The Digital Customer Experience Blog

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Three Insights From The State of Digital Transformation 2018 – 2019

state of digital transformation

A few weeks ago Altimeter has released its annual report “The State of Digital Transformation”, investigating the evolution of digital innovation in the enterprise ecosystem. Technologies reinvent and reshape markets and business behaviors, and it is crucial to monitor the key trends and insights that can guide you across the modern digital transformation.

This year, the results show an overall maturation: companies are modernizing and working together through this essential and unavoidable transformation. Even more, companies seem to comprehend the importance of expanding and reorganizing their business in a way that responds and corresponds to customers’ expectations and market competitiveness.

However, they still have to cope with a few resistances and missteps, as you could expect. Incorporating such a significant transformation into the organizational culture and people mindset requires efforts that are not-trivial, in terms of investments and guidance.

Looking at the report, we have gained three crucial insights, that describe the state of digital transformation in business.

The Customer Experience is still high-priority

This is the era of customer-centricity, a time when people’s preferences and concerns are much more critical than any other assumption. It is a time of tweets and social sharing, of personalization and co-creation. A time of humans and emotions. Ultimately, a time when empathy and technology must work together.

Over the last few years, customer experience has become the top priority for companies. Fixing and regulating it to meet customer’s needs and expectations is a long-term work that requires a combination of efforts and investments.

In 2018, companies continued to focus on customers, connecting all the touchpoints and empowering an infrastructure tailored to their preferences: 57% of companies report it as their top priority in the long-term roadmap (the next five to ten years) and 54% in the short-term (the next three years). This confirms that the customer perspective will still be a key element when deciding where and when to allocate budgets.

How does this willingness translate into action? Most companies are doing so by investigating customer journeys (59%). This adds to the perception of an increasing level of maturity among businesses, that seem to leverage on the customer understanding when designing the digital transformation roadmap. Only a small part of organizations (7%) hasn’t even studied the new customer journey, revealing a significant gap between mature businesses and the green ones.

Meanwhile, companies are also prioritizing - 49% in the long term and 45% in the short term - the empowerment of an efficient IT infrastructure, to go with and support the CX innovation. This confirms the idea that the customer experience is an omnichannel, general concept, that can’t be detached from the presence of an agile and flexible architecture of technologies, to deliver the exact offering and innovate more efficiently.

Increasing budgets and decreasing controls

When it comes to disruptive technologies, the budget is essential. There can’t be any transformation without investments, and the budgets must evolve in line with the technology upgrades and cross-functional initiatives required.

This year, the percentage of companies that report larger investments has incremented significantly: budgets between $15 and $30 millions boosted 210%, and budgets more or equal to $50 millions presented a dramatic raise of 640%. Even though the latter includes only a few companies (11%), it is a clue of an enterprise-wide movement.

Yet, there is a big concern about whether or not these budgets are relevant to gain an effective transformation. A significant percentage of companies seems to be using the budget without the guidance of a specific roadmap or a clear understanding of customers’ real needs and behavior.

The hardest challenge is the lack of data or a measurable ROI to understand the impact of the digital innovation. If change agents can’t easily show the real value of digital transformation and justify the investments with visible data and results, consequently they struggle to get the material resources they need to thrive.

The perception of digital transformation is, in fact, mostly as a cost center, rather than an investment in growth and performances. This is an example of the difficulties that digital transformers have to handle every day, an expression of the resistance to change that still survives.

Promoting a culture of innovation

One of the most encouraging data is that almost half of the companies have invested in building a culture of innovation, as mandated from the executive level (mostly through an in-house innovation team/lab with dedicated enterprise resources).

On the other side, 48% of companies reported that creating a culture of empowerment and innovation is one of their top priority in digitally transforming the employee experience. Since the digital transformation is an enterprise-wide change, it is essential that this mindset is shared and promoted across all the organization.

It is also promising that this effort is advocated by executives who possess a broad organizational purview. For the second year in a row, CTO/CIOs are reported as formal owners or sponsors of transformation initiatives, followed by CEOs and boards.

These few insights are just a small part of the relevant data and aspects that can be found in “The State of Digital Transformation” by Altimeter.

 

Photo by Joshua Sortino on Unsplash

 

Discover how you can innovate your business strategy to deliver personalized experiences and turn prospects into loyal customers. Download the free report Digital Innovation in Retail & Fashion.

Is Customer Personality the Future of 1-to-1 Marketing?

The new marketing is people-centric, and today companies need to gain a deeper understanding of ‘who’ their customers are, as people, not simply consumers.

