Digital transformation, at its core, has always been about future-proofing businesses for survival in increasingly digital economies. Unlike most of life, which has been turned on its head during the COVID-19 crisis, digital transformation remains the same, only with the future businesses were preparing for, much closer.
Just as before March 2020, the two main catalysts behind businesses embarking on digital transformation are the need to compete in markets disrupted by digitally more mature competitors, and perhaps even more so, to satisfy customers increasingly seeking always-on, performance-based and integrated solutions. These catalysts remain, stronger than ever, accelerated by the changes we have seen and those yet to come. This article will discuss the four main Covid-19 trends we have seen putting pressure on businesses and how human-centred digital transformation can help your business weather these storms.
Social distancing and decreased spending
The first major Covid-related trend – going virtual – has accelerated the potential for businesses to be disrupted by digitally more mature competitors. Social distancing requirements have forced the world to go virtual, but through this initial inconvenience, people have been exposed to digital’s strengths. People with buying power, even those who were the last defence against hi-tech, have learned to use video conferencing tools and survived without an office printer. These changes will not be reversed. By the time the infection peak has been weathered, even these customers will not accept a bank that requires in-branch assistance and manual forms.
The second major trend – decreased spending – means that customers will become increasingly conscious of what they are getting in return for their tight budgets. Already, South Africa has witnessed a huge decrease in spending, 60% of South Africans have reported the loss of some income and 65% say they are refraining from purchases they would otherwise make due to uncertainty around the economy (BusinessTech 2020). Predictions of rising rates of unemployment and sizable shrinkage of the economy only mean businesses will continue to feel the pandemic’s effects and recovery will not be as fast as we would have hoped. Survival for businesses in this time will be challenging but increasingly difficult for businesses, who are not listening to how these events have changed their customers’ expectations.
These pressures alone are incredibly challenging, but companies are also feeling two other Covid-related trends that are not, at least at first glance, related to digital transformation. What both of the catalysts we have discussed have in common is that they are solved by digital transformations that are human-first rather than technology-first. But, how can a company justify new customer-centric initiatives when they are overwhelmed with the huge pressure to cut costs and a massive unpredictability of supply and demand?
Wowing customers and earning their trust
The worst thing a business can do is forget that they are cost-cutting in order to stay in the game. Baseless cost-cutting could put a company further at risk, but strategic cost-cutting can save money while at the same time, productively addressing the four pillars of customer-centricity: Wow me, earn my trust, make it easy, and know me.
Wowing customers and earning their trust aligns with the first and second major Covid-19 trends, and therefore are both catalysts for digital transformation. Customers who trust you and are continually wow-ed by your products and services have little need for alternatives, and their loyalty will mean they continue spending with you even in hard times.
Even if you are able to retain most of your customers, there may still be a need to cut costs internally. Organisations can reduce bloat while servicing customers better if they take a close look at customer behaviour. Customers feel internal inefficiencies as friction in their purchasing experience. Processes that frustrate customers should be automated, reimagined or cut altogether.
Customers are happiest when they feel businesses not only understand their needs but are able to pre-empt them. In a time when ensuring supply due to restriction on movement requires major foresight and customer demand has either dried up or is insatiable, what would a better capability be, other than the ability to understand and pre-empt customer needs?
Businesses need to embrace digital transformation
I would like to tell you that a customer-centric coat of digital transformation can be easily painted on your organisation by the marketing department, but true transformation is more difficult and must go much deeper. This might be why many businesses are still missing the mark. Although 44% of businesses, in a customer experience survey conducted by Salesforce, say they have adopted a digital approach to interacting with their customers, more than half of these customers say companies are failing to deliver on their expectations for great experiences.
New demands placed on businesses in the wake of Covid-19 are creating critical challenges for traditional organisations. Going virtual, decreased spending, internal cost-cutting, and unpredictable supply chains are further adding to the pressure to transform to meet a digital marketplace with customers who demand digital service. However difficult the serious effort required across all the levels of the organisation, if businesses embrace digital transformation, centred on humans, they can achieve both savings and excellent customer experience. This will render them future proof and fit to survive in an increasingly disruptive economy.