five customer experience trends to watch for in 2021

Five Customer Experience Trends to Watch for in 2021

Welcome to M4 Communications’ Five Customer Experience Trends to Watch for in 2021.

Before we dive into what’s in store for this year, let’s take a look at the state of Customer Experience.

If we were at the beginning of 2020, no one could have predicted how upside-down, sideways, diagonal our lives would become at the end of 2020.

The Current State of Customer Experience

M4 Comm Five Customer Experience Trends to Watch For in 2021

How many times did this happen to you in 2020? You called a company and after you went through excessive hold times to reach someone, you were faced with bad service and higher than normal prices and you felt it was you, the customer, who was to blame for the company’s woes?

Thanks to the pandemic, everything we knew about business and CX was thrown into a tailspin.

In terms of the battle of brands, there were losers and there were winners in 2020.

It appears that the winners had four things in common.

They had a solid digital presence or could create one quickly.

Let’s face it, if you didn’t have the means to provide online e-commerce, you were in a world of hurt.

Those who did benefitted big time. According to Digital Commerce 360, consumers spent $861.12B online with U.S. merchants in 2020, up 44.0 percent year over year. That’s the highest annual U.S. ecommerce growth in at least two decades. It’s also nearly triple the 15.1 percent jump in 2019.

Digital Commerce 360 also estimated that COVID-19-related boosts in online shopping resulted in an additional $174.87B in ecommerce revenue in 2020. If it weren’t for the increase in online sales from the pandemic, the $861.12 billion in ecommerce sales wouldn’t have been reached until 2022.

Looking at the UK, according to the Office of National Statistics (ONS), as of November 2020, thanks to the pandemic, online sales grew by 157.2 percent and 124.7 percent, in department stores and household good stores, respectively, the two areas with the highest growth, year over year.

They were agile enough to respond to customers’ changing needs.

Only having a digital presence was not enough.

Brands who enjoyed 2020 success engaged consumers through purposeful content that resonated. They offered easy-to-navigate online experiences. These brands revved up their digital transformation initiatives through use of technologies like AI, VR/AR/mixed reality, IoT, and predictive analytics to predict customer preferences and enhance experiences. They enabled more personalization and automated self-service. And they created communities and used other means to further engage their customers.

Responsiveness is a top concern for customers. In fact, Zendesk, in its Customer Experience Trends 2021 report, found 65 percent of customers want to buy from companies that offer quick and easy online transactions.

They humanized interacting with a brand.

In other words, brands showed more empathy, they became more interested in customers and were curious about them, and spent more time with customers ensuring they had a good experience.

According to Pindrop, median contact center call duration was about a minute and a half pre-COVID.   That number has doubled to three minutes as a result of volume and capacity and has continued to stay at that level post the peak COVID period. It might appear that extended call durations may create customer aggravation and worsening experiences, but if the time is maximized in the right way, it can improve experiences through showing more empathy about the customer’s plight and collaborating on ways to resolve issues.

Brands who were transparent earned their customers’ trust.

A universal truth that we can all agree on is customer trust is at an all-time low.

More than three-fourths of customers care deeply about transparency. According to a study a few years ago, almost 95 percent of customers are more likely to remain loyal to a brand that is transparent.

Those brands that communicated quickly and honestly, and enabled positive emotional dialogs between customer and brand, were heroes.

So, what was the state of CX in 2020?

There are a couple of things I noticed.

First, the declining customer trust has been a big worry. And a lot hinges on the fact that companies have lost their humanity. Customers tend to distrust brands when they aren’t transparent, when they don’t care about customers, when they don’t appreciate customers, when customers have inconsistent experiences, when brands overpromise and underdeliver.

According to strategy+business, “Even before this crisis, PwC research showed that 59 percent of global consumers surveyed felt companies had lost touch with the human element of customer experience, and 75 percent of the customers surveyed preferred to interact with a human versus an automated machine. And now, people might be struggling to navigate the many friction points of the “new normal”and need a human touch even more.”

A brand’s humanity matters even more now.

Second, pre-pandemic, CX, in general, was drifting from stagnation to retreat. We discussed in our 2020 trends post that CX maturity has been slipping and we needed to make some bold moves. Brands need to be steps-ahead of customers to understand expectations and predict behaviors so they can proactively serve them. They also need to take deep dives into the customer and redesign journeys. They need to re-engineer customer feedback loops. And they must ensure they are operationalizing customer insights to drive business growth.

I view 2020 as the Year of Empathy.

Many companies enhanced their empathy. Others found their empathy. Still others didn’t show empathy at all.

Empathy works.

The thing about empathy though, it must be engrained in everything a company does. It must be a mindset. It must be consistent.

If the entire global corporate landscape did this, could you imagine the huge jumps in customer trust that would happen because of it?

