Digital Transformation Starts with Customer Experience

I attend­ed the inter­view with Nick Drake, Senior Vice Pres­i­dent, Direct to Con­sumer at T‑Mobile and Otto Rosen­berg­er who serves as CMO at the Hostel­world Group at the Adobe Sum­mit. The key take away of the entire ses­sion was that cus­tomer expe­ri­ence is the begin­ning and the core of dig­i­tal trans­for­ma­tions – it is where it all begins.

T‑Mobile and Hostel­world are com­plete­ly dif­fer­ent com­pa­nies, but what kind of con­nects them is the fact that they both focused on cus­tomer expe­ri­ence when trans­form­ing their companies.

So why is cus­tomer expe­ri­ence the key to it all? Because it links orga­ni­za­tions to cus­tomers at an emo­tion­al and phys­i­o­log­i­cal level.

The sto­ry of Hostelworld

Hostel­world is now a lead­ing hos­tel book­ing plat­form. Three years ago, it was set up as just a book­ing engine, as a trans­ac­tion­al busi­ness. Today, the com­pa­ny accom­pa­nies their cus­tomers through­out the entire trip. Hostel­world oper­ates glob­al­ly, with most of the cus­tomers based in North Amer­i­ca, where­as 30% to 35% come from Europe. What fueled their growth? They went beyond book­ing, and helped their cus­tomers out in each and every way so that they get the best offers around, and can enjoy invi­ta­tions and group tours dur­ing the trip. Almost 50% of their book­ers use the app when they are trav­el­ling, and 90% of these peo­ple say the app made their trip so much more fun.

So what did Hostel­world do dif­fer­ent­ly? They tapped into the emo­tions of their cus­tomers, and offered them the expe­ri­ences they were look­ing for. Yes, a lot of inter­nal changes were required, but it was worth it. They had to work on their busi­ness goals, oper­at­ing prin­ci­ples, and the team they had. Addi­tion­al­ly, they had to divide the bud­get appro­pri­ate­ly between mar­ket­ing and tech.

T‑Mobile’s Jour­ney

Drake shared the jour­ney of T‑Mobile. When Drake joined T‑Mobile, the com­pa­ny was doing well in terms of cus­tomer acqui­si­tion, but they weren’t liv­ing up to its poten­tial. Only 35% of all acqui­si­tions were made on the dig­i­tal chan­nel, and so Drake’s task was to raise the bar.

T‑Mobile had to rad­i­cal­ly trans­form their busi­ness, giv­ing the IT team enough breath­ing space to plat­form their lega­cy. They decid­ed to go for­ward with mul­ti tech­nol­o­gy plat­forms, tak­ing a rad­i­cal­ly dif­fer­ent approach to cus­tomer expe­ri­ence, but they had to bring about a lot of changes. They under­stood their audi­ence, and fig­ured out ways to inter­act with them over var­i­ous chan­nels, while rein­vent­ing and cus­tomiz­ing their prod­uct offerings.

T‑Mobile has seen sur­pris­ing results, and dou­bled their sub­scriber base since they stepped into the race. They com­plete­ly redesigned them­selves using the Adobe Mar­ket­ing Cloud. Using per­son­al­ized con­tent, they reduced clicks by 60%, and drove high­er engage­ment lev­els. From a tech­ni­cal per­spec­tive, they rede­vel­oped their mobile app in order to pro­vide a bet­ter ser­vice. A new fea­ture called asyn­chro­nous mes­sag­ing was intro­duced, which allows users to strike up a con­ver­sa­tion with cus­tomer services.

Drake advised that it is impor­tant to think about what kind of busi­ness you are in, and then invest in both the cur­rent day and future. Plus, there should be a bal­ance between the com­mit­ment made to the share­hold­ers and then ensur­ing that com­mit­ments met for the next few years.

So what does this boil down to in the end?

Expe­ri­ences impact the way in which peo­ple feel and respond. But busi­ness­es must pro­vide rich and immer­sive expe­ri­ences that go deep­er than redesign­ing and man­ag­ing inter­ac­tions. Expe­ri­ence is more about build­ing, and then nur­tur­ing an emo­tion­al con­nec­tion with your audi­ence – so that they com­plete­ly con­nect to your brand.

Your busi­ness may not have begun to trans­form dig­i­tal­ly, but soon­er or lat­er, you’ll have to take the step. And if you don’t, you’ll be eat­en up by the com­pe­ti­tion- that is what it gets down to.