Here in Florida it’s hurricane season, which brings to mind the awe- inspiring forces of nature. As meteorologists track every new tropical depression, Floridians prepare, hunker down or try to get out of the way.
In terms of sheer power, hurricanes remind me of the technological and socio-economic forces driving change in the way we live and do business. But while preparation is essential in both types of storms, in business we know we can’t hide. Truly, we’re much better off to embrace rather than try to escape the forces of digital transformation and generational shifts that are disrupting industries, the labor market and our world.
We see five overlapping forces that executives in all industries need to consider when developing strategies for managing business today and preparing for the future.
Over the past decade, three revolutions in technology have made our world more connected than ever before. The spread of broadband and the rise of the smartphone have turbo-charged the power of social networks, forever changing the way we live, work, share and create information.
Fueled by this hyper connectivity and unprecedented access to information, all of us know simultaneously about events within a matter of minutes. In this age of consciousness, we have greater awareness of what’s happening in every corner of the world. This brings both encouraging and challenging implications, as business and governments must protect sensitive and personal information, while being prepared to manage response and perceptions in lightning-quick order.
Affordable access to super computing through the cloud
The cost of computing power once put many business models out of reach, but the cloud has changed the equation by making advanced digital capabilities accessible, affordable and scalable. Speed, technology and fast access to meaningful information is more important than ever as digitization and big data will continue to bring disruption, increased competition and unprecedented opportunities to all industries.
Societal and demographic changes
Population growth is slowing in many developed countries including the US, which will have significant impacts on global economies. All regions will see an aging population, with impacts varying in different parts of the world. Millennials are now the largest generation in the workforce. These shifts make access to labor markets more challenging for all industries. With the dominance of millennials, there are new considerations when it comes to work and values, as this generation looks for more meaning in work and greater flexibility while being more inclined to make job changes.
The rise of digital employees and customers
Whether at work or in the marketplace, people now have an infinite array of choices. They are empowered. With all this connectivity, computing power and mobility, customer and employee expectations have changed dramatically in the digital world. All businesses must cater to employees and customers to a greater degree than before. When there are so many options — and people have such easy access to information on alternatives — loyalty is much harder to win and keep.
So what does all this mean for the customer experience (CX) industry? In many ways, these forces have created an “age of experience,” where the winners and losers in business will be determined by the experiences we provide our customers and employees.
Let’s explore how these strategic drivers are shaping the CX industry and what they mean for the future.
Adapting to the new “world of work.”
To maintain a healthy supply of talent amid the seismic shifts in the labor market, forward-looking companies are using more creative and progressive strategies to address the changes in geographic supply and employee values.
While basic customer care will become increasingly automated, humans will still be indispensable for providing advanced forms of advice. For example, the complex transactions and services such as billing plans, fraud protection, banking and IT support are driving up the number of minutes per customer interaction. With the increased complexity, the right talent, skills and training become essential to success. Among digital leaders, companies are prioritizing hiring talent with customer problem-solving, change management, communication and collaboration skills, over technology knowledge, according to George Westerman, an MIT researcher and co-author of Leading Digital.
Leading companies are getting ahead of these trends by deploying work-at-home strategies in the US and expanding their global footprint in markets where labor supply is strong. The advantage of being able to access an enormous talent pool filled with highly skilled people is a distinct business differentiator in a knowledge economy. We also find that digital innovation, cutting-edge training, and strong corporate social responsibility programs are increasingly important factors in attracting, engaging and retaining the best talent among millennials and all ages.
Applying the “Science of Service” to meet increasing customer expectations.
Google defines science as “a systemically organized body of knowledge on a particular subject.” In this context, the “Science of Service” relates to the immense amount of information that companies can collect about our customers, our operations and our own people, making it possible to systematically build better experiences for both our customers and employees.
To harness these insights across departments, companies will need to eliminate silos, provide access to advanced analytics and use this information to streamline their operational value chains. This requires architecting technology around customer journeys — instead of products, functions or lines of business — to enable the agility and responsiveness that customers demand.
In this way, leaders in customer service put the “Science of Service” to work in every area of their operations. This begins with hiring the right people and designing the most effective training and coaching. It continues with providing service delivery technology platforms that enable greater efficiency and flexibility across programs and geographically dispersed teams. Then it closes the loop by merging data and insights gathered through consumer activities across channels to gain a more comprehensive picture of individual customers and their preferences, leading to better targeting for sales and marketing content, ultimately generating significant gains in conversion rates and purchases.
Innovating to meet the needs of today’s digital customers and employees.
These days, you don’t need to be a millennial to be fully immersed in the digital world. Both customers and employees of all ages have come to expect lightning-quick service and systems that are simple, logical and frictionless. According to Harvard Business Review Analytic Services, as companies pursue digital transformation, it comes as no surprise that executives rank improving customer experience as the most important benefit they seek from their digital initiatives.
