2020 VISION WHAT WILL THE PERFECT CUSTOMER EXPERIENCE OF 2020 LOOK LIKE? - BROUGHT TO YOU BY - MYCUSTOMER

2020 Vision
What will the perfect customer
experience of 2020 look like?

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What will the perfect customer experience of 2020 look like?

Contents
 Introduction                                                           Page 3

 What was the perfect customer experience of 10 years ago?              Page 4

 What is the ‘perfect’ customer experience of today?                    Page 6

 What could the ‘perfect’ customer experience of 2020 look like?        Page 9

 How can businesses begin the evolution towards the 2020 vision?       Page 11

 Conclusion                                                            Page 13

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What will the perfect customer experience of 2020 look like?

Introduction
In recent years, customer experience has emerged to become
a competitive differentiator and the key focus area for CEOs –
regardless of which industry you serve. Customer experience
was always at centre stage, but previously brands competed and
differentiated mainly on product or price. However, they have now
come to understand that in the age of the ‘always-on’ customer,
providing an excellent holistic customer experience pays - literally.
Analyst firm Forrester recently claimed that a 10-percentage-point
improvement in a company’s customer experience CX score can, in
some cases, translate into more than $1 billion impact on revenue.

So what does ‘customer experience’ actually mean? Gartner describes it as “the customer’s
perceptions and related feelings caused by the one-off and cumulative effect of
interactions with a supplier’s employees, systems, channels or products.” According to a
recent survey by the analyst house, 89% of companies predict that customer experience
will be their primary basis for competitive differentiation by 2017. And so much so that is
expected to garner the highest level of marketing investment next year as a whole host of
innovative new technologies emerge to support these projects.

However, measuring the customer experience that you provide is not necessarily cut and
dried for any organisation. There are a number of different methods that can be leveraged,
from the very early Net Promoter Score (NPS) and Customer Satisfaction Measurement
(CSAT) to the more recent method of Customer Effort Score (CES). Established in the
1990s NPS measured customer loyalty based on the question ‘Would you recommend the
company to others?’ while CSAT evaluates experience based on customer satisfaction, and
CES on the amount of effort that customers exert to get their problem solved.

Whichever way you dice it, customer experience is a useful indicator of good business
health and efficiency. There are a number of fairly obvious signs that will alert you if your
customer experience isn’t quite up to scratch, such as declining CSAT and NPS scores,
increased complaints, fewer referrals, and an increased number of negative conversations
on social media. Customer churn is of course the most obvious and perilous, although the
reputational damage done by social media detractors cannot be under-estimated. So in an
age when experience is the competitive differentiator, making sure you provide the right
experience that creates loyal customers who engage with your brand is vital.

To examine exactly what this means, we’ve traced the emergence of customer experience
and analysed how it has changed over the last decade to its current standing, explaining
how brands can deliver the ‘perfect’ customer experience of today. We’ll name a few of
those who appear to be getting it right before predicting what the ‘perfect’ customer
experience will look like in 2020 and how businesses can start on the trajectory of realising
this vision for success.

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What will the perfect customer experience of 2020 look like?

What was the perfect customer
experience of 10 years ago?

Like every other area of business, the digital transformation of the
past 10 years has dramatically changed customer service. In 2012,
Ed Thompson, research director at Gartner, told MyCustomer: “10
years ago, I met my first VP of customer experience in America and
there’s now 2,100 of them, so we’ve gone from none to 2,100 people
doing this job full-time.”

Gartner has diligently followed the emergence of customer experience, declaring it
the latest ‘battleground’ for businesses. Research undertaken by the firm this year
found that 89% of companies believe that customer experience will be their primary
basis for competition by 2016, leading the analyst firm to predict that in 2017, 50% of
consumer product investments will be redirected to customer experience innovation.

There are a number of factors that have driven this change. A decade ago, before the
days of online shopping, customers had less choice than they do now, less channels
on which to purchase and engage with the business and no social media to publically
air their grievances if their service experience was poor. Then ecommerce came to the
fore and businesses had to provide a platform to interact with their customers online,
which led to more digital channels, social media, and the need to provide quicker and
more seamless service resolutions. As businesses converged to provide the same
offering for product and price, customer experience emerged as a strategy to help
differentiate, retain customers and grow the customer base.

