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Future of Customer Service

Originally Published on
SummaryApr, 2018

More than ever, customer service is the defining characteristic of successful customer relationships. The Future of Customer Service digital report delves into the evolution of this competitive landscape, looking at the technologies redefining what’s possible and the challenges encountered in delivering high quality service

In this report

Making chatbots work for you

As the number of bots and virtual customer service agents grow, so does the frustration and the number of failed deployments. IFS-mplsystems outlines the four cornerstones of a successful implementation and how to make the chatbots work for you

Very much like the term hacking, our notion of software bots used to be a wholly negative thing. But, just as hacking became the new label to denote the actions of cool nerd hackers building our software-driven future, bots graduated from malevolent virus spewing botnets to become a new type of helpful bot designed to make our lives better. As a shortening of ‘software robot’, a bot is simply a chunk of code used to perform a functional service task, usually online.

Throughout this decade we have seen major technology vendors embrace the idea of helpful bots that can work to manage, channel and even clean the data inside our software systems. Using technologies that harness so-called Natural Language Understanding (NLU), we have subsequently been able to build bots that can disassemble and parse human-generated text into categorised semantic meaning. These are bots that can understand us and talk back. These are the chatbots.

Chatbot brain development

As the chatbot rapidly speeds through its adolescence, we (the humans) are dedicating ourselves to ensuring that these software brains are capable of learning. As we start to apply new layers of cognition and understanding to the chatbot’s talkback response mechanisms, we can then use chatbot technology at the core of our customer service processes to significantly improve customer experiences at all levels. Applied carefully, the chatbot is your new front line and it’s good news for the bottom line.

Applied carefully, the chatbot is your new front line and it’s good news for the bottom line

But Artificial Intelligence (AI) education for chatbots is no plug-and-play affair. We cannot simply flip an ON switch and expect these machines to learn. As the number of chatbot and virtual customer service agents grow, so do the number of failed projects and frustrated customers. Cast your mind back to the ‘hello caller, I think you said’ telephone-based speech recognition booking services that existed before the millennium. We can’t afford to let smart chatbots be that dumb.

Complex questions, smarter chatbots

Chatbots only communicate as a result of the information that we program them with at birth. Smarter AI chatbots only learn and train by exposure to the diversity of information in the data pool that they are exposed to. A shallow pool of similar data events creates a comparatively more narrow-minded chatbot.

Too many AI projects fail when they are developed and deployed in isolation from a firm’s contact centre

Many simple customer service tasks lend themselves well to automation, but as customers ask increasingly complex questions, how do we ensure that we deliver the empathy and expertise required to maintain high levels of customer satisfaction? Too many AI projects fail when they are developed and deployed in isolation from a firm’s contact centre. This is the hub that forms the heartbeat of human interaction, extending as it does from inside the business, outwards to customers and partners. So exactly what is required to deliver a seamless integration of automated and assisted customer service?

The four cornerstones of bot

Enterprise applications software company IFS-mplsystems provides four cornerstones for bot creation designed to produce AI-driven customer service services that work effectively and accurately:

  1. Narrow, then broaden: Any level of bot development should ‘start narrow and then broaden later’. No brain (human, or computer) is good at drinking from a firehose on day one and both brains need to be given appropriate learning space.
  2. Shared chatbot-human DNA: Chatbot virtual assistant AI should never be considered as a wholly alternative replacement channel to human customer service. Rather, it should be embedded in every part of the customer service channel to deliver intelligence at the ‘front end’ of every conversation or interaction.
  3. Seamless transfer: When a request is too complex for the chatbot, it should seamlessly transfer the conversation to an appropriately skilled human agent. But, crucially, each of these more complex query resolutions should then be fed back to the chatbot in the form of data for onward learning.
  4. Be iterative, continuously: Make bot development a truly iterative ongoing process that develops organically inline with the businesses’ commercial goals and market strategy. Further here, bots should not just answer questions, they also need to process requests, in just the same way that we want human agents to actually solve our problem not just advise us when we contact a call centre. It’s not just about AI, but also about solutions that combine Robotic Process Automation (RPA) to automate tasks.

So, like a good customer service bot, let’s stop and ask ourselves what we’ve learned so far. We know that successful modern commerce is driven by emotionally-rich interactions with companies who understand the value of ground level collaborative engagement with customers. We also know that chatbots can form an invaluable ‘front end’ interfacing layer that positively enhances customer experiences, if engineered and built conscientiously.

