In a related article, “Business Digitalization in a Digital Divide,” we talked about how businesses, today, are facing at least three major challenges in the run-up towards digital transformation: the digital divide, generation gap, and prosperity polarization. As businesses move towards digital transformation, we see a lot of adoption of new technologies and the adoption of a lot of the latest tech trends. However, all these could be just shiny objects adorning the business or the brand. One must remember that all these upgrades, shifts, and tech adoptions have for their purpose the improvement of the commitment to deliver customer satisfaction rooted in always being attentive to the times. One adopts the latest in technology deemed applicable to the business and appropriate to delivering great customer satisfaction in order to provide a customer experience worth advocating, as it is attuned to the market’s evolving landscape, thus increasing customer value.
The challenges in today’s market
First, the digital divide, from the Digital Divide Council’s definition, “is the gap between individuals who have access to modern information and communication technology and those who lack access.” According to them, “there are three key stages that influence digital inequality worldwide.”
– Digital inequality
There is digital inequality evident between communities living in urban areas and those living in rural settlements. Men in low-income countries, for example, either because of work or their low income just limits them to have just one, are 90% more likely to own a mobile phone and, thus, have access to mobile connectivity. This reality influences what we can perceive as a gender divide in the shift to digital.
– Generation gap
Also, the challenge of the digital divide’s generation gap throws to us the coexistence and confusion of at least five generations developed from different sociocultural environments now living together. There is the aging economic powerhouse that is the Baby Boomers, the forgotten middle child Gen X, the Gen-“Why?” Generation Y, the first digital natives known as the Gen Z, and the more tech-savvy (also observed as more inclusive and social) children of the Millennials now referred to as Gen Alpha.
– Economic polarization
Across all these, economically, there is also－still－an imbalance and inequality in wealth distribution: a polarization of the growing luxury market for the upper class and an expanding mass market at the bottom. Aside from the gap between income levels and related economic effects, there is also the gap and related geographical restrictions between the more economically developed countries having access to a wide variety of technology and the less economically developed who lack not only the technology but also the needed infrastructure. (See Digital Divide Council’s What is the Digital Divide?)
Technology in context
With all these in the context of digital transformation, it is clear that all the latest technologies are still, basically, tools for our use. A well-rounded definition of technology could be stated as a “systematic treatment of an art, craft, or technique.” And, of course, what better way to fully apply all the advancements in technology than for the use, ease, and convenience of businesses, employees, customers, the general public－in other words, for humanity. To that higher, nobler end, let’s talk about how businesses and delivering great customer experience in the context of what has been said thus far.
A frictionless customer experience
In the context of today’s market landscape, companies must recognize the need for an omnichannel approach, one that is attuned to today’s reality which, in one sense, is in a transition towards full migration to digital or, in another sense, may be the case from here on as the customer is still human, thus the human element can never be disregarded. While companies shift to digital, they must still be able to allow customers to move smoothly in their own individual customer journeys.
For example, in line with this, a CX Focus Magazine article recommends “understanding how customers move across channels to complete tasks and request information. Customers don’t think in terms of channels or company departments－they will only think whether the overall experience they have with your brand is either a good one or a bad one.”
Thus, it remains important to listen to the voice of the customer and pay attention to their movements as they navigate through the customer path to better map an inclusive customer journey with better-positioned touchpoints.
Automation and chatbots
Automation is a way to improve processes in the business value chain. It can significantly increase efficiency so the business can deliver the most value for the least possible cost. Gaps, constraints, and wait times in business processes not only contribute to unnecessary costs but also could lead to friction on the side of the customer, which could, in turn, lead to abandonment and, thus, loss of potential sale.
An example of a constraint is the human element’s purposeless interaction which increases the risk of friction. Where interactions can be time-consuming or repetitive for the customer-facing staff, or time-consuming or purposeless for the customer, a chatbot would do.
With automation, you can eliminate friction by streamlining your processes and reducing customer wait time. Aim for faster checkouts, minimized steps, and frictionless payments. With chatbots, however－well, take note also that they can never have all the answers ready.
Customers still value human interaction, though. However, there are some steps in the process they prefer doing on their own. There are those who would prefer human interaction, especially when chatbots’ ready answers just don’t suffice, or simply just becoming annoying.
Sometimes, automated, predetermined choices create friction. Perhaps allow for mix and match to allow personalization rather than abandoning all the choices altogether. McDonald’s, for example, not only invested in self-service in-store ordering kiosks but has reintroduced their Mix and Match Deal so customers, ranging from loyal fans who may be under budget constraints to customers who prefer their own combinations, can mix and match as they please. We stress, here, the range because it’s not always about low prices, customers also want to have options. This is the reality that Walmart, for example, needed to address when they ventured into e-commerce as an alternative for those who may prefer it to having to go to a physical store.
On the other hand, Amazon, from the digital standpoint, introduced Amazon Fresh for those who want to personally choose the products they want to buy, and personally see the products themselves rather than just relying on deliveries from fulfillment centers. To make it frictionless, Amazon Fresh also introduced the Just Walk Out shopping, wherein customers can opt to pay for items they take from the physical shelves into their virtual carts.
Personalization is important because a customer’s experience is personal. Offerings remain at arm’s length, outside the buyer, but experiences are inherently personal (Pine and Gilmore, 2011).
Staging a personalized customer experience
Pine and Gilmore introduced the concept of the Experience Economy in 1998. They argued companies can no longer just offer goods and services but, more importantly, also the resulting experience, “rich with sensations, created within each customer.” According to them, the company must be able to set up a stage where the individual, as though in a theater, can engage on an emotional, physical, intellectual, or even spiritual level. Their point is that “no two people can have the same experience.” This means that “each experience derives from the interaction between the staged event and the individual’s prior state of being.”
To add to this, Kotler et al. (2021) proposed that companies must focus on delivering the new customer experience at three different levels: informative, interactive, and immersive. “Whenever customers seek for answers, long for conversations, and surround themselves with sensory experiences, companies should be ready to deliver.”
Better customer experience for better customer value
Whatever your brand is offering, its worthwhileness, if you will, depends on how your customers value your product or service. However, following Pine and Gilmore, you can set the stage－maybe rearrange the set, adjust the lights, reorient your cast members－and provide a worthwhile customer experience. Basically, rethink ways of creating value by rethinking how you would want to be perceived. This is important because customer value is one of the primary drivers of business results.
Customers identify themselves with companies or brands that value the same things as them and value them as customers. It is by improving your customers’ experience with your brand that you can increase customer value. Further, investing in customer experience and making it a top priority would lead to a lasting positive connection with your customers. In other words, by putting emphasis on customer experience (CX), not only would you be increasing customer value (CV) but also increase the customer lifetime value (CLV), which could further generate revenue as customers themselves advocate for your brand’s products and services from their personal experiences.
Kotler, P., Kartajaya, H., and Setiawan, I. (2021). Marketing 5.0: Technology for Humanity. John Wiley & Sons, Inc.
Pine II, J. and Gilmore, J. (2011). The Experience Economy, Updated Edition. Harvard Business Review Press.
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Ivan Deligero is a contributing author at StratAccess. He likes deep dives into the bottom of things and sharing discoveries and strategies towards desired goals. His years of exposure in different industries have led to a deeper insight into organizational structures and operations, as well as the importance of process improvement. In his free time, he also reads and writes about some recent thoughts in philosophy.