As we come out of the pandemic soon, there are things that we can build on that we started in 2020.

Let’s take a look at the five customer experience trends to watch for in 2021.

Five Customer Experience Trends to Watch for in 2021

These five customer experience trends to watch for in 2021 can help brands drive customer experience and growth as we come out of the pandemic and into a new normal.

CX Trend 1: Brands will Invest in Employee Experience and Employee Engagement

In all things employee experience and employee engagement, Gallup is usually the first resource I turn to.

Gallup found that in early May 2020 the percentage of “engaged” workers in the U.S. — those who are highly involved in, enthusiastic about and committed to their work and workplace — reached 38 percent. At the time, the metric was at an all-time high, since Gallup started tracking it in 2000.

While this jump was considered good, it’s important to note that Gallup found that through the pandemic, employee wellbeing hit a twelve-year low.

How is employee engagement climbing when wellbeing is crashing during the pandemic? Isn’t there a positive correlation between employee engagement and employee wellbeing?

Gallup suggested three possibilities.

First, employer response is improving. Employers have taken the following actions: having a clear plan of action, preparing employees to do work in a new context, supervisors keeping employees informed, organizations caring more about employees’ wellbeing (and also including them in wellbeing discussions and activities), and practicing social distancing.

Second, the employment base is smaller thanks to pandemic-related unemployment.

Third, employees feel fortunate to be working. They may be feeling more appreciative especially considering the engagement item Gallup found most improved was:  I have the materials and equipment I need to do my work right. 

However, Gallup found in June 2020 that employee engagement dropped to 31%.

Factors contributing to this drop included social unrest from the BLM demonstrations, pandemic, unemployment, upcoming political elections, and economic uncertainty.

Three Gallup measures of employee engagement were taken in 2020 averaging to a 36 percent employee engagement in 2020.

In June 2020, businesses started to open up again and even though employees felt communication by their supervisors was on the rise up to this point, employees noted that they weren’t being communicated with as much, which led to them not being as prepared to do their work.

I have been concerned that businesses may act in one way during the pandemic, but resort to old ways post-pandemic. This inconsistency negatively affects employee and customer trust.

Unclear and inconsistent communication from leadership greatly strains employee engagement.

Employee engagement must start from the top.

Leaders must focus on the areas that drive employee engagement – giving employees the tools they need to do their jobs, communicating with employees, including employees in activities, asking for and implementing employee feedback, and helping employees develop.

This also means giving supervisors the tools they need and to help them grow.

In addition, just as companies must focus on the customer journey, and optimize it, so should they focus on the employee journey, and optimize it.

CX Trend 2: Brands Will Shift Focus from CX Innovation to CX Renovation

I’m a big fan of Forrester and its insights. We tend to align on most things CX. In it’s Predictions 2021, Forrester discusses that 2021 will be the year to renovate, not just decorate.

I suggest it’s time to shift from innovation to renovation.

Sometimes when we innovate, we try to get all the bells and whistles on something that we lose our way in knowing what the true purpose of doing so is.

Companies have lost their way. Numerous studies show an increasing amount of customers don’t feel they are cared about. This seems to correlate well with the eroding customer trust happening. And it is getting worse. That’s why it’s important for organizations to get back to CX basics – know your customer, what they need and want, deliver on it (proactively), and keep improving on it.

Because of this and the pandemic totally disrupting our version of normal, we’ve had to create a new normal. So, we need to rethink CX and we have to start with questioning our reasoning for CX.

-What is the purpose we are doing CX? What is our why?

-How will this benefit our customers?

Knowing the why’s we can then address the how’s.

-How do we redefine CX for our business? What is working? What isn’t?

-How have our customers’ needs and expectations changed?

-Is our culture equipped to drive CX so we can grow?

-Are our most important assets, our employees, being onboarded in the best way possible, cared for, and developed so they are engaged?

-Have we championed CX enough so our employees understand it and can help us drive it?

-Are we aligned up, down, and across the organization to serve our customers?

-Do we know our customers and what makes them tick?

-Are our customer journeys accurate? How can we optimize them?

-Do we have a closed feedback loop? If we do, is it working?

-How do we improve our VoC program?

-Are we following the right metrics that will help us serve our customers better?

-How are we operationalizing our customer insights?

-Have we implemented insights that we’ve learned so we are improving the customer experience?

-Are we helping our customers to be more successful? Are we inching closer to our North Star?

This leads to the two biggest questions we should ask — How do we help our customers so we build trust? How can we maintain that trust?

Once we determine the how’s, we can decide on and implement technologies and applications to help predict behaviors, manage CX, improve personalization, engage our customers, etc. And then we can work on ensuring our customers are receiving the consistent experiences they want.

Technology should never be first. Technology supports the purpose.

