This article was originally published on Intellyx.com.

When I first began focusing on digital transformation, I immediately understood it to be about more than merely a new way to use technology. I realized then that it had very little to do with technology at all and was, instead, about a much more fundamental business transformation.

Most importantly, I saw that it was about a shift in power away from industrial organizations that controlled the terms of engagement to a period in which customers had all the power of choice and control. Implicit in this power shift was the transformation of how organizations created differentiated business value.

Whereas in the industrial age organizations created value through the optimization of the supply chain, in this new era they would do so through the creation of differentiated experiences, which are increasingly digital.

It was, in fact, the realization of the experience economy that B. Joseph Pine II and James H. Gilmore described in their seminal, 1998 Harvard Business Review article. Today, organizations can (and are) making this experience economy a reality.

As this transition takes root, however, customers’ demands are changing and growing. They are now coming to expect what I call the ambient experience. And the future will belong to those that can deliver it.

AN AMBIENT EXPERIENCE?

Talking about the customer (or employee) experience is not particularly new. Ever since Pine and Gilmore’s article, the idea of curating a customer experience became a discussion topic in the executive suites of most major organizations.

Organizations have focused most of their discussions, however, on the buying process — and they spent most of their energy on the digital buying experience. Only more recently, have enterprise leaders begun to understand that the digital experience (for both customers and employees) is about more than a transaction and that it actually spans the entire lifecycle of engagement.

This need to optimize the experience throughout the engagement lifecycle is particularly true as organizations transition to selling more things ‘as-a-service’ rather than through a single, one-time transaction.

Increasingly, however, consumers, business customers, and employees are no longer satisfied with just a good experience. Instead, we all now want an experience that is so natural and automatic that it almost ceases to be distinguishable as a unique event.

We have come to expect — for better or worse — that organizations and their systems know us. As a result, we assume that things will just happen, when and as they should, without our explicit involvement. More importantly, we want those interactions to occur in a way that is both unique to us, and which cater to our needs or desires at that moment in time.

We now want our experience with an organization to be ambient.

WHAT IT’S GOING TO TAKE

You can blame consumer technology companies like Google, Facebook, and Apple that enjoy an intimate purview into the daily activities and interactions of their customers for both the level of expectation — and for the risk of backlash that comes with delivering these types of ambient experiences poorly.

Creating these types of natural, continuous, and automatic experiences is no easy task. First, it takes gobs of data. More importantly, it demands detailed data on the activities, preferences, and desires of your customers — something that most organizations have not traditionally collected.

Beyond raw data, however, creating these types of natural and automatic experiences requires that organizations apply intelligence to the data to develop predictive models of behaviors, intentions, and desires — and then leverage that knowledge to create these types of customized and unique experiences that just seem to happen.

As we have seen through the travails of tech companies, however, this is a treacherous and slippery slope. Despite all the hand-wringing about privacy and the abuse of personal data, the reality is that most consumers and business customers now expect these types of intuitive, personalized experiences — but they want them on their terms.

As a result, it is insanely easy for organizations to step into a steaming pile of crap either through the data they use, how they use it, the models they apply to it, or the actions they take as a result of these models.

Organizations are increasingly finding themselves between the proverbial rock and a hard spot with customers expecting an ambient experience, but also prepared to instantly and loudly rebuff any perceived overreach or misstep.

THE KEY INGREDIENT: RELATIONSHIP

While most every organization recognizes the potential windfall they may realize if they get this right, the likely price of a disastrous and very public breach of customer confidence has left many organizations settling for mundane and simplistic improvements to the digital experience.

Part of the problem, however, is the approach that organizations have thus far taken as they attempt to create these more intuitive and automatic experiences. Most organizations still look at data-driven, intelligence-powered interactions predominately as a means to sell more stuff to their customers.

While increased revenue is almost always a by-product, a sell-first attitude is where things begin to go very wrong for an enterprise. By looking at the creation of an ambient experience through a sell-first prism, the application of the technology will tend towards what customers will perceive as spying and manipulation.

Facebook’s constant challenges are Exhibit A.

There is, however, another healthier and mutually productive way to apply all of this new technology.

Rather than looking at the application of customer data and data-driven intelligence as merely a means to pull more heavily on a customer’s purse strings, the better (and mostly untrodden) path is to use it as a means to build a meaningful relationship through rich interactions and engagements.

The ultimate goal with this approach is not to sell more, but to serve better.

When approached in this manner, customers welcome the application of technology and willfully offer up more information as a means to better serve the mutual benefits of the relationship.

Moreover, organizations that take this approach sidestep the creepiness factor that is the first sure sign of trouble. Unsurprisingly, this relationship-centric approach is the critical element that makes an ambient experience work.

AMBIENT? OR SLEAZY?

At a recent event, a vendor demonstrated new technology that uses cameras and facial recognition technology to automatically identify a banking customer as they approach a banker’s desk.

Once identified, the system uses a combination of workflow automation and elements of artificial intelligence to bring up all relevant records associated with the customer and attempts to discern what services they may need so that the banker can be ready with possible solutions or answers.

Used as a means to improve and further the relationship between banker and customer, the transformative power of this technology is undeniable. It enables a customer to get their needs met more quickly and empowers the banker to spend less time on the computer looking up information and more time interacting with their customer.

It is the very definition of an ambient experience — one that just happens and, at least from a technology perspective, becomes almost invisible.

If, however, a bank were to use this technology to primarily identify new upsell opportunities (as I’ve seen demonstrated countless times in the last few months), then they will create a sleazy interaction that will leave the customer creeped out and running for the door.

THE INTELLYX TAKE

As we become more thoroughly entrenched in the digital era, organizations will have a stark choice to make: will they hold on to the sales and marketing vestiges of the industrial age or will they embrace the new drivers of the experience economy in which the customer experience throughout their journey with an organization is all that matters?

The days in which organizations can use the term digital transformation as mere code for technology upgrades or using technology to goose revenue at the cost of their customer relationships are coming to an end.

Today’s consumers and business customers alike are beginning to expect deep, intimate relationships in which they and their experience are the central player. And pretty soon, they will accept nothing less than these types of relationship-centric ambient experiences.

Copyright © Intellyx LLC. Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers. Image credit: XoMEoX.