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Digital Maturity Explained: Customers, Reconnected.


If we must identify the most important reason for digital transformation, it would be the customer. The internet and the smartphone have empowered the end-user like
never before. Having a shop on “main street” was a very important strength before the internet. Today, the “main street shop” equivalent is in the palm of the consumer’s hand, and there is no main street or high street anymore. Your competitor is just one click away.  

Therefore, most digital transformation programs focus on customers, customer experience, and customer analytics. The better you know your customer, the better you are likely to serve her. The right product at the right time, in the right place with the right promotion or the right price, is now just a matter of algorithms calculated in microseconds. This is true for the internet giants in the West and in the East. Is your company capable of doing the same? 

As one can see, focusing on the customer is truly essential. Therefore, we have put the customer dimension at the very top of our digital maturity index. The more you digitalise customer relations, transactions, interactions, and the usage of products and services, the better you can analyse and understand who the customer is. You can even predict what she is going to do next and see why she is doing what she is doing. 

To achieve “customer excellence” an organization must succeed across many components. We have structured them in four main groups: The foundation, the offerings, the experience, and analytics. All these components are equally important. They are all tightly integrated and must improve and mature simultaneously.  

The foundation consists of several strategic capabilities. The direction of the “customer excellence program”, meaningful leadership in place, thorough organization with the necessary skills available, and establishing a customer-centric culture in the organisation create an unshakeable base.  

The offerings are everything you offer to your customers, products, services, promotions, business models, and value propositions. Digital transformation means to be able to digitally connect these offerings with the customer to make meaningful interactions possible. This generates tons of data, which again help to improve product and service quality, and eventually will improve overall customer value.  

The experience is what the customer lives through while consuming your services or products and using your channels or engaging with your brand in general. This can be very emotional, sometimes delightful. It can also be frustrating, not only depending on your performance but also relating to the perceived quality, timeliness, and value on the consumer end. It is not always easy to satisfy a customer in a difficult situation.  

Analytics is probably the most important dimension in terms of knowing your customer and improving the overall value on both ends. The offerings and experiences will become more relevant to the customer. The value gained by the company will grow over time in revenue, loyalty, and lifetime value, which are all measurable and improvable within specific areas of analytical application.  

On 17th September 2020, we discussed the customer dimension of our Digital Maturity Index with Mark Walker-Smith, Head of EMEA at Digitopia, Oliver Sheerin, Customer Intelligence Advisor at SAS, and Halil Aksu, Managing Partner at Digitopia.  

The importance of continuous measurement was an important outcome. We listened to very exciting examples from SAS on how they have helped their clients to excel in customer analytics and have gained true value out of it.  

Digitopia provided strong evidence concerning digital maturity, the impact of digital transformation journeys, and how companies competing on all fronts can get the customer’s attention. During the webinar, Amazon’s strengths were discussed, and the new business model of subscriptions was elaborated on, with a very recent announcement from Pret-a-Manger’s new offering: a flat fee per month for unlimited beverages. It will be very interesting to watch how those businesses will evolve.  

Click here to view the webinar.

 

 

Our digital maturity index measures on a scale from 1.0 to 5.0. The first maturity level represents very basic customer interactions, so we have labeled it “working”. Going up to the highest level, which we have labeled “fascinating”, describes a state-of-the-art overall customer experience enabled, augmented, and enriched with digital capabilities.  

The studies we have done in the recent past show that the “customer” dimension is not among the strongest areas of many companies. The overall average of digital maturity was measured at 2.7 and the customer dimension average scored at 2.6. There is a lot of room for improvement. We will absolutely see huge investments in this area in the upcoming times.  

During our work with clients, we have also found out that improving digital maturity within the customer dimension is particularly difficult. It requires a holistic approach, strong leadership, and synchronized initiatives ranging from design to processes, from applications to culture, and from analytics to quality. Of course, all initiatives are rendered worthless if the processes, the culture, the channels, and the products and services are not executed correctly in daily life.  

Brief descriptions of each level can be found in the graphic below: 

 

 

To give you a glimpse into a “fascinating” digital maturity level of the customer dimension, please review the illustration below. It is a brief list of some capabilities an advanced organisation must have to become a “love mark”.  

One of the most customer-centric organisations on the planet is Amazon. At least, that’s their claim. Amazon still has a corporate culture even with customer experience as the most prioritized strategy. In their offices in every meeting, one chair is left empty, representing the voice of the customer.  

Imagine Amazon Prime, the world-leading subscription service, having more than 150 million subscribers as of 2020. Imagine an Amazon recommendations engine, generating more than a third of their e-commerce revenues.  

As if that is not enough, Amazon has also put an echo device in our homes, so we can talk to Amazon all the time and order stuff around the clock. Millions of households are now close friends with Alexa. She is considered a family member. Can you get closer to your customer than this? 

Based on all our experiences and best practices we have examined, we described the most advanced customer experience, the most fascinating digital maturity in the customer dimension, one can imagine, as of today.  

What stands out is the amount, quality, and usage of data and turning it into intelligence and insight. The better you know your customer, the better you can serve them. That’s beneficial for the customer and in most cases, it is also very lucrative for the organization. Pricing, campaigns, cost of marketing, service quality, personalized offers, and/or experiences, are much better processed and executed on digital channels with rich data sets.  

Currently, we use web sites and mobile apps as the go-to channels. But slowly, smartwatches, voice assistants, other kinds of smart devices are picking up and becoming mainstream. There will be other channels by which customers may want to reach you. It’s not just about the number of channels available, it is the overall experience; the integration, the look and feel of those channels, and how they contribute value to the user and to the organization.  

Imagine a regular store selling a music CD, compared to Spotify, providing you with all the world’s music at your fingertips. Guess which one collects more information? Guess which one knows the customer better? Guess which one can turn that knowledge into real loyalty and real revenue? Yes, the answer is obvious. So, there is no other way of moving forward than by collecting as much information as possible about the customer and turning it into value for all participants. That’s the essence of digital maturity, and that’s the most crucial success factor for your digital transformation.

 


This article is a part of our monthly Digitopia Digest: 
Digitopia Digest is a monthly newsletter showcasing the latest news in digital transformation. If you are determined to discover what to do next in your organization to achieve digital success or are simply interested in digital technology and innovation, please subscribe for updates.

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