Guy Yaniv, general manager, customer experience analytics at NICE Systems, says:
“10 years ago, consumers were much more inclined to experience service in the
way enterprises dictated. Now, they have evolved to dictate how they expect great
customer service to be. They want to experience it in a certain way, on the most
convenient channel for them (at that time) and in their own time. Another important
element is that nowadays, customers are not afraid ‘to take action’ if service level is
not as expected.”

To understand exactly which businesses were adapting to this change and how well,
analyst firm Forrester launched its first ever annual CX Index in 2007 – signifying
just how important CX had become. In the first year that the survey was conducted,
35% of consumers scored companies either a ‘poor’ or ‘very poor’ while 0% had
‘excellent’. Since then, the CX Index has demonstrated year-on-year how consumer’s
expectations have changed and how the standard of service is now higher than ever.
Last year’s Index found that 11% of companies were rated as ‘poor’ or ‘very poor’ and
11% were rated as ‘excellent’.

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Effectively, this means that if your customer experience is ok, that really is the
equivalent of what poor was just five years earlier. ’OK’ and ‘good’ are now the table
stakes. ‘OK’ is the new ‘poor’.

Consumer demand for better service across multiple channels led Forrester to
declare in 2013 that we are now living in “the age of the customer”, with analyst
George Colony describing it as a “a 20-year business cycle in which the most
successful enterprises will reinvent themselves to systematically understand and serve
increasingly powerful customers.” Businesses, he added, will need to re-engineer their
entire company to deliver a great digital experience.

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What will the perfect customer experience of 2020 look like?

What is the ‘perfect’ customer
experience of today?
As the Forrester research showed, customer experience excellence
is a moving target, with what constitutes an ‘excellent’ experience
becoming a higher standard every year. Given that one of the biggest
drivers of change is the customer, understanding what makes a great
experience of today means taking a step back to look at consumers
and their current expectations.

Consumers now use more digital channels than ever before to buy more than
ever before. According to NICE Systems’ 2014 Global Customer Experience Survey,
customers use on average six different channels to contact companies for various
customer service questions, issues or complaints - ranging from social media to
email. And a similar report from Deloitte and eBay found that one in three consumers
have used multiple channels to make a purchase. These are just a couple of the
many surveys conducted last year that showed consumer’s preference to interact
with businesses via email, phone, in-store, online chat and social media and expect
service to be consistent across all these touchpoints. They’ve come to expect a joined-
up approach to service and be able to seamlessly continue a single conversation or
transaction even if they choose to change channel.

According to the Deloitte and eBay report, omnichannel has presented a huge
opportunity for businesses to improve the customer experience and differentiate
themselves from the competition. By being broadly present across channels and
enabling each channel to serve the customer at any point through the purchase
journey, retailers can raise brand awareness, drive loyalty and ultimately value, said
the report. In 2013, when the term ‘omnichannel’ first came to the fore, Gartner
predicted that by 2015, businesses without an omnichannel strategy would lose 15-
20% of their best customers to competitors.

As omnichannel has evolved from being a competitive advantage to the new standard,
consumers have raised the bar to demand a more personalised level of service. They
now expect the business or retailer to know their specific intentions, preferences
and desired level of interaction. The 2013 Cognizant Shopper Study found that
personalisation is a major factor in influencing purchase behaviour, from personalised
offers to personalised communication, a properly executed omnichannel strategy can
help motivate and reward customers, and ultimately drive sales.

There are already a number of businesses who are offering this level of
personalisation. Services likes Amazon, Netflix and iTunes are using Big Data to
understand customer’s specific interests and delivering content that is personal to

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them. Based on their viewing history, purchases and known preferences, they are
successfully advertising products and promotions that perfectly match the consumer.
This level of personalisation isn’t solely a digital strategy. Forward-thinking businesses
are matching up consumers’ online habits with their in-store behaviours through the
use of payment and loyalty cards to map a holistic view of the customer’s journey.

“Enterprises currently deploy technology that is more siloed and optimised for a
specific channel experience. But investing in holistic technology allows them to
understand the customer from the customer point of view, not the enterprise’s,” says
Yaniv. “Enterprises are coming to realise that providing siloed experience - let’s take
a visit to your nearest retail bank branch as an example - is far from being sufficient.
In order to meet expectations, they need to gather information from all previous
interactions with the bank, on all channels, combine them with all relevant data about
the consumer so they can optimise the service they provide in the branch.”