However, even when they get to know their customers, companies still rely primarily upon what we can call "hard" data: socio-demographic, economic, and geographic data - sometimes they add behavioral data, such as past purchases and content views.

With a metaphor, we can say that if companies were humans, they would be people who use only the “left side” of their brain, the rational part. But what makes humans so able to understand and communicate with other people is the completion of that rational part with the emotional one: the “right side” of the brain.

Now, if we imagine what this right side of the brain is made of in the digital world, we can say that it is made of "soft" data: the desires, motivations, emotions, and personality of customers.

These human-like data have become essential today. To understand why, let’s see an example from a well-known marketing strategy that relies on a psychological principle: social proof, a technique that leverages our tendency to follow the majority, to look at other people’s actions and behave consistently with them.

In marketing, we want people to imitate desired behaviors, those that will lead to a sale or a conversion. So, we use the social proof principle every time we inform potential shoppers of what other customers do (for example, what they have bought) to convince them to do the same.

We often find this principle applied in the e-commerce world. Think of Amazon and its suggestions tool. Amazon makes extensive use of social proof: "people like you also bought this item"; "frequently bought together"; "customers who bought this item also bought" and so on.

Knowing what other people buy can be important to help us - as customers - to make good purchase decisions. But if you're a marketer, you should ask: is it really so important to all of us? Do we decide and behave in the same way?

An example. Think about a person like Hester.

1-to-1 marketing

Hester is a girl that wants to feel unique - in psychology, they say she has a personality trait called "need for uniqueness". She is creative, original, and a bit eccentric. She wants to feel special with everything she buys and wears; when shopping, she looks for different styles and innovative outfits. If Hester buys a dress and then sees it worn by someone else, on the street or at a party, she gets annoyed.

Now, think about the Amazon-like message "people like you also bought". Do you think that a person like Hester would feel engaged? Or is it more likely that she would get annoyed by the expression "people like you"?

That is the point. Today, 1-to-1 marketing is growing faster and faster. Market leaders such as Amazon, Youtube, Netflix, Spotify are dominating thanks to their ability to accumulate lots of customer data and use them intelligently.

At the same time, we have psychological principles - such as social proof, and many others - that are widely used in marketing but still applied in the same way to all customers.

In this scenario, what about individual differences?

We’re not talking about age, gender, geography, or past purchases. We’re talking about those characteristics that we, as human beings, can see in others and take into account when we interact with them. We’re talking about psychology and personality.

We have seen Hester, with a high need for uniqueness. Now let’s see Emma.

personalized-marketing

Emma wants to “fit in” the group - she has a personality trait called "need to belong". She likes to follow trends and, when shopping, wants to feel fashion. She is the typical girl who, when deciding the outfit, needs to see it already worn by friends and influencers on social media.

Maybe, compared to Hester, she would be much more interested in what other people (“people like her”) bought, much more attracted by messages that leverage social proof.

That’s why customer personality matters.

A good salesman who knows his customer's personality has a huge advantage: he not only knows what to suggest to his customer but even how to paint it. A good seller in the store would certainly communicate differently with Hester and Emma. So, why communication online should be the same for them?

Imagine the experience that Hester and Emma could live on the e-commerce site of a fashion brand when looking for a new dress and some accessories to match.

To be more empathic, that brand could highlight for Hester the most niche and exclusive clothes, that she could be the first to discover, with more powerful storytelling for her, such as: "Discover how to create your unique and innovative outfit for the summer".
With Emma, instead, it would be better to suggest the most popular and fashionable clothes, preferred by the community of other customers, with a more effective message for her, such as: "Discover how to create the most trendy outfit for the summer”.

What is obvious for a good seller still seems impossible for e-commerce. Tailoring the message to reflect a person's attitudes, motivations and personality is a natural process in "offline" marketing, and technology is rapidly evolving to bridge this gap, enabling companies to be more “empathic” with their customers.

There are lots of things that technology can do better than humans, especially those that follow the same general workflow: gather data, analyze data, determine a course of action, implement the course of action. Communication, however, doesn't fall into that standardized process for its intrinsic nature of being more powerful if differentiated, flexible, and tailored to the specific characteristics of the receiver.

That's why skills like persuasion, social understanding, and empathy are going to become our "competitive advantage" as artificial intelligence takes over other standardized tasks. But this also means that technology will always go further in the direction of learning, or trying to learn, the way humans communicate. Digital communication today is more efficient, of course, for the number of people it can reach simultaneously, but human communication is still more effective. Whether or not it will always be, that is an open issue, which is up to each of us to answer!

