How Digital Innovation Can Help Customer Experience In Manufacturing
Customer experience (CX) and manufacturing may not be thought of as an area of particular significance in the wider world of digital transformation, and yet for manufacturers a positive CX today represents an area of crucial significance for many.
Particularly in light of the COVID pandemic, many manufacturers are seeking to improve the way they interact with customers, correctly assessing customer experience as a key competitive differentiator.
In this blog, we will take a look at the renewed significance of CX for manufacturers, how they are digitizing their processes to provide better experiences for customers, and take a look at where the industry is heading with regard to the implementation of CX strategies and how it combines with modern technology solutions.
Manufacturers and Digital Transformation
Manufacturers have for a long time been notably lagging behind other industries in digital transformation initiatives.
A pre-pandemic study showed that just 21% of manufacturing organizations rated themselves as “highly prepared” to address the emerging business models that Industry 4.0 brings.
Related Post: What Is Industry 4.0?
Digital maturity, a method of measuring how effectively companies leverage modern technology for their business goals, is gaining ground among manufacturers but remains a concern to be addressed.
This concern was glaringly apparent with the onset of the pandemic and the difficulties faced by those that did not have a digitally mature organization.
As supply chains experienced severe disruption that continues into 2022, manufacturers had to respond—with those who had already invested in digitization projects fairing far better in terms of their ability to monitor supply chain and procurement activities; and consequently reduce the overall financial impact by having better insight into their expenditures.
This has been referred to by many as the manufacturing industry’s “digital divide”, between those who were able to handle the cost optimization challenges presented during the pandemic and those who were not.
As a result, manufacturers are adopting digital technologies more than ever and placing digital transformation plans at the very top of their agendas for the foreseeable future as a way to not be caught out again.
Customer Experience and Manufacturing
Where does customer experience fit into this?
Firstly, much of what we would consider to be a strong CX plan today is centered around the use of data and analytics to understand what customers want and how they can be served in line with modern expectations—by this we mean that customers today have a greater expectation that online channels will be used exclusively (and effectively) for their custom.
As a result, customer experience has become a key cornerstone of a successful manufacturing organization, and ensuring that the tools and methods used to facilitate a positive CX will be an important aspect of a successful manufacturer in years to come.
What Are the Primary Customer Experience Pain Points?
Manufacturers today are facing some key challenges that must be overcome in order to better serve their customer base.
These challenges are connected and should typically be addressed with a plan for digitization that covers the three biggest challenges.
Lack of integrated data infrastructure
The way data is stored, retrieved, shared, and handled is a key determinant in the success of a modern business.
Organizations that fail to establish a level of data connectivity within the constituent parts of their company often find themselves having to contend with data silos.
69% of CFOs said that keeping information siloed in departments is the biggest or most common financial mistake that companies make today.
This can often manifest through the use of legacy applications within different departments which are not integrated.
As a result, information cannot be shared between stakeholders and valuable data that could otherwise be leveraged goes unutilized.
Inability to understand customer needs
Gaining insight into what a customer base wants from an organization and its products and services is what lies at the heart of innovating to better accommodate their needs.
A business that cannot garner these insights is at a disadvantage to its competitors.
Organizations that lack the touch points necessary to maintain a dialogue with their customers throughout the product lifecycle will not be able to respond effectively to criticism in order to improve the product.
The strength of a manufacturer’s feedback loop will largely be determined by their ability to engage with customers and offer them a platform or channel to offer their opinions on a service.
In addition, the data infrastructure that ties together departments—as far as customer experience is concerned this will usually be a customer relationship management (CRM) system—must be able to be accessed by those who are responsible for product development.
Not having even this modest level of connectivity leads to an environment where customer needs are going unheard and unaccommodated.
Inability to analyze customer data
Analytics and the need for organizations to be able to effectively segment and then market to the various differing bases that make up an overall customer base is essential in creating a personalized customer experience.
81% of companies in a survey by Dimension Data say that the ability to provide a great customer experience is a key difference between retaining a customer and them taking their business elsewhere.
Businesses are increasingly seeing the value in being able to market to different segments of their audience.
Customers today have far greater expectation as far as CX in concerned, and companies have to have the means to meet their expectations.
Over three-quarters (76%) of customers expect companies to have an understanding of what they want and to tailor their service accordingly.
What Should Organizations Do to Improve Their Customer Experience?
The key for manufacturers looking to improve their customer experiences is to implement the necessary technologies to tackle the pain points we’ve spoken about in order to service customers more effectively.
To integrate data infrastructure more effectively, organizations should consider adopting cloud systems—centered around an enterprise resource planning application (ERP)—and the relevant modules needed for their business functions.
Not only does this allow for better integration, as streams of data are centralized and accessible to stakeholders—removing silos—but cloud systems are scalable.
Scalability is important for modern companies of all sizes, not least because the overheads needed are far smaller for the necessary server and hardware required to power the apps and data, but it also benefits by not becoming outdated and obsolete as new hardware requirements arise.
This becomes a more important consideration as volumes of data increase with each passing year.
A customer relationship management module in an enterprise-wide ERP system is vitally important if an organization wants to establish a better feedback loop in order to improve their product.
Analytics platforms, like Microsoft’s PowerBI, for example, can be integrated into the ERP and data flows can be created so that the relevant data and information is sent to a custom dashboard.
This can be used to spot opportunities for a better customer experience. For example, a manufacturer can pull data regarding customer behavior along every touchpoint in the customer journey, and then use that information to provide a more customized experience that better satisfies their needs, depending on what products they favor, their locale, and other factors that can be used to provide better personalization.
By taking this three-solution approach to digital innovation, manufacturing organizations can improve their approach with regards to how they can adequately understand and remedy customer needs, thereby improving the customer experience.
As more companies today compete on the basis of being able to provide personalized experiences and respond effectively to feedback through data analysis, it’s important for manufacturers to respond by adopting the technologies necessary to facilitate this.
A cloud ERP system with a CRM module and data analytics platform are the best ways to effectively leverage customer data for manufacturers.
If you are a manufacturer considering digital transformation of your operations, head over to our Digital Innovation service page and discover how Impact can implement the solutions you need to get your CX to where it needs to be.