But the quest for the perfect customer experience doesn’t end there. As well
as expecting businesses to cater to their individual needs across channels in a
personalised manner, customers now also want this delivered in real-time. The appeal
for customers is clear – enabling them to receive offers and recommendations at the
right time, in the right place.

This instant access to personalised service is enabled by the arrival of relatively new
technologies such as Near Field Communication (NFC), iBeacons and Bluetooth, which can
deliver personalised communications and offers to customers while they’re in store.

There are a number of brands who are already providing a perfect experience for the
omnichannel customer, Zappos and Apple being the most obvious. Zappos’ strategy
is to spend the big investments in customer service rather than outbound marketing,
instead analysing and tracking consumer behaviour to offer an experience that is
highly personalised, easy and emotionally engaging. The online retail giant offers
thousands of products to customers online but does so without any complexities,
making sure customers have a great experience and then asking those customers to
write a review afterwards.

CEO Tony Hsieh, in his online ‘Delivery Happiness’ FAQs page, makes it absolutely clear
that his customers have always been his greatest flag bearers: “Our philosophy is to
take most of the money we would have otherwise spent on paid advertising or paid
marketing and invest it into customer service and the customer experience instead,
and let our customers do the marketing for us through word of mouth.”

In the age of social media, identifying and engaging with brand advocates pays. Errol
Greene, solutions development manager at customer engagement consultancy Clear
Harbor, LLC, explains: “Companies that do this are considered disruptive service
leaders in their markets, and good reviews, like bad ones, spread quickly. The impact
reviews can have in regards to driving new business can be substantial. Just ask any
service provider about the effect that five-star reviews have on revenues, compared
to even four-star reviews. This strategy is proving to work especially well in highly
commoditised markets.”

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Given that Zappos was bought by Amazon in 2009, it’s no surprise that the two boast
a very similar customer-centric philosophy. Amazon’s customer service experience is
again, easy, highly personalised and built on word of mouth reviews. Its sophisticated
use of Big Data and predictive analytics technology mean that the retailer is always
seeking to pre-empt customer’s wants and needs and anticipate what that might be in
the future. From experimenting with drones to the introduction of same day pick-up
for Prime customers and the opening of a bricks and mortar store in Christmas 2014,
Amazon is forever reacting to the multichannel customer’s changing expectations.

Looking closer to home, there are a number of British retailers that are also exceeding
at customer experience. Since it first opened its doors in 1864, satisfaction has
been the key tenet of John Lewis’ strategy, and as far back as June 2012, long before
it emerged as a buzz word, MD Andy Street told the audience at the British Retail
Consortium (BRC) Symposium event that John Lewis would be strongly pursing an
omnichannel strategy.

Speaking to MyCustomer.com, he said: “We know that about 60% of our customers
buy both online and in shops so the approach is to make it absolutely seamless for
them to move from one to the other. So they can research in one place and shop
in the other, they can buy in one place and pick up in the other – the art of sales is
consistent across channels, so the whole approach is to make it channel agnostic.
They’re not even supposed to know or see or realise which channel they’re using
because it’s one overall customer offer.”

Burberry is another British brand providing the ‘perfect’ customer experience, mostly
due to its investment in digital technologies and the merging of the online and in-
store experience. On its website, Burberry explains how it has equipped all its sales
associated with access to iPads in store, invested in global customer analytics and
insight capabilities to better understand changing consumer trends, and created
Customer 1-2-1, a customer permission-based iPad application tool that allows sales
associates to create and view customer profiles in one place.

Former CEO of Burberry Angela Ahrendts has explained in the past how this works
at the retailer’s flagship store: “Burberry Regent Street brings our digital world to life
in a physical space for the first time, where customers can experience every facet of
the brand through immersive multimedia content exactly as they do online. Walking
through the doors is just like walking into our website. It is Burberry World Live.”

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What will the perfect customer experience of 2020 look like?

What could the ‘perfect’
customer of 2020 look like?
If this, then, is the state of leading customer experience today, what
can we expect the ‘perfect’ customer experience to look like in the
future? Given that the technological transformation of the past
decade was a significant driver in changing consumer expectations,
we can expect that new and improved technologies will accelerate
further changes.