 

Photos by Tyler LastovichMarco Xu and A L L E F . V I N I C I U S Δ  on Unsplash

 

Discover how you can innovate your business strategy to deliver personalized experiences and turn prospects into loyal customers. Download the free report Digital Innovation in Retail & Fashion.

How the DCX Can Improve Customer Lifetime Value

customer lifetime value

Today, customer retention is gaining attention in business. The importance of customer satisfaction, loyalty, and repurchasing behavior is becoming central. The focus has shifted from customer acquisition to customer retention marketing, due to the recognition of its primary relevance.

It is a matter of fact that acquiring new customers is important, but not at the expenses of the ones that already exist. There are plenty of statistics about the massive impact that customer retention can have on business value. Nurturing the relationship with customers, in order to gain their loyalty and advocacy, and watch them coming back over and over, is the main purpose every Brand should pursue.

Therefore, even among those silos that are focused on numbers and sales, the concern shifted to the value of retention. Despite the fact that acquisitions have always held more weight, and metrics were chosen to examine the revenue of new purchases, today there is a better way to measure business success: customer lifetime value.

 

WHAT IS CLV AND WHY IS SO IMPORTANT

In order to get a better understanding of the value of customers, rather than using metrics such as Return On Investment (ROI), companies should choose Customer Lifetime Value (CLV).
ROI measures the gain and loss generated on an investment, within a specific period of time; otherwise, CLV measures the revenue brought by one customer throughout the course of all the interactions with the company.

The main fault of ROI is that it gives a short-sighted business perspective: the concept of “return” requires to set the time by which you want to measure the net profit of your investment. On the contrary, CLV measures the entire value of a lifetime relationship between brand and customer, shifting to a long-term perspective.

Furthermore, Return On Investment considers only the amount of profit gained, regardless of the meaning of specific, different interactions. Repurchasing behavior, positive word of mouth or any action of searching, posting or talking about brands value as much as the return of selling products, or even more.

Switching from an acquisition- to a retention-oriented business strategy requires a different mindset: rather than giving value to consumers based on the amount of their first transaction, brands should measure the cumulative profit provided by customers during the entire duration of their relationship with the company.

 

HOW CX CAN IMPROVE CLV

How can companies accomplish the purpose of cultivating long-lasting relationships, in order to increase Customer Lifetime Value? Focusing on customer experience.
First of all, companies should consider the overall journey of customers. Looking at the bigger picture they can identify the weaknesses and work across functional areas to replace the causes of dissatisfaction and discomfort.

Moreover, concentrating on the relationship, rather than on single interactions, they can cultivate emotional bonds, based on trust, dependability, and reliability. That is the basic requirement of relationship marketing: providing relevant experiences that delight, satisfy, and engage every person, connecting/resonating with their inner meanings.

The first step to the extent of building a strong reputation of the company is to work on the customer touchpoints. The growing area of conversational support, provided by chatbots and messaging tools is opening to new patterns. Due to advances in Artificial Intelligence, machine learning and natural language technologies, Brands can engage customers with personalized and helpful communication.

This kind of “conversational commerce” is growing up quickly, as long as it provides a continuum thread between companies and people, offering the chance to add value to every part of the customer journey. People can search for information, receive support, get personalized recommendations, chat with the company representative, read reviews and click to purchase, without even leaving the messaging app.

Among all the benefits provided by AI, personalization is the feature that best helps companies improve the customer experience. AI technologies let brands easier target specific market segments and provide personalization at scale, using the data gathered by behavior-based algorithms and predictive analytics.

Delivering the best customer experience throughout all the touchpoints allows customers to achieve the highest levels of satisfaction and loyalty - the starting point to create a solid bond between brands and people.

Just as much as customers have started to choose value over price, companies should consider enhancing the worth of the relationships they establish with people: Customer Lifetime Value can be helpful to gain a deeper understanding of this parameter.

Photo by TNK PHOTO on Unsplash

Three Emerging Aspects From the Brand Relevance Index 2018

nik-shuliahin-423834-unsplash

Think about the brands that make a difference in your everyday life. The ones that make your life easier, better. Offering you exactly what you need, at the exact moment that you need it.

These brands have the power to influence your decisions, inspiring you day by day. These are the companies that Prophet calls “relentlessly relevant”.