In the digital world, the new customer journey means experiences can easily begin on one device or channel and move to another. Companies need to be prepared to deliver service to customers through the channel of their choice, and be agile enough to join them as they take different paths in the moment. Customers expect you to know them, and they don’t want to repeat steps, because this requires more attention and time than they’re willing to spend.
To deliver this omnichannel experience, companies need to achieve greater data integration among disparate systems and organizational silos, as well as train agents to interact with customers on multiple channels.
This is an important part of using digital innovation to meet customer and employee expectations to make everything painless, personalized, proactive and productive — the four Ps of customer service coined by Forrester. I would add a fifth P for “protected,” to ensure that customer and employee data is secure from the many risks posed by our digital age. Here’s a quick look at strategies for meeting these needs. value chains. This requires architecting technology around customer journeys — instead of products, functions or lines of business — to enable the agility and responsiveness that customers demand.
Identify and understand major customer pain points by focusing on a customer-centric approach and mapping ways to eliminate the cause through people, process and technology strategies. Are long checkout lines a problem? At Walmart, you can scan items and pay with your smartphone. Can’t wait for your coffee? Starbucks lets you order and pay in advance so you can just grab your cup and go.
Use digital solutions to personalize and tailor customer interactions based on their purchases and preferences, as well as the issue at hand. We’re just seeing the tip of the iceberg from more creative approaches to personalization through augmented reality (AR) and artificial intelligence (AI). (More on that later.)
Increase productivity by finding the right balance between customer satisfaction and cost. Digital innovation combined with smart training and labor strategies delivers a reliable, efficient service experience that gets positive customer-satisfaction ratings at a cost that makes business sense.
Provide the proactive service that customers want by building a solid technology backbone supported by a clear and open communications strategy. For example, customers want full disclosure if there are issues and notification of available solutions. Even better, customers prefer companies to address issues behind the scenes, before they are even aware there’s a problem.
Ensure customer and employee data is protected at all times. Underpinning almost all these forces behind CX change is a need for customers to share more information about who they are, what they like, and their purchase history. This places an enormous responsibility on companies to manage sensitive data with great care. Companies need to construct multi-level protection by creating a security- first culture among all employees and within the talent- management structure, supported by smart technology measures. Moreover, these strategies must be effective in the office or wherever your employees are located, as work-at-home models become increasingly popular.
IManaging the convergence of marketing, sales and service.
In this age of connectivity, consciousness and experience, customer service is the new marketing. We see the impact of this even on major brands, as what starts out as a customer- service issue can instantly become a massive marketing problem.
With the convergence of marketing, sales and service, nine out of 10 marketing and brand executives now believe customer experience is the leading competitive differentiator. In fact, the consensus of industry analysts is that improving the CX experience ranks as today’s highest executive priority. As McKinsey & Company’s CEO guide to customer experience notes, “leading companies understand that they are in the customer-experience business … how an organization delivers for customers is beginning to be as important as what it delivers.”
This requires training your organization to “see the world through your customer’s eyes,” and rethinking functions to be customer-centric. In other words, focusing on your customer instead of your product, service or company.
In the process, you’ll find that the linear sales and marketing funnel — where the customer progresses from one step to the next — is no longer relevant. Today, customer journeys are circular, complex and unpredictable as consumers hop from one place to another, gathering information from both traditional and social media sources.
The interactions between customers and brands are more like a relationship. Not only do companies need advanced technology that connects every step so you can deliver the right message to the right person at the right time. You need the human connection that builds real relationships. You must empathize with customers, understand their frustrations and put their needs first.
These five forces are not only reshaping the customer experience, but they are forcing sweeping changes in the way companies are organized and operate. This kind of change isn’t easy, that’s for sure. But that’s what leaders do. We lead change.
Considering the digital transformation of the last decade, we can begin to imagine what surprises, delights, and challenges lay ahead. Keep a weather eye on the horizon. Guided by the right strategies, we’ll navigate through this whirlwind of change to the future of the customer-experience industry.
Improving CX in the age of the robot.
Simple transactions are rapidly becoming automated through self-service IVR, apps, chatbots and social media, allowing humans to focus on more complex issues. Alongside rapid advancements in artificial intelligence (AI) and augmented reality (AR), companies are leveraging these developments to improve customer experience.
As people are getting more comfortable using digital assistants like iPhone’s Siri and Amazon’s Alexa, new experiences through connected cars, homes and offices are rapidly evolving. In the area of AR, apps are helping customers create and simulate the designs and experiences they want and then buy what they like best.
Still, even in the age of the robot, there will always be a need for the human touch — especially as the world and products become more complex. In fact, we’re seeing how AI can be used to help customer service representatives improve their skills by delivering relevant information and coaching on the spot. Moreover, this technology will be essential for managing through the tightening labor markets in developed countries. As opposed to taking jobs away from humans, I believe digital transformation and cloud technologies will result in growing opportunities that may surpass the tech booms of previous decades.