Plutora Blog - Release Management, Value Stream Management
Increase revenue by putting customer experience first in software deliveryReading time 8 minutes
The current state of affairs in the software industry is that every company collects a huge amount of data through different entry points, and every company – unless it has already gone through a digital transformation – has siloed teams. Development is separated from operations, operations is separated from product design, and product design is separated from business analysts and leaders. Those leaders are constantly trying to figure out how they’re going to disrupt their industry, increase market share, or improve various other metrics that serve as a barometer for their job performance. Many of these leaders have successfully led the charge for a DevOps culture in their respective organizations. But in the process, they have lost sight of the original imperative that all companies must live and die by the customer.
What companies need to do is to take the current state and move it to the right – to go from customer-aware to customer-led.
Customer experience should drive digital transformation
Customer experience, defined as the complete end-to-end interaction between the customer and the company, encompasses how customers are using a company’s goods and services, how they feel about those goods and services, and the company’s overall imprint on their daily lives. The customer relationship is dynamic with constantly shifting expectations, and it requires vigilant upkeep.
Digital transformation is customer-driven, so while Agile and DevOps enable faster software delivery, that is not an end in of itself. Ultimately, the goal is to deliver value directly to the customer via digital capabilities.
Cultural change: The four principles of modern application delivery
The modern application delivery model is governed by four principles, or threads, that are each individually important but become much stronger when bound into a knot. Once a secure foundation is established, application delivery teams can then start to accelerate and make real, decisive improvements to the development process in a way that is directed by the customer’s wants and needs.
Customer-centric improvements to speed and quality won’t go unnoticed. In time, customers will respond with higher engagement, improved loyalty, and a higher rate of conversion from competing brands and products. This creates a positive feedback loop, where the company and the customer feed off of each other and work together to optimize the product.
The four principles are as follows:
True Customer Obsession
Customer service is a function of operating a business, while customer obsession involves a total shift in the way we think about customer relationships. Slogging through tickets and resolving complaints is the bare minimum that customers expect. To go above and beyond, companies should constantly listen to customers and anticipate their wants and needs in order to continuously enhance and personalize the customer experience. In turn, this engenders loyalty in the customer and inspires advocacy.
Amazon is a classic example of this scenario. Jeff Bezos has attributed Amazon’s success to its obsessive-compulsive focus on the customer as opposed to obsession over the competitor. He differentiates between the two by drawing a line between the “missionary” and the “mercenary.” The missionary is building the product/service because they love the customer, product, and service. The mercenary is building the product/service so they can flip the company and make money. If you were a customer, which would you rather support?
Let the Customer Lead
Customers now have more options and power than ever. Many of us have downloaded an app with a five-star rating, decided it was junk, deleted it and moved onto another. The pace of technological growth dictates that soon, it will be just as simple to switch banks or change insurance policies. This is the kind of thing that has a lot of companies scared and motivates them to move quickly towards DevOps and Agile. Understanding how to read and capture metrics from the customer is crucial to being customer-led, which in turn is key for companies to survive the digital transformation era.
A Transition from Data-Rich to Insights-Driven
Despite the pressure to evolve, it is crucial to resist the impulse to make haphazard decisions. It’s easy to fall into a “keeping up with the joneses” mentality, where business leaders look at the competition and think: “so-and-so has a mobile app that does X, Y, and Z, so I need the same thing.”
It’s always better to take a measured approach and think long and hard about what your customers are doing. They are using a particular service or product because it delivers unique value. Try to use data to derive what the source of that unique value is. Figure out what they want from their experiences and use that insight to drive product improvement.
Be Fast & Connected
As recently as ten years ago, a major release to a web application meant shutting things down and doing things during blackout periods. It meant pushing code once every six months with a bug fix once a month or so. Pushing code was unusual – not a regular event. That, of course, was the wrong approach. Updates should be part of a company’s everyday rhythm. Instead of trying to be perfect, try to go fast. Try to get the results in front of the customers so that they can tell you if the results are effective. Move the whole process along faster so that you stay connected with your customers.
Investing in Customer Experience Leads to Measurable Results
Forrester uses a Customer Experience (CX) Index to evaluate the value of the customer experience. The CX Index score measures qualities like effectiveness, ease of use, emotion, retention, enrichment, and advocacy to determine how successful a company is in delivering experiences that create and sustain loyalty. Of the 287 brands across 19 industries ranked in Forrester’s 2018 CX Index, improvement remained stagnant for the third year in a row with no US brands providing excellent CX. Forrester Chief Research and Product Officer Cliff Condon comments:
“Positive emotions are instrumental in boosting customer loyalty – for example, among digital retail customers who feel valued, 92% plan to stay with the brand and 88% will increase their spending. Firms that focus on improving the aspects that matter to customers – and in turn drive revenue – will close the CX leadership gap.”
Forrester found that having a better customer experience can improve not just revenue, but also a company’s stock price. After comparing the leaders and laggards from the CX Index, they found that there was a 29-point difference in stock in favor of the leaders. Of course, correlation doesn’t equal causation, but these are strong indicators that having a better customer experience leads to measurable results. These are real reasons to think about using Agile and DevOps for digital transformation.
Improving the digital customer experience, defined as the quality of all of a user’s encounters with a company’s products, services, and brand, is a huge component of this whole process. Researching a product online, reading a company’s wikipedia article, and searching for tech support on mobile are all examples of digital CX. If a customer starts researching a company and can’t find a location marker for it on Google Maps, that’s a strike against the company’s credibility. Digital interactions are full of these touch points where it is extremely easy to make a snap judgment, especially now that expectations for a smooth and seamless experience are higher than ever before.
Eschewing the high-level view for a moment, let’s get into a typical example of what this means for the customer. Imagine that a user is browsing a webpage and trying to download a tax form. The user successfully downloads it, prints it, fills it out manually, drops it in the mailbox – and then what? The user spends days or weeks or months wondering what happened, without any validation or feedback. The user experiences anxiety – “Did my taxes compute correctly? Where’s my return, and when will I get it?”
Lucky for us, the process has since been completely transformed by tax preparation software companies like TurboTax. You get your W2, take a picture of it, and then the money goes into your bank account. That’s the power of digital transformation. It brings clarity and visibility to previously opaque processes. It’s an optimization that makes the customer’s life better.
This is only a short synopsis of what digital transformation is doing for every single industry that delivers a service or product to a customer. Whether you’re selling a car, a hotel room, or a logistics service, you’re going to think about what it is at the end of the day that the customer is looking for. What they want is value and if you can’t deliver value that’s quicker and faster, you’re going to be put out of business in a couple of years.
Want to learn more? Check out our on-demand webinar featuring Forrester Senior Analyst Chris Condo, Eliminate Black Box Development with Agile, DevOps, and Value Stream Management.