That might sound like a strange term to apply to software programming, but conscientious chatbot development is the careful application of AI as part of a multi-channel customer journey, not added on as a separate silo or an alternative channel. Conscientious chatbot development also understands that chatbots need time to learn on the job; and they need a staged approach to integration into business operations, as they get smarter. Too many contact centres have got ahead of themselves by creating quick-fix chatbot software without conscientious engineering.

“Every year the volume of interactions coming from customers increases by almost 10% and every year the number of channels that customers use grows. A few years ago it was phone calls, email and webchat -- now it’s Facebook, Twitter and messaging channels such as WeChat and WhatsApp. For a business to continually grow the contact centre to soak up this volume and complexity is not sustainable. Businesses have no choice but to introduce AI in the form of chatbots and virtual assistants to help out. But to deliver an excellent customer experience, not just control costs, theses chatbots must not be viewed as an alternative channel, they need to be an integral part of every other channel, providing intelligence at the front end and seamless proactive handoff to an empathetic human when it makes sense,” said Susannah Richardson, marketing director, IFS-mplsystems.

10,000 hours of training

While chatbot development success will be largely governed by the realities and best practices thus far discussed, no virtual assistant will ever be very capable until it has a rich, deep and varied pool of data upon which to draw experience from.

No virtual assistant will ever be very capable until it has a rich, deep and varied pool of data upon which to draw experience from

Social philosophy author Malcolm Gladwell suggested that humans require somewhere near 10,000 hours (just over a year of continuous time) to become an expert in something. IFS-mplsystems Richardson echoes this assertion by saying that Even for something as simple as requesting a balance of your account there can be over 1000 ways to ask that question and that equates to a huge amount of sample data require to train your bot to answer a single simple request.

Chatbots, just like humans, need training. They also need carefully applied and intelligently graduated levels of experience while being fed on rich streams of quantified and qualified data. If we can give our new virtual team members this kind of education and work experience, then they can emerge from adolescence as truly productive and positive members of society. Let’s never forget, an effective chatbot is a happy bot… and it won’t be long before they are reminding of us the fact.

For more information on implementing chatbots in your contact centre, download the report here

9 expert tips on avoiding the pitfalls of customer service

C-suite executives and senior business leaders discuss how to overcome damaging customer service failings

Despite its maturity, there are still many failures in customer service in 2018. Why are these still occurring and what are the best future-proof solutions?

To find out, Raconteur asked dozens of C-suite executives and senior business leaders. Here, in their own words, is what they said:

01 - It’s all about being personal

If customer service isn’t personal, and you don’t know your customer, then it isn’t working. Transforming the retail experience to connect the high street with the online realm requires fundamental changes in the retail business model. To achieve retail nirvana, businesses must integrate and augment personalised customer service throughout, covering all touch points from the store, to online, to mobile. Few have recognised the technology that already exists to help them survive and prosper in the digital age. Retailers lack the integrated vision and execution plan to address these new imperatives. Shane Finlay, chief value advisor, SAP

02 - The need for speed

Over 40 per cent of people say they prefer to complete their entire shopping journey on mobile, from research to purchase. However, many companies let themselves down with slow loading times.

Over half (53 per cent) of us give up if a site takes longer than three seconds to load, but the average UK mobile site load speed is 8.9 seconds. It’s clear that the average experience on mobile is too slow for today’s customers, who need answers and actions quickly. These common frustrations get in the way of excellent customer service. Alessandra Alari, head of search (large customer sales), Google UK

03 - Use data to create an experience

We are now in an experience-driven world; we have to make experiences out of business. The customer journey needs to be powered by unique identification and data. To understand the customer you need intelligence, and to access the right data at the right time. Vijayanta Gupta, head of product and industry marketing, Adobe Systems Europe

Data has to be seen as a game-changing asset. Therefore business leaders need to become experts in data science and artificial intelligence. That drives a completely different way of thinking, and behavioural change is required. CEOs who are not interested in data will not keep their positions for very long. Andy Day, chief data officer, Sainsbury’s

04 - Be consistent across channels

The biggest customer service risk, and therefore opportunity, is the blurring of channels; consumers don’t differentiate between .com and in-store, mobile and desktop, or sales associate and online chatbot. Nor should brands. Ensuring customer service is consistent across the channels and reducing unnecessary friction between consumer touchpoints is the number-one priority for business – getting this right will exponentially multiply the brand experience. Getting it wrong will just erode customer trust and loyalty. Will Glynn-Jones, managing director, M&C Saatchi Shop

