What’s Holding Back Your Digital Transformation

Everyone seems to be on the digital transformation bandwagon.  Recent research by Mulesoft shows that 88% of IT decision makers either have an initiative underway or will within three years.  So, what do they hope to accomplish with these transformative efforts?  Over 60% said that they want to “create great customer experiences,” with 77% looking to improve existing business processes.  But recent experience sheds some light on execution challenges they face, as respondents indicated that only half were able to complete digital transformation projects undertaken in the past year.  The reasons they cited: time constraints and misaligned priorities.

Priorities and Alignment

The top priorities for IT decision makers in the study included the usual suspects:  Security, cloud, application integration, and BI/Analytics.  Although these may be the must-have list for IT, the business leaders may have other priorities. The mismatch can result in priority misalignment and unfunded or stalled projects. A lack of understanding of common objectives across teams, functions, or business units is a result of poor organizational alignment. You see it play out all the time as CIOs who want to focus on securing infrastructure and data, while the business wants just to keep innovating, creating conflicting priorities. Both parties need to be aligned with the notion that security is a priority, or is frankly just important, otherwise you will have constant struggles for resources and budget dollars. The result is often a loss of momentum on projects or misaligned priorities.

To get better alignment, you need start with a shared sense of purpose, and this usually begins at the organizational level.  Understanding your purpose is the foundation for your strategy, business model, operational model, resources, and systems.  You will invest in and pay attention to what is most important, your reason for being.  But before you schedule the company offsite to ponder the question of why you exist, there may be a ready answer.  In his recent letter to shareholders, Jeff Bezos of Amazon described why they exist and hence where they focus: "You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality."  In Bezos-speak, “Day 1” refers to the life stage of a business that is growing and innovating.  Day 2 is the stage when maturity is reached followed by stagnation and ultimately the demise of a business. Amazon’s reason for being is the customer.  In the letter, he expands further on the point: "Staying in Day 1 requires you to experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight. A customer-obsessed culture best creates the conditions where all of that can happen."

So, aligning every aspect of your organization around the customer could be the rallying point to develop a shared sense of purpose and solve misalignment issues that can bog down initiatives, or “experiments,” to use Bezos’ terminology.  As you scan the list of technology priorities from the study, one of in particular stands out as having the potential to encourage the alignment necessary for digital transformation.  BI/Analytics could be a great way to align around the customer and prioritize projects that will deliver the greatest impact on customer experience.  Let’s look at are few reasons why.

The Case for BI/Analytics and Alignment

There are three reasons better alignment can be achieved with BI/Analytics:

  1. Creates an external focus on the customer -  Rather than internally focused process improvement, organizations can refocus externally to the data-driven customer journey, moving from efficiency to innovation using data and analytics in new ways that drive value.
  2. Aligns with growth and innovation – By using data and analytics, internal IT is an engine of innovation rather than just the support function.  This puts the IT team on the same side of the table as their business counterparts, developing and executing on new ideas.
  3. Exposes untapped potential –  Existing customer data is one the last untapped resources within organizations. By combing through previous transaction and support data, you can better understand behaviors and actions that can inform decisions regarding new offerings and opportunities to delight your customers.

Conclusion

Proper alignment between IT and business can start by putting the customer first and understanding their needs, wants, and desires through the data they leave behind. You will likely find in there ways to meet the growth of your business and make IT the planter and cultivator of the seeds of growth. 

The New B2B Customer Experience: Table Stakes for the Enterprise

Buried in your mountain of customer transaction data, may lie the key to delivering a vastly better customer experience.  In our latest eBook -- The New Customer Experience: Using Data and Analytics to Drive Digital Transformation -- we talk about how B2B firms that are looking to stay competitive, need to make the transition from a “transaction-based” mindset to one based on deeper customer knowledge driven by data. Data that you already have!  This “data-led digital transformation,” is essential for creating better customer experiences that lead to greater customer trust, loyalty and ultimately profitability.  

Transaction-based Mindset

Organizations that operate with a transaction-based analytics mindset have two primary characteristics: 1. they tend to focus on “what happened”—reporting on historical data, and 2. they are company rather than customer oriented.  What’s lacking with traditional dashboards and reports consumed at the management level, is the understanding of why things happened. Sales have fallen for the last three quarters, customer attrition is growing but management often just sees these events in the aggregate, effecting a monolithic group called customers, without a deeper understanding of what is happening in different customer segments that may disproportionately impact results. The other challenge with a focus on past results is that you have no ability to alter the outcomes, that drop in sales already happened, you can’t go back it time. The easy way to determine whether you are operating in transaction mode is the degree to which you understand and can differentiate your customers. Customer segmentation is where every data-led digital transformation begins.  

Transaction mindset is about managers using data to make decisions after the fact, while digital transformation is about sales reps and customer using analytics making decisions in real-time. This transformation is essential to delivering the new B2B customer experience, and it has now become competitive table stakes for enterprises across industries.

