, it is about getting closer to the customer – not putting additional barriers in place. It is about understanding the tools and technologies that are available and how they can be used to support a better business process, not just replicate the current one. Intelligent CRM technologies can transform sales effectiveness if used to automate a sales process tailored to the specific needs of the customer and prospect. Chatbots are a great addition to the customer service experience, as long as they are used correctly and can meet the needs of the customers they are working with – with rapid escalation to a person if that is what is required.
If companies are to de-risk digital transformation and ensure they are adding value rather than creating problems, the process has to be customer-led.