In this article we give an overview about U.S. market, with the purpose to find some relevant aspects that can help marketers understand what people value the most. This perspective gives brands a different approach in order to unlock growth.

THE BRAND RELEVANCE INDEX

The Brand Relevance Index was launched four years ago and is performed country by country, with the aim to distinguish the differences that exist within people and markets from various part of the world.

The crucial point of this ranking is that it is made by surveying more than 40.000 people to list hundreds of brands on many aspects and attributes. According to Scott Davis, “customers are the real only experts” and the choice to start from their perspective to investigate the brand relevance is determinant.

The BRI is based on 4 principles:

  • The inclination to think, make investments and create with a customer-oriented vision;
  • The capacity to meet customers needs, offering products where and when they require them;
  • The ability to provide emotional experiences and ideas that inspire customers day by day;
  • The inclination to continuously reinventing themselves, finding new and creative ways to anticipate unexpressed needs and desires.

The results are mostly congruent to the expectations: tech giants are still dominating the top of the list and, besides few big movers and some surprising entrances, the most famous brands are meeting the expectations.

While a third of the top 21 brands is owned by three companies - Google, Disney, and Sony - none of them stands in the top 5. Instead, Apple is still the most relevant brand, for the fourth year in a row, while KitchenAid and Nike moved into the top 10, replacing Disney and Pixar.

Prophet presents four key findings, common to all top brands: all the companies on the top of the list are constantly reinventing themselves, in order to build a specific, strong community around them. Furthermore, they still are focused on customers and their needs and desires, while trying to inspire them and chasing a higher purpose.

GIANTS AND NEWCOMERS

Tech giants are on the top of the list: 8 of the top 10 are inherently digital and experiential, most born in the last 20 years. How can traditional, brick and mortar companies keep up with the wave of newcomers?

Looking at KitchenAid, a company started in 1919 that has just moved into the top ten, it shows the way to winning customers’ mind and heart: reinventing and renewing is the key to stick out of the ordinary and to emerge from the obsolescence.

Top brands have the commitment to stand ahead customers’ needs and to surprise them, continually reshaping experiences and expectations, in order to offer ever-greater involvement.It’s not just a prerogative of the newcomers.

Older brands, such as Dyson, Chevrolet or Ford, have recently broken into the top 50, confirming that there still is a room for historical brands, if they can keep the pace, transforming themselves while remaining true to their roots and consistent with the brand heritage.

Furthermore, the youngest customer base has a preference for these companies too. While these customers have always been known for being social media obsessed, this stereotype is no longer true - it has never been, probably. In fact, besides all the posting, tweeting and snapping, social media brands aren’t the most relevant to their lives.

On the top of their list there is Netflix, confirmed as the best entertaining media. Due to its ability to offer suggestions tailored to individual preferences, and to increase the content base with new, peculiar projects, it keeps reaching the highest “make me happy” score. Definitely one of the best recently born brands.

SOCIAL MEDIA PLATFORMS

It’s evident that among millennials, all the social media platforms are losing ground; especially Facebook, the biggest mover of the year (-102 positions). However, this drop is seen in every age and gender demographic as well, confirming that this decline is not ascribed to the youngest base.

The decreased usage of Facebook is imputable to the lack of trust and interest. The “fake news” attribution, and the numerous big data breaches have brought down the brand reputation, making people doubt about its value.

Partly, this drop may represent a natural shifting to other parts of the social ecosystem, as people are always looking for the best place to express themselves. Instagram is still running the photo-framed social interactions, WhatsApp is the most used messaging system, and YouTube is the natural place for video sharing.

Nevertheless, all these social media platforms don’t seem to be considered as “relevant” to people: no one of them is ranking on the top 50, except for Pinterest.

INSPIRATIONAL BRANDS

Among social media, only Pinterest is winning customers attention, ranking third in the overall list, and first among “makes me feel inspired”.

Delivering great experiences and promoting relevant ideas, is one of the most important aspects of relevance, that results in the opportunity for brands to create a deeper connection with their customers. People want brands to express a unique model of thought, that is consistent with the brand image, and which customers can relate to or get inspiration from.

Likewise, Android is perceived as “The People’s Platform”, making its openness and ease to use a major of the brand characteristics. Its usage is worldwide - actually 86% of mobile devices - and people have the perception that it is accessible and futuristic, and gives them the power to contribute to its development.

Both these aspects - letting people get inspiration from each other and from the brand, along with showing a purpose to chase - result in the opportunity to build a strong community that shares a common view and meets common values.

