Welcome to M4 Communications’ Five Customer Experience Trends to Drive Value in 2023.
Before we dive into this year’s trends, let’s review the state of Customer Experience from last year.
State of CX in 2022
2022 was all about deterioration of customer trust.
There was a stat a few years ago that stated 80% of businesses believed they provided “superior” customer service. But only 8% of customers believed they were actually receiving this level of service.
A similar gap exists in customer trust. PwC’s 2022 Consumer Intelligence Series Survey on Trust showed a significant gap in trust between businesses and their customers. 87% of business leaders believed consumers highly trusted their company, whereas 30% of customers highly trusted companies.
We previously discussed that customer trust was declining.
There are a number of factors that drive customer trust.
Good communication is key to building and nurturing trustworthy relationships with customers.
Customers need to feel that interactions are genuine and resonate with them, the brand is actively listening, and the communications are frequent enough to inform them on important matters in a timely manner.
There are three keys to a great customer experience – customers perceive value in interacting with the brand, it’s easy to engage with the brand, and customers feel positive interacting with the brand. Every customer communication should embed these three keys.
Customers should feel that communications are reliable. They should also have confidence in what they tell the brand is being listened to and acted on.
Data security is also key to trust. Customers should feel that all of their data that they provide to the brand is secure at all times.
Trust in digital is already on decline.
In addition, a recent Permutive survey conducted by The Harris Poll found that 75% of US and UK consumers are not comfortable purchasing from a brand with poor personal data ethics. They’re concerned about their data privacy, what’s being tracked online, and want choices on the data they share with brands.
Customers should be able to personalize their data settings. In addition, they should be able to refuse data collection and ask for data to be given to them and/or removed. Re-asking for permission at least once a year to use data is a good way to go.
Transparency is vital to customer trust.
Brands should be transparent in general, not just when there is a crisis, like a data breach.
According to Label Insight, 94% of consumers said they’d be more loyal to brands that offered transparency.
Be crystal-clear in providing valid reasons on why you’re collecting data and how it will be used, be honest on your pricing policies, communicate your values and how you’re living and breathing them, communicate how you’re delivering on your brand promise, etc.
Social proof plays a big role in customer trust.
A strong company reputation drives customer trust. Social media comments, third party reviews, and employee comments on sites like Glassdoor all play a factor in whether customers will continue to do business with you or whether prospects will want to do business with you.
Taking Action is the ultimate trust test for customers. Brands must provide a consistent, reliable experience that customers would want to continue to do business with them.
Are you providing opportunities for customers to give feedback? Are you listening to what customers are telling you? What are you doing with the feedback? Are you responding to customer inquiries in a timely manner and fixing them that meets customer needs and expectations?
Sadly, customer satisfaction is in somewhat of a tailspin these days.
It doesn’t help that customer wait times to get a representative – regardless of communications channel – to assist are getting worse. ACSI found that wait times are among the top drivers of customer satisfaction. Customers who have to wait longer than expected are 18% less satisfied with their overall experience.
MIT also found that that people who experience long wait times are less satisfied with the overall experience. It found that customers who had to wait longer than 10 minutes for service were less likely to return to the business or recommend it to others. They also were more likely to leave negative reviews online.
There seems to be a rise in customer complaints and issues.
Zendesk found, in its CX Trends 2023 study, that almost half of respondents said their frustrations with customer support have grown in the past year.
A lot of this has to do with companies forgetting about customer-first and focusing on profits-first. And it has only become worse as inflation and economic uncertainty gets worse.
Inflation has been growing from the fallout from the pandemic, shortages in goods and materials thanks to supply chain issues, rising energy costs, etc.
Companies should be focused on maximizing profits and minimizing costs. But there is an order. When you focus on customers, you should focus on value and do things in the best interests of customers and the business. This is what is discussed in MIT Sloan Management Review’s article, To Cut Costs, Know Your Customer.
It states that brands should pursue cost reduction with a customer focus in three ways: by reducing waste to deliver more compelling customer value, by improving the effectiveness of customer acquisition and retention, and by narrowing focus to those strategic initiatives best aligned with customer value.
