Previously, I described why making strategic tradeoffs is crucial for the success of any digital transformation effort. I also suggested that diligently answering 5 questions would enable better results. In this section, I will rummage a bit through the first question: what value will you create for which customers?
What value will your digital transformation efforts create? Digital transformation is ultimately about using technology to create value for customers - to reduce effort, to simplify, save time and so on. Of course, we should have clear business objectives and think critically about technology. But over-fixation on these two things without sufficient attention to customer value will almost certainly yield suboptimal results. But in a sea of numerous possibilities, how do you identify what matters? Which value do you choose to pursue? Should you satisfy the functional needs of the customer or attempt to solve higher ones (emotional, social impact)?
For which customer segments? The tantalizing reverie across industries is 'a cohesive end to end experience for all our customers'. Persistently, this dream recedes and eludes. Frequently, it is because we are stretching limited resources to serve too many customers. Therefore it makes sense to choose. For example, a nursing school may pursue digitization efforts for 1st year students in their first semester. An e-commerce business may select first time buyers within a given city. A hotel chain may focus on multi-day conventions within a given Geography. How do you prioritize the customer segments in your organization? Which of these segments should not be targeted because of limited value or too much cost?
For which personas? Customer segmentation improves delivery focus but remains too lofty to maximize the impact of digital transformation efforts. To achieve more, we should delve deeper. We should strive to understand, prioritize and target personas that represent real people within the prioritized customer segments. The same nursing school may anchor transformation efforts on Rajesh, a 35 year old nursing student pursuing school while balancing full time work and supporting a family of three. The e-commerce business may select Juana, a 25 year old consultant that flies 3-4 times a month for work. The hotel may be most interested in Mwangi, a 50 year old seasoned event planner specializing in Pharmaceutical conventions. In your digital transformation efforts, which personas will you prioritize?
For which parts of their journeys? Some organizations have the capacity to define optimal end to end journeys for all their key personas. But very few have the requisite resources, attention and coordination to simultaneously improve all aspects of existing journeys. To succeed, we should prioritize sections of customer journeys for improvement. From our examples we might elect: ensuring that Rajesh has a memorable and effective student orientation (purchase - onboarding phase), making it easy for Juan to find and buy while on the move (inquiry-purchase phase) or effectively engaging Mwangi after the event with useful information to make sure he returns the subsequent year (usage to renewal phase). Which portions of our customers' journeys will you prioritize?
Will you deliver this value directly or indirectly? You have clarity about your intended value for key personas within selected segments. You have also isolated phases of the customer journey upon which to exert your efforts. Now, you have to decide how you should deliver this value. Sometimes the optimal way to deliver value to a customer is indirectly, by directing improvements towards certain employees, partners who in turn serve your customers (for example, saving customers time by reducing the effort expended by customer support teams). In many other cases, it may be more expedient to directly target customers (for instance, a self-service tool that empowers customers to check the status of their orders instead of depending on customer service teams). What is the case in your transformation efforts?
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