The few takeaways presented in this article are just a small part of the relevant aspects that can be observed looking at the report by Prophet. The starting point to study the relationship between brands and customers, that it is the most important element when shaping brand personality in order to become relevant, meaningful and essential to customers’ lives.

Photo by Nik Shuliahin on Unsplash

Download our brand new report, Digital Innovation in Retail & Fashion, and discover why you must know and understand your customers before even thinking about selling, and how you can use personalization to deliver relevant experiences that drive loyalty and increase value.

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The Top 10 Strategic Technology Trends For 2019

Gartner has just released its insight for the ten key trends you can’t afford to ignore in the next year. These Gartner Top 10 Strategic Technology trends are expected to impact and transform industries through 2023.

The core concepts presented are all about shift and change and disruption, as technology is becoming an inextricable part of our world.

Three themes dominated the speech:

  • Intelligence. Increasingly the engine that drives future capabilities. An intelligence-ai driven future;
  • second is digital, in an increasingly blended fashion;
  • then mesh, as the importance of ecosystems.

In 2019 we will look at these three things coming together in an increasingly integrated fashion.

1: Autonomous things
Whether it’s cars, robots or agriculture, autonomous things use AI to perform tasks traditionally done by humans. By 2021 10% of new vehicles will have autonomous driving capabilities.

2: Augmented analytics
Data scientists have increasing amounts of data to prepare and analyze. Organizations can miss key insights from hypotheses the data scientists can't explore. That’s why “By 2020, more than 40% of data science tasks will be automated.”

3: AI-driven development
Developers will embed AI into applications and use AI to create AI-powered tools for the development process.

4: Digital twins
A digital twin is a digital representation that mirrors a real-life object, process, or system. The focus today is on digital twins in the IoT, which can improve enterprise decision making by providing information on maintenance and reliability, Expect this to grow in 2019.

5: Empowered edge
Expect information processing and content collection and delivery placed closer to the sources of the information, with the idea that keeping traffic local will reduce latency. “Technology and thinking will shift to a point where the experience will connect people with hundreds of edge devices.”

6: Immersive technologies
Conversational platforms, which change how users interact with the world, and technologies such as augmented reality (AR), mixed reality (MR) and virtual reality (VR), which change how users perceive the world, will lead to new immersive experiences.

7: Blockchain
The blockchain is a type of distributed ledger, an expanding chronologically ordered list of signed, permanent transactional records shared by all participants in a network. Expect blockchain to take off in many industries in 2019.

8: Smart Spaces
Connected to the digital twins concept, a smart space is a physical or digital environment in which humans and technology-enabled systems interact forming an open, connected, coordinated and intelligent ecosystem.

9: Digital ethics and privacy
Customers will have a growing awareness of the value of their personal information and will be increasingly concerned with how it’s being used

10: Quantum computing
Still not ready for prime time, quantum computing will evolve, as an exponentially scalable and highly parallel computing model.

Last but not least, seven digital disruptions you might not see coming in 2019, as they are infused in your day-to-day experience,
and their expected impact:

1

Gartner Symposium – Strategic Predictions For 2019 and Beyond

The future is filled with disruption. But pending disruptions are taking on new forms. This is the tipping point for Gartner's keynote about top strategic predictions for 2019 and beyond, live from Barcelona.

In essence, here is a selection for you of the most relevant insights from Gartner Symposium/ITxpo.

  • AI evolves into augmented intelligence and is affecting human lives as the presence of technical skills is slowly increasing within organizations.
  • People-oriented cultures resist the dehumanization of the individual, and as a result, culture and privacy become more and more connected.
  • Processes become products, and markets consolidate as customers continue to adopt new technologies.
  • As a result, all organizations have explore AI steadily, and both develop and supplement AI skills with AI automation technologies provided by expert vendors in the different fields (i.e. digital customer experience.
  • Acting more and more with a systemic vision, organization have to learn how to introduce products based on internal processes and data by leveraging the cloud and ecosystems of digital giants.

The Digital Customer Experience Blog

This site, published by Neosperience, overviews the advancements of digital customer experience in marketing, technology and society. Neosperience Cloud is the technology platform to create engaging experiences for your customers that drive ongoing loyalty to your brand, and faster paths to purchase. It is the choice of the best companies in the world, Winner of the most prestigious global awards across many industries: Automotive, Communications, Media and Services, Consumer Products, Retail and Distribution, Fashion, Luxury and Beauty, Financial Services, Healthcare, Utilities, Government and Infrastructure, Travel and Transportation.

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