Digital transformation in the manufacturing industry has progressed at a fast pace in recent years. Among other areas, decision-makers have invested heavily in automation and big data technologies to enhance operational efficiency and supply chain visibility.
Now, there is a new mountain facing manufacturers: digital customer experience. According to a global survey of manufacturing industry leaders by Gartner and Valtech, 91% are either aware of the need to improve, or are already implementing change in customer experience (CX). But with this fast-paced race to transform comes a variety of issues.
Challenge One: Rising Costs
Since 1997, the number of manufacturing firms and plants in the U.S. has declined by approximately 25%. This can be attributed to a myriad of factors — chiefly, competition from overseas, and the outsourcing of production to less expensive countries.
Rising costs in all areas remain a major concern for U.S. manufacturers in their battle for survival, and to keep up with demand. In fact, according to the above survey of industry leaders, rising operational costs are the most significant threat to business success in transformation projects over the next year, with 79% of respondents citing this as a concern.
With margins tighter than ever, it’s tempting for manufacturers to cut back on costly digital transformation projects — particularly in areas like CX, which are sometimes incorrectly labeled as “fluffy” or nice-to-haves. However, if digital transformation is done right (pinned to demonstrable ROI), the gains should far outstrip any initial investment required. It’s understandable that companies are afraid of sinking a lot of money on a large transformation without anything to show for it. But it’s possible to demonstrate ROI incrementally, first with minor improvements to the experience.
Challenge Two: Siloed Data
In terms of technological obstacles, the greatest threat is a lack of integrated martech solutions — the software marketers use to optimize their marketing efforts and achieve their objectives. This results in data silos, with data stored in a stand-alone system, and often incompatible with other data sets.
For manufacturers, siloed data creates barriers for communication and decision-making, forcing people and data to stay within specific teams, units, or divisions. It can affect business operations in many ways, including:
These issues can prevent manufacturers from undergoing any meaningful CX digital transformation. As a result, it’s crucial to integrate effective data-sharing processes and technology before embarking on improving customer experience.
Challenge Three: Securing Buy-in from the C-Suite
A whopping 72% of manufacturing leaders today claim to be focused on increasing their digital sales. As a result, martech stacks are a key industry investment — yet most C-Suites still don’t see them as important. This is a disconnect because you can’t have one without the other.
To be successful with online sales and customer experience, manufacturers must have the right tech stack. This includes a customer relationship management (CRM) solution to track clients and an e-commerce transactional platform. Tightly integrated systems help avoid time-consuming manual tasks and inconsistent data. Therefore, receiving buy-in from the C-Suite to prioritize building effective martech stacks is essential.
Where do Manufacturers Go From Here?
Constant supply chain disruptions, global crises, and perpetual cycles of inflation and recession have taught manufacturers that building resilience is key to future-proofing their business. Resilience requires buy-in from the top, and the implementation of clear and widely communicated processes and roles to support change. At the same time, manufacturers are facing increased pressure when it comes to end-to-end experiences and retaining loyal customers. B2B customers now expect the level of personalization and differentiation that consumer-facing businesses provide.
The question then becomes, where should manufacturers start?
Solution #1: Make it a Companywide Agenda
If last year was one of digital investment, this year is one of consolidation and improvement. Manufacturers want to make the most of digital solutions available to them now while still providing excellent customer experience. To achieve this, it's essential to have a well-communicated strategy and clear objectives so that all departments — including IT, marketing, sales, and after-sales — are working towards the same goal. Alignment will enable manufacturers to better manage budgets, get ahead of the curve, and expand their value-added and digital offerings.
This needs to start from the top. A C-suite-led initiative followed by company-wide alignment is the surest way to ensure digital transformation is best supported — with both employees and customers in mind.
Solution #2: Lay the Groundwork
As with all projects, the planning stage is a core component of successful digital transformation. Manufacturers should prioritize building a complete and detailed roadmap before moving forward with a digital initiative. This entails defining desired outcomes and key steps upfront, and ensuring there is the right talent and required resources to support the transformation.
Solution #3: Invest in the Right Tools
They say a bad workman always blames his tools. But with digital transformation, it’s impossible to achieve great results with a poor toolkit. Knowing how to invest in the right tech stack that can grow with you is crucial. It’s also important to factor in solutions powered by artificial intelligence (AI) and connected by the internet of things (IoT) to enable remote diagnosis, virtual assistance, predictive maintenance, and others. All of these are ways to keep manufacturers moving forward in the digital-first world.
Building an integrated CX with technology on the backend provides an interface for the end user and insights that not only enable you to better cater to customer needs, but also anticipate them. This further improves the customer experience — which should always be the ultimate goal.
Charles Desjardins is EVP & managing director of commerce, North America at Valtech
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