05 - Make it easy in-store

Barclaycard research conducted at the end of last year showed 55 per cent of consumers had walked away from a purchase due to disappointments with the high street experience. There’s a clear opportunity for retailers to be more creative. Whether it’s offering somewhere to leave their bags, in-store postal services or accepting faster payment methods, there are many engaging ways to make high street shopping easier and more enjoyable. Those retailers who embrace this approach will be rewarded at the till. Paulette Rowe, managing director, Barclaycard Payment Solutions

06 - Do business on the customers’ terms

Trust is easy to lose and hard to win back. It is imperative to truly understand the individual by recognising the trends in generational differences in experience, behaviours, preferences and skills. You need to know your customers and colleagues inside out, not forgetting they are often the same. The key is about giving customers the choice and flexibility to do business on their terms in their language. Nick Williams, managing director of consumer digital, Lloyds Banking Group

07 - Get social…like a startup

A wave of successful startups – Uber, Airbnb, and Deliveroo – have a social media element at the heart of their core business strategy. They operate primarily on social channels, and that has put other businesses under pressure to ensure they offer the same customer service. Social media platforms such as Facebook and Twitter, along with instant messenger apps such as WhatsApp and WeChat, are a crucial ally for businesses wanting to offer impeccable customer service. Blake Cahill, senior vice president of global digital marketing and media, Philips

08 - Embrace tech before it’s too late

We estimate that by 2020 some 95 per cent of customer interactions will be carried out by some form of artificial intelligence. Advances in speech recognition, biometric identification and neurolinguistics will also mean that as customers interact with businesses and brands via voice, our experiences will become increasingly conversational and human-like. Businesses offering only the option of struggling against a simple, automated chatbot or answering service will soon find themselves left by the wayside. Shashi Nirale, senior vice president and general manager for Europe, Middle East, and Africa, Servion Global Solutions

09 - Revamp and smarten outdated loyalty schemes

More than a fifth (22 per cent) of consumers in the UK – 10.3 million people – have unused loyalty points, according to new Deloitte research. Traditional loyalty schemes need a rethink, not only because of changing consumer expectations but also because they have become expensive to run and difficult to unwind. Loyalty should be about more than collecting points. Consumer businesses should consider smartphone apps, coupon scanning, data-profiling tools and connected stores. These may help evolve a traditional loyalty scheme into a custom-built ‘smart’ loyalty programme that engages consumers at a personal level. Ben Perkins, head of consumer business research, Deloitte

Customer experience: privacy vs. personalisation

Customers today are more powerful and more demanding for personalised products and bespoke offerings than they have ever been. How will new privacy legislation affect this?

The General Data Protection Regulation or GDPR privacy legislation that comes into force on May 25 has left companies unclear about how to offer the personalised products that customers demand in an era of tighter control of personal data.

José Alberto Rodriguez Ruiz, director of cloud technology and data protection officer at Cornerstone OnDemand, a provider of cloud-based human resources systems,  believes that once they dig into the details most companies will find it is quite a clear and highly operational text, based on best practice.

“Codes of conduct will be followed by certifications that should streamline the implementation of privacy obligations, the same way [IT security standard] ISO 27001 has streamlined security,” he says. “Thanks to GDPR, organisations are becoming more aware of the requirements that have been there for decades, and learning about new ones.”

Many experts believe that tighter privacy requirements could improve customer experience

Beyond GDPR, many experts believe that tighter privacy requirements could improve customer experience, as organisations will only be able to use relevant and up-to-date information to personalise the customer experience.

Egil Bergenlind, former data protection officer at payments firm iZettle and chief executive officer of data protection specialists DPOrganizer, says: “It will also require them to explain how individualisation is made possible, and sell the value of it, creating a better customer relationships based on transparency and trust.”

Post-Brexit, the UK’s commitment to GDPR means UK companies will remain strong and connected in the European Union market. However some countries outside of Europe are planning data protection regulation even more rigorous than GDPR, which has important implications for the digital economy, which is becoming an increasingly important part of the UK’s global competitiveness.

China, for example, is implementing new data regulations around the collection, storage and sharing of personal data and user consent, which could potentially be more far-reaching than GDPR.