The focus on rethinking CX aligns with Forrester’s prediction that companies will reduce their CX technology spend.

Companies will re-evaluate their why of CX, what drives customer value, and the tools that will help them get there.

Also, when brands can focus on customer value as a key driver, they improve customer trust.

CX Trend 3: The CMO Will Become the Master Aligner

In my 2020 and my 2019 trends posts, I opined that the CMO had to collaborate with other teams and to shift from outbound methods to more customer-led ones around the customer journey in an effort to marry CX and marketing initiatives.

The CMO’s focus must be about driving customer value.

They need to understand that each part of the customer journey must be focused around the customer. This is so decisions can be made to strengthen customer value.

The CMO must become customer-centric and align teams around the customer journey.

No longer is customer acquisition and customer retention separate. Marketing is fluid. And everything is interconnected. Thus, the single most important metric to the CMO must be customer lifetime value.

As an example, AT&T is currently running ads that specifically state that a particular promotion is for both new and existing customers. In the past, promotions were for new customers only. This is a total paradigm shift in marketing.

Brands have to give consumers a reason to come and a reason to stay.

Everything comes down to customer value.

The CMO must be able to understand what drives customer value, help ensure marketing initiatives align to customer value, that marketing and CX initiatives align, that initiatives and data align, and that customers perceive value at every step of the journey.

I foresee two things that I have been hoping for – (1) that customer acquisition and customer retention budgets will begin to balance (in the past, budgets were heavily in favor of acquisition) and (2) marketing teams, through the CMO being customer-centric and aligning CX and marketing initiatives, will help create a consistent, omnichannel customer experience.

CX Trend 4: Brands Will Find Their Humanity

Gallup conducted a survey last year and found that the top things employees need at a time of crisis are trust, compassion, stability, and hope.

The same applies to customers.

Companies who can show their humanity by being proactive with customers and reaching out to them to let them know they are cared for helps the customers’ wellbeing as well as their relationship with the brand. Gallup found that customers make 70 percent of their purchasing decisions based on emotion. If you can elicit a positive emotional connection with your customers in your interactions with them, that drives up customer loyalty.

I regularly advise companies call at least one customer each day and ask two questions: (1) How are you doing today? and (2) what is the one thing that we could be doing to help you be more successful? This activity takes no more than 10-15 minutes. You’ll learn new insights and you will have improved the customer’s experience.

Another area is the role of live agents vs. automation.

While a few years ago, Salesforce found that 59 percent of consumers and 71 percent of business buyers said that self-service availability positively affects brand loyalty, the Northridge Group found that more than half of customers have difficulty with web-based portals.

And while companies want to reduce customer support costs, and chatbots might be the most preferable digital form of communication, the lack of chatbot responsiveness, thanks to a slowdown of conversational AI ability, is frustrating customers.

According to a recent Drift and Survey Monkey report, customers still like engaging with a live agent the best.

Companies that poll their customers to find out the items they wish to use self-service automation for and those they wish to use a live agent for provides two wins: (1) you are proactively asking your customers for feedback and (2) you are enhancing their experience. Of course, be sure to implement the feedback you receive.

CX Trend 5: Contact Centers Will Be More Integrated and Proactive

We’re going to see a much more unified contact center around the customer journey. This is because we’re going to see more alignment between customer metrics and business operational metrics.

For CX to prove its value and for organizations to grow, all teams must align to the CX vision. The contact center, a key channel, is a big part of this alignment.

For a long time now, it seems the contact center has been a silo and when that happens you have a reactive contact center. In this scenario, the contact center gets a request and they act/don’t act on it, depending on what the culture is. It’s likely the contact center may not be able to resolve a customer’s issue(s) on the first go, which is not to the customer’s expectations.

The result? The customer receives an inconsistent experience, which leads to customer distrust, which leads to them switching to a competitor.

The trend is to loop the contact center into the customer journey and it becomes a key participant in delivering a strong customer experience to customers.

The contact center is perhaps the first interaction a customer has with a brand.

It isn’t enough to include the contact center only in the customer journey. The contact center must be included in all tech – conversational AI, engagement, omnichannel, etc.; tech to differentiate on how services are delivered – be it self-service or that which requires a live agent; in metrics; and in the customer journey.

Alignment to the customer only works when every team is rowing in the same direction, and that includes the contact center.

Ultimately, the trend is for the contact center to transform from a reactive to a proactive to a predictive unit. Understanding the customer and his/her needs before an issue arises will create a truly profitable contact center.

Did these align with what your five customer experience trends to watch for in 2021 are?

What are your five customer experience trends to watch for in 2021? 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.

And for any of you who want to learn more about CX, join #CXChat on Twitter every Wednesday at 11am PT/2pm ET/7pm GMT.

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