Data-led Digital Transformation

The new B2B customer experience is about helping buyers make smarter, faster decisions by being “context-aware” during every phase of the customer lifecycle. Context is most easily understood as the buyer’s current situation or circumstances. Are they a new customer or repeat? What type of customer (size, location, industry sub-segment, etc.)? What are their specific needs/requirements?  Which products are the best fit? When do they need it? What is their price point? What are comparative offerings?  What is their level of knowledge/experience with the product? What other value-added offerings are appropriate?

B2B companies have thrived in the past by having a deep understanding of their customers’ needs and providing excellent personal service. They delivered this high-touch service through direct customer contact with field and service reps. The new B2B customer experience builds on this notion of personal service but augments the personal touch with a digital en­abler: data and advanced analytics that deliver deeper knowledge of customer needs and buying behaviors.  The new B2B cus­tomer experience means anticipating the information they will need to make informed buying decisions, and predicting when, how and what type of support they will need in the future.

Getting Started

To help you jumpstart your efforts, in the eBook, we drill down deeper on the key enablers of your digital transformation journey:

  • Key elements of the new B2B customer experience
  • Four common barriers to digital transformation using data
  • Your essential B2B analytics toolset

In the final chapter, we spell out the best practices for accelerating your analytics initiatives without taking on too much cost or risk. We hope that you find this insightful and informative.
 

Gartner Conference Recap: Using Data to Map Your Customer Journey

At the recent Gartner Data & Analytics Summit, AI and machine learning got a lot of attention. While these topics are important for mapping your digital transformation long term, customer analytics are still the most relevant for today.  According to Gartner, customer analytics continues to rank highest in terms of technology investment for customer experience (CX) projects.  Further, they anticipate that by 2020, more than 40% of all data analytics projects will relate to an aspect of customer experience.

So what can you do now to start to understand the different elements of your customer experience?  Start to think about your customer journey, from initial inquiry to customer support. What makes your customers happy, loyal, and repeat purchasers. You need data to help answer these questions.

Moments of Truth

It’s important to understand your customer as much or more than your technology. You need to understand your typical buying cycle and customer buying behavior, and a customer journey map can help.  Per Gartner, there are "Moments of Truth" within activity streams that fluctuate as customers move from buying cycle to owning cycle, and back to buying.  These moments are key opportunities to make a strong, lasting impression.

Gartner describes these moments as three major customer activities that include Explore, Evaluate and Engage.  The graphic below shows how the cycle works, with moments of truth preceding the “off ramps” where customers could abandon your product or service if they have a bad experience.    

Source: Gartner

Source: Gartner

 

Explore and Evaluate

Customers want transparency and choice. And they want to research products and talk to experts to help them make informed decisions.  This is where trust is established, with the customer determining whether they are being manipulated or empowered, or inundated and confused.  Building customer segmentation data based on records of past purchases across your customer base can help match product and price that is appropriate for each customer. It’s not about manipulation, but helping them quickly and easily finding the right product or service at a price point that meets their expectations.  The more you know about them, the better you can help them make an informed choice. Using segmentation and customer archetypes helps jump start the process by presenting them with the appropriate products, at a price they are willing to pay, that returns acceptable margins to the business.

Engagement

In the Gartner model, engagement is the most prominent in the “Owning” cycle, where customers consume products and services, and develop impressions of the overall experience. As the graphic above shows, abandonment can be a result of a poor experience at moments of truth. Again, customer analytics can help you understand customer needs and behaviors post sales, as they consume or use your product or service.  Using past customer data, you can look for patterns of use and behaviors that may lead to abandonment.  For example, there may be a spike in support calls from a customer followed by a reduction in purchases. Or perhaps there are seasonal considerations for a certain customer segment that create inventory and staffing challenges that need to be anticipated. 

Source of Customer Data

So where might you find the data to better understand your customers at each leg of the journey?  Gartner suggests the following:

  • Direct feedback surveys such as relationship, transactional or special purpose survey.
  • Indirect feedback such as text, speech and interaction analytics for customer care.
  • Operational data from CRM systems, call center software and marketing analytics to infer customer perceptions.
  • Market research such as marketing department studies gathered to define and understand the target audience.
  • Qualitative research including focus groups, online research communities, and ethnographic research.

For most B2B firms, the operational data from CRM and transaction systems will likely be the best place to start, followed by direct and indirect feedback from surveys and call centers. These data already exist or can be easily obtained and could help accelerate your journey mapping exercise to identify areas of dissatisfaction or missed opportunities.  

Recommendations

In her session, Maximizing Value along the Customer Journey, analyst Melissa Davis offered up the follow recommendations:

  1. Identify high-priority customers – Identify the highest impact customer segments (likely your top 20% of customers that deliver 80% of your revenue and profitability).  This is your starting point for customer analytics.
  2. Identify high-priority moments— Identify places on the buying journey that disproportionately create or destroy customer loyalty and advocacy.  Look at conversion, abandonment and churn around these moments.
  3. Identify high-priority investments in customer analytics— Work with LOB leaders and IT to create an inventory of data analytics competencies and develop a road map of key data analytics projects.

While advanced analytics (AI, machine learning) may be on your road map for the future, make sure you are focused today on customer analytics that will create demonstrable value along the customer journey.