More and more businesses and industries are being run on software and delivered as online services. Meanwhile, increasing numbers of consumers interact with companies’ brands through digital channels and digital products, and their digital experience often decides whether they will buy from a company and return for more purchases.
According to McKinsey & Company research, over 60 percent of all customer interactions and product or service offerings in North America are now digital, with that percentage expected to grow. From searching the internet to seeing ads online and exploring websites, customers want to get information as quickly and effortlessly as possible. But if the process isn’t smooth and efficient, they go elsewhere. Recent research shows 64% of customers defected to another brand after having a poor digital customer experience, but 78% said they were more likely to be a repeat customer if they had an amazing customer experience on a digital channel.
What this means for your organization is that, in order to survive and thrive, you must recognize that, now and forever, all companies are essentially digital companies. And not just digital companies, but digital experience companies.63% of restaurants say their top strategic goal is improving digital customer engagement, according to HT's 25th annual Restaurant Technology Study
Just having a digital presence isn’t enough; in order to succeed in our increasingly digital world, your website or app must produce a great experience for customers and potential customers. The sooner you understand this and create a strategy that takes advantage of it, the more likely you are to be successful.
How to lose a customer during the digital journey
Being a digital experience company means that you are a true customer-centric company. But here’s an example of how a poor digital experience can drive a customer away.
My wife and I are huge fans of a certain clothing company, and we’ve often ordered their products via Amazon. But I decided to go to their website and order directly from them to support the company during the COVID-19 crisis. But what I experienced when I used their website for the first time was not positive. Their product-search filtering mechanism wasn’t all that good, making it hard to narrow down the clothes I was looking for. When I finally found what I wanted, there were no reviews and no fitting guide. But I went ahead and purchased several items anyway.
Two days after I made the purchase, I got an email saying that one of the items was out of stock. Supply and availability information like this should obviously be integrated and updated in real-time in the user interface so that a customer knows instantly – like they do on Amazon. Then the rest of my order didn’t arrive, and I couldn’t find any information on the website about where it was.
This and other shortcomings of this clothing company’s user experience sent me scurrying to Amazon, where I know instantly whether I’m going to be able to get something, what it’s like, and when I’m getting it. Amazon has the user experience-customer experience down pat.
Operators need to learn how to truly be a digital experience company to attract first-time buyers and retain customers. Connect the online ordering system to the inventory system; build an e-commerce engine and design a better user experience at the front end that makes shopping more convenient and helpful for their users before they become customers. This is all part of being a customer-centric company.
The business case for a great user and customer experience
If you have any doubt that delivering a great customer experience is imperative to business success, the data makes that equation irrefutable. Studies from McKinsey & Company and other sources confirm that companies that focus on good user experience design get benefits such as greater customer loyalty, increased revenue, a higher market valuation, and better-performing stock. And this is true for companies from large public corporations to start-ups.
Here are two examples that the McKinsey & Company study provides
- U.S. Bank (with Genpact) corrected the design of a tool that helped issuers and investors track collateralized loan obligations (CLOs) and gained a 40% increase in their market share as a CLO trustee over the first year.
- PayPal removed jargon and legal terminology from their international checkout to make it clearer and easier to use and achieved a significant increase in conversion and revenue.
- ESPN.com revenues jumped 35% after they listened to their community and incorporated that community’s suggestions into their homepage redesign, according to an InVision article.
Going forward, most interactions with a brand will be through digital channels; therefore, companies will need to focus on the design of their digital properties. User research will play a huge role, because great experiences will require deep understanding of the end user and the customer.
About the Author
Alfonso de la Nuez (https://alfonsodelanuez.com) is the Forbes Books author of The Digital Experience Company: Winning In The Digital Economy With Experience Insights. He also is the Chief Visionary Officer and a board member at UserTesting, where he advises the executive team with the company's strategic vision for building better customer experiences. With over 20 years of experience in the digital business industry, de la Nuez brings a wealth of knowledge to the table and is well-respected for his forward-thinking approach and ability to drive growth and innovation. Before joining UserTesting, he co-founded Xperience Consulting and UserZoom (merged with UserTesting in 2023), and has worked for brands like Dell and Icon Medialab. He holds three technology patents and has a BA in business from San Jose State University. Follow him on Twitter: @delanuez23.