Companies will need to carefully plan ahead to make sure they are future-proofed to stay ahead of the game, says Sachiko Scheuing, European privacy officer at marketing tech firm Acxiom and co-chair of FEDMA, the Federation of European Direct and Interactive Marketing Associations.

Experience has shown that individuals are more than happy to surrender their data, so long as they are confident that it is going to be used in an intelligent way

“The ‘north star’ for businesses should always be what’s in the best interests of their customers, ahead of the best interests of the business,” she says. “While some 61 per cent of people are happy with the amount of data they share with businesses, recent Direct Marketing Association research in the UK also found that three quarters of consumers consider their data privacy a ‘concern’.

“This concern has to be acknowledged by businesses, and embraced as a positive step within customer management, rather than a hassle to be dealt with.”

With all new privacy regulations in place, will companies still have the data they need to provide the personalisation people have come to crave?

“Absolutely,” adds Mr Bergelind. “And we will also have better informed customers as a result. The intention of the rules is not to prevent use of data, rather to create more transparency. Experience has shown that individuals are more than happy to surrender their data, so long as they are confident that it is going to be used in an intelligent way that will ultimately make their lives easier.”

And their customer experience that much richer.

Social media: the next frontier in customer service

Social apps: the next frontier in customer service

It’s all about social media right? Think again. The number of people using messaging apps overtook social networks two years ago. Globally, more than two billion log on to one of the top five messaging apps every month. In China, Tencent just announced that its WeChat platform hit a milestone – an incredible one billion users. Messaging is the new battleground.

WeChat’s messaging platform, known as Weixin which means “micro-letter” in Mandarin, is more of a social app. A one-stop shop for networking, mobile payments and shopping, it is a super-charged app that has huge implications for the customer service industry globally.

“The number of digital natives in China is growing rapidly and they bring with them changing lifestyles and consumption patterns which are well suited to this platform,” explains Tianbing Zhang, Deloitte’s China consumer products and retail sectors leader.

“While it is easier for shoppers to fill their online baskets with products personalised to their needs, they can do so while gaining feedback on their choices in real time through social networks and messaging. Digital ecosystems, including payment and delivery methods, are now well developed to make social shopping easier and better suited to consumer lifestyles.”

So-called “social CRM” is now powered by endless bytes of consumer information and its evolution is considered the next frontier in this sector

This model is now so developed in Asia, through players such as Japan’s Line and South Korea’s KakaoTalk, that a whole set of customer relationship management (CRM) services have developed around these social apps. So-called “social CRM” is now powered by endless bytes of consumer information and its evolution is considered the next frontier in this sector.

“Tencent and Alibaba are the real pioneers of customer-driven digital services and the scale of data they hold on individuals is awesome, fantastic and scary, depending on how you look at it,” states Maz Amirahmadi, chief executive of market research firm ABN Impact.

CRM platforms are now integrated into the likes of WeChat or Weibo, whereby a user’s social profile and preferences can be pulled into a company’s system, providing the brand with a single source of data for analysis and deeper insight as well as gauging ways to fine tune the user experience via the application.

“WeChat has gone way beyond being just a messaging app. It has consolidated social interactions into an omnichannel experience. The platform is now critical to customer engagement in China and has a whole economy around it,” says Martin Hill-Wilson, who heads up Brainfood Consulting as a customer engagement strategist.

An all singing, all dancing social app is yet to evolve fully in the West. Facebook has moved forward with its Messenger platform and is teaming up with PayPal to offer payment options. However, the ecosystem for shopping, socialising and messaging is much more diversified in Europe and North America.

“The goal ultimately is to take control of the customer. If a search moves off Google and on to a messaging platform then the likes of Facebook control the consumer data going forwards and that’s crucial. This is the year that Mark Zuckerberg will look to monetise messaging and make it work for customer service,” states Mr Hill-Wilson.

There are lessons that can be learnt from China as social apps ascend in the West. Tens of thousands of merchants in Asia have learnt quickly that they must have an omnichannel strategy in place that is engaging at all points in the customer journey, integrating social CRM with data from traditional sources such as call centres, stores or bots.

“We’re in the era of great expectations. People now expect more and seamless interactions in real time. The connected customer’s expectations are very high these days. Everybody wants it now. You don’t want to wait one minute, you want to be able to connect,” says Antony Bourne, vice president of global industry solutions at IFS.

