New research on the efficacy of global investment in digital transformation reveals yet more bad news in the customer experience arena—indicating a mounting crisis that is not only fueling customer exodus, but also bankrupting budgets.
The new study from digital application firm Kony benchmarks business investments and customer experiences in four vertical industries—banking, retail, utilities, and healthcare. Within these industries, nearly $5 trillion in investment dollars have yielded little improvement, with only 19 percent of consumers reporting any significant improvement in the experiences offered to them.
The report, The Kony Digital Experience Survey 2019, found that misalignment is not only driven by businesses out of sync with customers, but also because consumers do not believe businesses are investing in digital initiatives that result in meaningful outcomes. In every market and every vertical, consumers underestimated the number of businesses that are investing heavily in every CX outcome by at least 50 percent.
Crisis from every angle
Consumers also are not giving businesses credit for the level of investments they are making. Conversely, businesses are not listening to—or understanding—the evolving needs of their customers. According to the research, only 28 percent of enterprise digital transformation initiatives are started specifically with customer needs as the priority.
“Improvements in costs and efficiencies are always welcomed and clearly important to project funding, but the real returns and real impact of digital starts and stops with its impact on the customer experience,” said Thomas E. Hogan, chairman and CEO at Kony, Inc., in a news release.
The study also ranks businesses efforts on the Kony Digital Experience Index (KDXi). Leaders and Laggards are scored based on how their business delivers on several digital experience outcomes, such as
- Improving web experiences to make them easier to navigate, more engaging and intuitive to use
- Providing comprehensive online and mobile capabilities so users can do everything online or on their mobile device, quickly and easily, and
- Offering cutting-edge digital experiences such as AI, chat bots and augmented reality.
“The Kony Digital Experience Indexhighlights a chasm between consumer expectations and business spending,” added Hogan. “The fact that only one in five consumer respondents felt any significant improvement demonstrates the enormous opportunity that remains for businesses to leverage digital for customer loyalty, service levels, convenience, and commerce.”
Leaders and Laggards
While there are a number of differences between KDXi Leaders and Laggards, the consistent theme for Laggards is an internal focus (improving workflow productivity, cost reduction, better internal collaboration), while KDXi Leaders have an external focus (meeting customers’ changing expectations, agility, risk management—such as cybersecurity). Furthermore, Leaders consistently recognize the need for change and are prepared to take risks. They have agile, customer-focused organizations that recognize digital transformation is a cultural change, not just a technological change.
“Laggards are simply trying to keep pace and improve internal efficiencies. The customer experience is not the main focus, and that’s painfully obvious to the customer,” said Hogan. “Businesses must listen to and understand customer needs such as data security, digital support and improving mobile experiences, which are especially high in the U.S. and North America.”
Download the full report here.
The findings in Kony’s Digital Experience Index are based on 1,600 respondents across the U.S., Europe and Asia. Of that group, 800 were major contributors or leaders of digital transformation initiatives in Enterprise businesses with 500+ employees.