Predictive analytics – knowing what a customer’s next best action will be – is set to
become even more sophisticated. As Forrester describes it, “predictive analytics is a
key capability to make better decisions, avoid risks, and create differentiated, more
individualised customer experiences.” Analyst firm Frost and Sullivan recently noted
the move towards a more advanced type of predictive analytics in the research sector
called ‘prescriptive analytics’, which helps retailers respond to insight from consumer
data by recommending one or more courses of action and showing the likely outcome
of each decision. Lithium’s chief scientist Michael Wu has also been talking of the rise
of prescriptive analytics. In an interview last year, he described prescriptive analytics
as “when we need to prescribe an action, so the business decision-maker can take this
information and act.”

The Internet of Things (IoT) is also set to dramatically impact the future of customer
experience. Gartner recently forecast that by 2018, 5% of customer service cases will
be initiated by internet-connected devices, up from 0.02% in 2014. With the home
expected to have more than 500 smart objects, connectivity of these devices will make
many of them service agents in and of themselves. “The explosive growth of the IoT
and associated use cases will bring a transformational change in the customer service
space,” notes Olive Huang, research director at Gartner.

Contact centre technologies will also adapt to the changing landscape as speech
recognition, virtual agents, video chat, mobile service and voice biometrics will become
common place and traditional tools like IVR will improve to become a viable solution
that delight consumers. As Yaniv explains: “Enterprises are adding more technology to
enable self-service as customers demand their own terms and their own preferences
of how they want to interact. But these machines need to be ‘smart’, they need to
‘understand’ the complete customer journey in order to fulfil customer needs.”

The trend here is very much towards self-service and a reduction in the amount
of effort that the consumer must exert to reach a resolution. For instance, voice
biometrics – which verifies a person’s identification by taking a voiceprint of the
customer on a previous call – will drastically decrease the average call time and
save consumers from the dissatisfying long authentication process. Adoption of this

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technology, however, all very much depends on consumers overcoming their privacy
concerns in light of organisations needing a recording of their voice.

There are a whole host of other technologies that are likely to impact the customer
service ecosystem in the years to come, from augmented reality to wearable user
interface to 3D printing. The combination of all these technologies will dramatically
alter consumer expectations as they become everyday commodities and expect
a standard of service that utilises these technologies. Darren Young, business
development director at Customer Service Network, goes so far as to predict that
in 20 years from now, all service problems will be eradicated and all contact centres
worldwide will be redundant. “In stores, robots handle everything and the last human
customer service person is fired for not wearing an iWatch. There are no service jobs
left which is just as well as 90% of people able to work don’t want to,” he forecasts.

In terms of strategies, Voice of the Customer (Voc) programmes are also expected
to become more advanced as senior executives focus on emotion as a significant
impactor on customer loyalty. According to Forrester, from 2015 and beyond,
companies will begin to jump on the “emotion bandwagon” to differentiate and deliver
“emotionally compelling” customer experiences. And to measure this emotion, VoC
programmes will become more advanced at measuring sentiment.

“We will see a bigger focus on finding the right ways to measure sentiment from
VoC programmes, and there is a lot of work that is entailed,” says Michael Gazala, VP
research director at Forrester. “Companies will be looking at text and speech, and
trying to figure out how you can pull in proof points from the speech and text data as
you go through it.”

Social customer service will also become more integrated with brands’ CRM strategy.
According to NICE Systems’ 2014 Global Customer Experience Survey, consumer
use of social media and mobile apps for customer service has doubled since 2011
and businesses are responding. Frost and Sullivan recently stated that more than
80% of retail businesses now use social media for customer service in a bid to cope
with consumers ever increasing demands for timely and informed responses. It’s the
aviation industry that has emerged as the trailblazer for social customer service and
who we can look to for an indication of future trends. Dutch airline firm KLM, always
forward-thinking in its social strategies, have even gone so far as announcing a 24/7
customer support service via its LinkedIn company page.

While not all businesses are replicating a KLM-type social offering, this is set to
accelerate. Research from the Interactive Intelligence Group predicts that social media
will be integrated as a service channel in as many as 63% of contact centres by 2016.
“By integrating social media in their customer contact strategies, companies will gain a
competitive advantage by being closer to their customers’ needs and answering client
inquiries faster than through other channels”, says Marcin Grygielski, from the firm.

