A digital transformation strategy helps an organization harness technologies to create new—or modify existing—business processes, culture, and customer experiences to deliver more value. This differs from a digitization strategy, which focuses on using technology to automate existing business processes. To do this effectively, leaders need to understand what their customers want and need and then design solutions that deliver value.
According to Vijay Pereira of NEOMA Business School, digital transformation requires a holistic and integrated approach that considers all aspects of an organization—from people and culture to processes and technology. “It’s important to consider how each of these areas must change for transformation to be successful,” said Pereira in an interview. “Only by adopting a holistic view can you develop a digital transformation strategy that will be successful in the long term.”
When crafting a digital transformation strategy, leaders should start by understanding the customer journey and mapping out touchpoints where digital solutions can make a difference. Once they clearly understand their customers’ needs, they can design digital solutions that will improve the customer experience. In fact, customer experience is often one of the main objectives of a digital transformation strategy. According to research conducted by American Express, 86% of customers say they’re willing to pay more for a better customer experience.
Adobe recently issued a large-scale study—comprising 12,000 global consumers—where 69% said providing valuable personal experiences is critical to rebuilding trust. This is especially critical in markets where trust drives customer loyalty and longevity. According to Anjul Bhambhri, senior vice president of Adobe Experience Cloud, digital trust is essential to success in the experience economy. “In the experience economy, companies must obsess over creating experiences that are not only personal and relevant but also trustworthy. The companies that get it right reap rewards in terms of customer loyalty and advocacy,” said Bhambhri in an interview.
Adobe’s research found that nearly three-quarters of consumers will take their business elsewhere if they don’t trust a company’s data handling practices. Furthermore, customers are almost three times more likely to become brand advocates if they trust the company.
Jack Tillotson of the University of Vaasa suggests that trust develops when technology becomes viewed as a facilitator of experience, not product benefits. “We know that technology supports the construction of personalized experiences through environments that include the company, consumers, and various other suppliers and partners,” he said in an interview. Tillotson later asserted that experience environments incorporate the importance of product benefits and channels as they attempt to support unique consumer interactions and flex to the different individual preferences and contexts of those interactions.
That said, according to Pereira, business ecosystems need to shift their focus away from product benefits and features and move toward the goal of creating end-to-end customer experiences that are trustworthy. “Only then will we see an increase in trust throughout the system,” he said. One such example is Haier. The Chinese company, which started as a refrigerator manufacturer, now sells everything from air conditioners to washing machines. As a result, it’s established a dominant market position—the world’s premier global appliance brand thirteen years straight—by becoming a platform provider that creates solutions for its countless ecosystem partners worldwide. Here are five lessons gleaned from Haier’s rise to power that can help you conceptualize an effective digital transformation strategy.
1. Define what trust means for your organization: What does it mean to be trustworthy? This is a loaded question with different answers for different companies. Take the time to sit down and consider what trust means for your brand. For Haier, trustworthiness is built on three core values: quality, design, and service. This means that customers can trust that their products will be well-made, aesthetically pleasing, and backed by engaging customer service.
2. Establish trust-building practices: Once you know what trust means for your company, you can begin to implement practices that will help build trust with your customers. These could include being transparent about data handling, providing helpful and timely customer service, and delivering on your promises. For Haier, it means always putting the customer first. So, when the company develops new products, they prioritize customer feedback and cater to customer needs.
3. Foster a culture of trust: A company’s culture plays a significant role in determining whether or not customers will trust it. So make sure your employees are on board with your trust-building practices and that they understand the importance of providing a trustworthy customer experience. For Haier, this includes regularly training employees on customer service best practices and ensuring that everyone, from the CEO to entry-level staff, is focused on providing a great customer experience.
4. Measure trust: Next, you must measure trust levels within your organization to gauge whether your efforts are paying off. Trust is often thought of as an intangible concept, but there are ways to measure it. For example, try conducting customer surveys or Net Promoter Score (NPS) polls to get a sense of your customer’s trust in your company. For Haier, this helps them fine-tune their customer service strategy and ensure that they are always putting the customer first.
5. Promote your trustworthy reputation: Last but not least, once you’ve established trust with your customers, it’s essential to promote your trustworthy reputation. This will help attract new customers and solidify loyalty among existing ones. You can share customer testimonials, write blog posts about your trust-building efforts, or even create a social media campaign. For Haier, this includes using the hashtag #trusthaier to show customers that they can trust the brand.
Digital trust is essential to success in today’s experience economy. By definition, trust is confidence in the reliability, truth, ability, or strength of someone or something. In the customer experience world, trust is built when a company establishes itself as reliable, truthful, helpful, and competent. Only then, posits Tillotson, will customers feel confident doing business with that company.
In summary, digital transformation is a journey, not a destination. In order to be successful, businesses need to start by understanding the needs of their customers and then design digital solutions that meet those needs. By doing so, they can build trust with their customers and create lasting relationships.
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Take Four Steps When Developing A Digital Transformation Strategy - Forbes
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