This is what customer-first is all about.
It’s usually easy to spot the difference between a customer-centric company and one that thinks it is. It comes down to where they put the focus. Is it on customers or is it on profits?
If it’s the latter, then they’re not customer-centric.
The ultimate verdict on CX came at the end of last year from TechCrunch in its article, The year customer experience died.
It’s not a verdict on the failings of CX. It’s more a verdict on the success or failure of companies who don’t start focusing on customer experience. TechCrunch noted that due to a poor economy and lack of employees, 2022 was a year of poor customer service. And this resulted in poor experiences. The two are joined at the hip.
Products and services are commoditized so much so that the only differentiator is customer experience. Brands will ultimately be judged on how they rise to the occasion when things go wrong and customers need you. If you fail, customers will respond with the purse, they will leave. And, through word of mouth, you’ll quickly develop a bad reputation.
Zendesk found that more than 60% of customers will switch to a competitor after one bad experience. In the case of more than one bad experience, 80% will leave.
To survive and thrive, companies must change.
They must make customer experience a key pillar of its overall organizational strategy. That means aligning the organization to the CX vision, ensuring its employees have the tools to deliver on a consistent, reliable experience that customers expect, and be in continuous improvement mode to optimize CX.
So what’s in store for 2023? Where can we move the needle to drive customer experience deeper into organizations to create impact?
Let’s take a look at the five customer experience trends to drive value in 2023.
Five Customer Experience Trends to Drive Value for in 2023
These five customer experience trends to drive value in 2023 can help brands drive customer lifetime value and growth.
CX Trend 1: CX teams must prove the value of CX for the business
Widespread inflation and economic uncertainty are running high in the UK and the US. When inflation is high, consumers’ disposable incomes are hallowed ground. They spend money only on items they place the highest value, those essential items. Everything else, the non-essentials, consumers are trimming their budgets, or worse, churning.
It’s not only the customers who are re-thinking costs. So are the organizations.
Because brands have to work extra hard to get a customer’s share of wallet, they are analyzing the programs that are creating the most value. Therefore, it’s vital that CX teams ensure they and their CX programs are delivering value and continuously improving to deliver even more value.
What can CX teams do?
They must show, through data, how their CX programs are impacting the organisations’ bottom line. This “social proof” will influence more employees on the value of CX and motivate them to be accountable to CX. As CX matures within an organization, teams will align on the CX vision.
As a one-organisation accountability continues, that will drive even more value, enabling the organization to invest more in tools and technologies to develop deeper customer relationships to understand customer wants and needs, collect and take action on customer feedback, and migrate data to drive a holistic customer view.
The result is improved customer lifetime value and growth.
CX Trend 2: The Contact Center Becomes a Revenue Channel
Some organizations treat the contact center as an island. They put a a barrier between the contact center and the rest of the organization. And create a silo in the process.
Also, this impacts employee morale, the ability to align the organization to the CX vision, and more importantly, customer engagement and the overall CX the organization delivers to customers.
In many instances, it’s up to the contact center team to make themselves known to the rest of the organiation and the value the contact center provides.
The best way is for contact center management and contact center agents to expand their circle of influence.
This is all about developing relationships, not just with customer-facing teams, but other teams as well.
When contact center employees build bridges with fellow employees, these co-workers see the tremendous value the contact center provides. One important place to start is with whoever is accountable for the overall customer experience vision, building and managing journey maps, and creating service blueprints.
For instance, when the contact center is included in the journey map, friction points and opportunities for improvement can be identified so as to optimize the value the contact center is providing.
This is key because many times, it is the contact center agent, who is initially the first contact a customer has. They are also the first contact to drive brand value and the relationship. Connecting with the CX team gets the contact center team in the room and on the journey map. As a result, it helps to align all teams to create a consistent CX.
The contact center is really the heartbeat of the brand.
Many times it is the contact center that is the first interaction a customer has with the brand.
It’s where relationships start, customer lifetime value is built, and customer advocates are made.