Customer service in China has now reached dizzying heights. On average workers from online stores are available to chat with customers for 12 hours a day or more, with some even offering 24/7 availability.

“They are very quick at handling requests here,” says Thomas Guillemaud, chief operating officer of Shanghai-based IT Consultis. “Retailers in the West will need to be quick to listen to customers, improving the products they offer, how quickly they respond to chats, how they handle changes to orders, deliveries, returns and more will also be crucial.”

The opportunity for brands globally as social apps and social shopping flourishes is that there will be many more touchpoints and interactions with corporations, their products, people and bots. It also has the potential to permeate many more facets of our lives.

“Be it on social media, dedicated online marketplaces, or even thanks to QR codes strategically located on any surface – anything could lead to a purchase,” states Mr Guillemaud.

However, the consensus is that although social apps are likely to become a more important part of the mix in the West, they are unlikely to reach the same level of dominance that they have achieved in, say, China. Customer service providers can take a collective sigh of relief. They will still have to up their game though, incorporating a strong offering in this sector.

Mr Hill-Wilson laments: “Social apps are not the next silver bullet, it won’t kill or solve everything. Messaging will in fact experience the same problems as say call centres have… as they become more popular you will still have to get in the queue to get a response and customer service.”

Why customer service should be a priority in B2B markets

Delivering great customer experience in B2B markets has never been simple… and has never been more important

Helped by technology, companies that serve consumers have made great strides in customer service in recent years. Those that serve other businesses, however, have lagged.

According to McKinsey, while business-to-consumer (B2C) companies enjoy an average customer service score in the 65 to 85 per cent range, business-to-business (B2B)  company scores average less than 50 per cent.And as B2B customer expectations rise, the gap between the two offerings likely will widen.

One challenge is that the long-term relationship building, scoping and negotiating that once underpinned B2B sales is being replaced by the more immediate XaaS model (X-as-a-service), where clients can do their own research, choose cost-competitive options and use them only when they need them.

The long-term relationship building, scoping and negotiating that once underpinned B2B sales is being replaced by the more immediate XaaS model

Organisations can adapt to this business model in a positive way, says Jenniffer Breitenstein, senior vice president of global marketing and analyst relations at software company ServicePower. “The servitisation of B2B, often enabled by the cloud, opens up immense opportunity for organisations,” she says. “You can implement offerings that were once products much more quickly, provide new services that weren’t previously possible, and open up new revenue streams.”

B2B customers are already demanding a better experience, as highlighted in a McKinsey survey of 1,000 B2B decision-makers, where a lack of speed in supplier was identified as the number-one “pain point”, mentioned twice as often as price.

Furthermore, by accelerating and simplifying these interactions companies can boost their win rate by up to 40 per cent and lower associated service costs by up to 50 per cent, all the while reducing customer attrition by up to 15 per cent.

KPMG Nunwood’s Winning in the Moments that Matter report on the state of customer experience for B2B companies reveals that the critical moments that define a successful B2B relationship are increasingly less about price and product features and much more about the customer experience.

Unlike B2C, B2B customers are not buying for personal gratification; they are buying as part of their job and need it to be as efficient and easy as possible

Many B2B programmes attempt to implement B2C strategies but fail because they are not tailored to customer requirements. Unlike B2C, B2B customers are not buying for personal gratification; they are buying as part of their job and need it to be as efficient and easy as possible.

“B2B is different to B2C,” says Brian Green, head of Europe, Middle East and Asia sales at Magento Commerce. “Unique pricing agreements, different buyer authority and approval levels, the ability to re-order from bill of materials or based on order history are integral to the B2B buyer journey and when tailored to an B2B organisation can act as a differentiator to competitors.”

B2B organisations must also understand the changing demographics of their business buyers. Mr Green adds: “In construction, for example, often seen as a laggard in adopting technology and positioned last by Forrester in their industry analysis of organisations implementing B2B ecommerce, the buyers are young millennials who are absolutely focused on using mobile technology in the field.”

In many ways delivering a great B2B customer experience can be more challenging than B2C: just one dissatisfied account walking away can deal a devastating blow to a company.

This makes it incredibly important to focus on customer retention methods, says Jenny Burns, chief executive of consultants KBS Albion. “In addition, customers of B2B businesses want to be partners, working in collaboration to deliver results and not be on the receiving end of loads of marketing. This requires a new capability to build deeper relationships and leaders who are visibly involved in resolving problems quickly.”