The most successful and widely admired businesses are nimble, agile, fully digital organizations. Their successes are driving home important lessons: Companies must go beyond providing online touchpoints for selling products and services and adopt a more holistic digital operational model.
What does that mean? Top-performing companies are digital because of the way they operate—from the way they use data to their organizational structure. This “digital operating model” enables them to create products and experiences that are fluid across physical and digital experiences. In other words, because everything is connected behind the scenes, a customer’s experience with their brand is fully integrated and consistent.
But what does an integrated experience look like? What does it mean to connect digital experiences with physical? You may be surprised at how this challenge transcends industries.
Today, customer experience can make or break companies. And the ones who do it well, like Target, Starbucks, and Amazon, have been able to build empires with loyal customers who return to buy over and over again. In other words, the best brands in the world have fully integrated and orchestrated their internal technology and operations to delivery a seamless experience externally, across channels. They are nimble, agile — and prioritize solving problems and adding value for their customers through every touchpoint.
This trend was already well into effect before the pandemic hit. Customers do not emotionally engage with individual channels. They engage with entire brands, whether through digital (the Target app) or at a traditional brick-and-mortar location (the Target store). Consumers easily, albeit unconsciously, recognize organizations that do this well — and respond with loyalty and wallet share. According to Forbes, “Brands that have superior customer experience bring in 5.7 times more revenue than their competitors.”
If you need proof, look at how Target recently topped Wall Street forecasts despite continued struggles for most retailers. Why? While a lot of people thought the drive-up experience would cannibalize sales—people spend more when they’re walking the halls of Target—they saw the opposite to be true. Shoppers that used the Target app for drive-up orders actually spent more and led to increased sales across the board: In-store sales went up 9%, digital sales went up 50%, and overall spending was up 25%. Amazon, while no longer flying as high as in 2020, recently became the world’s largest retailer and is reportedly making another play for physical locations, this time with department stores.
Companies that have leaned into optimizing for a unified customer experience are taking strategic risks and making bold moves—and they are reaping the rewards.
Take the powersports vehicle maker Polaris. Their approach to operational dexterity has helped them deliver for their customers and grow the company at a time when other manufacturers in their sector are floundering. Careful insight gathering led Polaris to realize their customers wanted an easier, more seamless experience to connect with local maintenance providers and vehicle dealers. They launched RiseReady, a platform to help their customers easily schedule service, tap into personalized vehicle and maintenance information, and get transparent service pricing, appointment reminders and notifications along with how-to content for the “do-it-yourself” approach.
Now Polaris is more than just a manufacturer at a single point of sale, but an ongoing presence in the lives of their customers to help them get the most satisfaction possible from their vehicles. Because of the relentless focus on customer experience, and other initiatives enabled by a digital operating model, Polaris reported a 40 percent increase in second quarter sales, despite inventory challenges. The company, which is said to have adjusted better than other manufacturers to the conditions of the pandemic, did so because of its “operational dexterity and nimble approach,” CEO Mike Speetzen said in summer 2021.
Such success stories show how unifying digital and analog experiences can be so valuable for companies amid a once-in-a-century global health crisis.
But the main takeaway here shouldn’t be pandemic-specific: Unifying the digital and physical is crucial, whether it requires more traditionally analog companies focusing on digital or more digital companies focusing on physical.
What’s important to understand here is the holistic nature of the challenge. Not effectively integrating analog and digital operations will be felt by customers, even if the lack of integration occurs in parts of the organization that they don’t engage with directly. Indeed, it’s increasingly—and glaringly—evident when online and real-world experiences are not thoughtfully aligned.
This is seen and experienced at a deeply emotional level in healthcare. A good example is a healthcare provider’s oncology department, whose “product” was diagnosis, treatment, and personal care of cancer patients. Delivering this well requires a seamless blend of digital systems that let people engage on a human level, but we’ve found serious gaps that affected performance. Patients can have very thorough and positive in-person experiences. But the email and text systems that communicate potentially upsetting test results can be cold and impersonal. Patients can learn about potentially life-altering news with a casual text in the middle of driving their kids to school or during an important business meeting.
As a result, meeting with the doctor in person vs. communicating or receiving information digitally felt like entirely separate experiences, and the patients’ overall experience with the provider suffered, to say nothing of the additional stress of learning about bad news via an unexpected text message. This was a prime example of how a question like, “what’s the best way to communicate with patients?” is not about simply deciding to buy and incorporate texting software. It’s a question first and foremost about what kind of experience the patient wants to have. How does the provider want patients to feel? What time of day or where should they be when they interact? What should the tone of messages be?
Without considering these dimensions, healthcare providers could easily fall in the trap of adding digital technology that isn’t harmonious with the in-person experience of hardworking staff, who are performing at a high level to take care of their patients. All of their empathy, information, and assurances can be overshadowed by problematic touchpoints that are not similarly equipped.
While the pandemic has certainly affected businesses that are highly local in nature, such as healthcare providers, banks, and utilities, it also has quickened the trend of experience unification across many industries. Two-thirds of CEOs recently said their digital transformation efforts were accelerated because of COVID-19 and that their budget would be permanently altered going forward as a result.
Instead of trying endless digital transformation programs that seem to never produce desired results, we urge our clients to stop trying to “do” digital and instead focus on becoming a digital company.
By moving toward a digital operating model, companies will be in position to make experience-unifying moves like Polaris, Target, and Amazon. Here are three critical changes we see make a big impact for companies:
With these operating measures in place, organizations will find themselves in the best position to stitch their analog, digital, back-of-the-house, supply chain, and storefront experiences together.
Without these measures, and without a focus on uniting the physical and digital worlds, organizations are simply leaving money on the table—a lesson that will outlive the pandemic.
Adopting digital strategies and product development procedures that unite these two worlds reduce costs and increase efficiency. They boost revenue from increased customer loyalty and long-term value. While many companies are getting this digital/analog integration right, and many were forced to move quickly because of the pandemic, too many still aren’t moving to digitize their operations entirely. Waiting much longer is a mistake—one customers and clients will soon feel if they don’t feel it already.