The contact center is also responsible for closing initial sales and incremental sales, like cross-sales and upsells. It also is the place that retains revenues from customers who might otherwise churn.
The contact center is becoming much more innovative through such tools as conversational AI and natural language processing (NLP) in sentiment analysis to take deep dives into relationships to be more proactive and predictive.
In addition, the contact center helps to determine how services are delivered – whether it be self-service or that which requires a live agent.
CX Trend 3: The Time is Now for Companies to Embrace Conversational AI
A recent Gartner report suggests that the contact center industry could save up to $80B in labor costs per year by 2026 and $240B by 2031 by replacing many of the tasks live agents do with AI chatbots.
It predicts that one in 10 agent interactions will be automated by 2026.
Gartner notes that there are roughly 17M contact center agents all over the world. 95% of costs associated with a running a contact center are due to staffing. Organizations are struggling to recruit and reduce costs.
Conversational AI can help agents to be more effective and add value, while improving the customer experience.
Gartner notes that using conversational AI could reduce up to a third of the interaction time that it would normally take a live agent.
AI is growing exponentially. IDC forecasts worldwide AI spending to surpass $300B by 2026.
There are relatively limited practical applications for conversational AI to make a considerable impact today.
The lack of use cases is, per Zendesk, a result of companies just beginning to tap into AI’s vast potential. It noted that more than 60% of companies say they are behind in the use of AI. And they describe their organization’s plans as being ad hoc rather than strategic.
Although customer dissatisfaction levels with chatbots continue to drop, they view bots are good for simple issues, but do expect AI to evolve to more complex tasks and provide the same level of service as a live agent.
According to Zendesk, two-thirds of leaders expect to increase AI/bot spending over the next year.
CX Trend 4: Personalization Will Occur Through the CX lens
Personalization has been around for a long time. But, it hasn’t been as impactful as it could be because it has focused on user segments.
Instead, focus on user personas, where you can get a deeper understanding of goals and motivations that drive behaviors.
Prioritize personalization to what customers want.
There have been disconnects between what businesses say they are delivering and what customers say they are receiving. For example, Twilio found that even though 85% of businesses said they were offering personalized experiences, only 60% of consumers thought that was the case.
Are companies asking their customers what they want? Or are they still taking that inside-out approach believing that they know the personalization their customers want?
Companies need look to customer feedback they are receiving as to what personalization they should deliver to customers.
They need to find out what customers want and give it to them. Twilio found that 70% of consumers appreciate personalization as long as it is what they shared with the company directly. Consumers want personalization as long as it is what they communicated they want.
To be able to be successful in personalization, brands must have a clearly defined personalization strategy.
Key areas of focus should include personalized touchpoints, preferences on self-service vs. live agent tasks, preferences how customer data is used, the types of content they want to receive, etc.
CX Trend 5: Organizations will rethink their tech stack for value
Economic uncertainty has led organizations to look at all areas of their operations to identify waste and the key drivers that result in achieving desired business outcomes.
Therefore, the first place to look for inefficiencies and where improvements can be made to innovate and differentiate is within an organization’s infrastructure.
The CIO and CX leader are looking for the same thing, value. Also, they want to determine what will create the biggest impact on achieving desired business outcomes.
Each must focus on leveraging data to make the best decisions to ensure customers stay, increase customer lifetime value, and drive growth.
The CIO and CX leader must collaborate and communicate regularly. For example, when they are in lock step, they can unite on a 360-degree view of the customer. And they will align on what is necessary to drive CX.
This collaboration creates a balance. CIOs help CX leaders by deploying real-time personalization and analytics and providing a holistic data view. CX leaders help CIOs by helping them understand tools that are appropriate for different customer segments and the touchpoints that drive maximum customer engagement.
Therefore, working together, the CIO and CX leader will help maximize technology value to CX and the organization.
Were these five customer experience trends to drive value in 2023 the ones on your list?
What are your five customer experience trends to drive value in 2023? Let us know in the comments.
Have a question on how your company can be more customer-centric, or how to start or optimize your existing CX program? Contact us.