In a recent seminar we discussed the impact of technological trends, innovation and digitalization during lunch-break. While everybody had a clear opinion on trends and innovation, it was very different when moving to digitalization. Some even called it a lasting hype that will go away and be replaced by a new buzzword soon. I don’t share this view but found the comments interesting.
What really caught my attention was one person asking: “how would I as a consumer feel digitalization; and would I experience a benefit?” This made me think...
If we look at it from a consumer’s point of view I see three connected components, which lead to a successful digitalization effort. These are: “digital”, “connected processes” and “additional customer value”.
Digitalization requires one or several digital elements as the word includes. A few examples are:
- You offer your clients specific web-based information available from anywhere and at any time
- An online reservation system enables your clients to book appointments even during off-hours
- A mobile portal or app allows customers interacting with your service while-on-the go
- Recurring manual data compilation or paper form efforts are transformed into a digital format to further process data without re-typing. At best, this frees up time for more personal client interactions where valuable
2) “Connected Processes”
Processes need to be designed to connect the digital and analogue channels in a seamless way. It is not sufficient to just exchange some analogue activities with a digital one. And not everything must be digital. Analogue (humans) and digital (machines) interactions coexist and should continue to do so.
For example: as many garages do, mine also offers an online booking system for their “winter service”. This helps their many clients to prepare their vehicles for the snowy winter season where I live. When you book your service slot online, many activities start automatically in the background.
- Up to 48 hours of your booking, you can change your slot to a new day at no cost
- A friendly reminder SMS or email is sent to you two days before your appointment
- Your stored winter tires get pulled from their storage facility the night before your visit. Same applies for oil, water and frost-controls
- If you had chosen to get a replacement vehicle, the rental car is parked for you
- When you arrive with your car, all the paper work is already printed for the mechanic
- A service agent greets you, offers you coffee and summarizes your booked activities to make sure nothing got forgotten
- You can then either wait for your car being serviced or leave with the replacement vehicle if selected
- If anything unforeseeable is detected you get a personal call, email or SMS with a quote, which you can then confirm for execution
- When you pick up your car your final invoice is already printed or you pay directly on-site
This leads to the third component -> the additional customer value. For me this is the most important one in a digitalization effort.
3) “Additional customer value”
One could use “digital” and “connected processes” to streamline, automate and accelerate their service offerings. It might generate additional revenue streams or cost savings. But if customers do not experience additional value (i.e. reduced prices, more channels, better service) digitalization efforts are not visible for them.
How many companies go digital and then dramatically reduce their personal interaction opportunities? How many times have you failed speaking to a human being in a timely manner when new web-forms or email inquiries were not sufficient? What about those companies which now send you Email invoices but at the same time charge you if you still prefer paper versions?
If you add a new service but reduce another one at the same time, you have not created additional value for your customer. You have created a wash at best.
Reflecting on the garage example, clients can still call for reservations or book online at any time. Digital and analogue processes interplay seamlessly and exchange relevant information automatically. The same service agents have much more time to personally interact with their customers and provide extra on-site services. In addition, the increased flexibility helps customers to better plan around their other commitments. For me this is a successful digitalization effort which touches on all three components and most important, creates true additional value for their clients.
For me therefore, successful Digitalization = [Digital] + [Connected Processes] + [Additional Customer Value].
Chris Frey @chrisfrey.com