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How can businesses begin the
evolution towards the 2020 vision?

It’s imperative then that businesses adopt these technologies
and trends, as well as adapt their service strategy to future-proof
themselves. One of the biggest changes in service strategy is a move
towards proactive engagement of customers. In Forrester’s 2015
predictions for the customer service sector, analyst Kate Leggett
forecasted that brands that deliver a more sophisticated customer
experience will be those who pre-empt customer requirements
through active insights and data.

“They [organisations] will use learnings from these proactive engagements to
improve operational performance and to predict future customer behaviour, such
as prediction of future purchases or likelihood of attrition,” she said in the report.
Recent research from Moxie Software appears to echo this sentiment: a survey of
2,500 US and UK adults over the Christmas holiday season found that 78% of survey
respondents in the UK indicated that they want brands to proactively engage with
them online, especially when they are struggling on a website.

The need to proactively engage with customers will see businesses start to revamp
the customer journey map and become much more holistic in their understanding
of the customer. Yaniv gives an example of how this can be done: “For instance, if
I’m trying to do something online and can’t, and you ring customer service, what you
typically hear is “How can I help you?” What you should be hearing is the enterprise
knowing exactly what the problem is and why the customer is calling.”

He adds: “In the future, enterprises will not be reactive but proactive. They won’t
just offer a generic level of service to everyone but will be able to segment to one,
understanding the customer’s journey and create an offering that’s specifically tailored
to you.”

This will be enabled by the rise of IoT technologies – rather than needing to contact a
service provider when something goes wrong, in the future the device will repair itself
or automatically let the provider know, as well as send how-to content directly to the
consumer to help resolve the issue.

Businesses are also looking internally to create change. Many organisations are
recognising the connection between engaged employees, customer satisfaction and
business performance, leading employee engagement to become of the most talked
about trends in the area of customer experience. The Temkin Group’s Employee
Engagement Benchmark 2015 report found that companies with above average

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customer experience (CX) in their industry benefit from a workforce where 75%
of their employees are highly or moderately engaged compared to only 47% of
employees at other companies.

This has led Bruce Temkin, managing partner at Temkin Group and chair of the
Customer Experience Professionals Association, to declare 2015 as “the year of the
employee”. As companies increasingly focus on customer experience in 2015, they’ll
recognise the need to make internal changes. In 2015, successful customer experience
efforts will realise that the key ingredient to success is their employees,” he says.

Brian Weston, director of marketing and communications at Institute of Customer
Service, adds: “Customers who perceive employees to be friendly, helpful, interested in
meeting their needs and knowledgeable are much more likely to remember a positive
experience and repurchase.”

All this has led to the extension of customer journey mapping to encompass employee
journey mapping: outlining the complete employee experience with the brand and
thereby identifying areas for improvement. Customer service expert Graham Frost says
that deploying an employee journey map will see businesses invest in their employer
brand to attract the right people and create the right working environment. “If your
employees feel special then your customers will feel special,” he explains.

        So, for those organisations looking to ready themselves for the future,
        there are a number of considerations that they can put into practice,
        including:

        •     Proactively engage with the customer on social channels.
        •     Use this insight to pre-empt how customers will want to interact with
              the organisation, and on which channels.
        •     Create a holistic customer journey that is unique for each customer.
        •     Stay informed of new technologies and trends, and integrate this into
              their customer service and experience strategy.
        •     Evaluate employee experience and make changes, where needed, to
              excite and engage existing and new employees.

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Conclusion

Exactly how ‘special’ brands can make customers feel is an ever-
changing notion. Businesses may all be converging towards the
same goal but they are also all unique in the various technologies
and strategies that they can undertake to get there. With so many
variables for a company to consider in their pursuit of customer
happiness, customers can rest assured that the experience will (and
should) differ from brand to brand.

The constant will be the customer, and the customer’s continuing desire for a higher
standard of service. As research has shown, brands that can harness the right level
of service at a point that satisfies consumer expectation will receive an army of loyal
customers, ready to shout about a brand and its products. Keeping a close eye on
general consumer appetite for service and your customer’s individual needs will be the
key to customer experience success in the future.

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About

MyCustomer.com is Europe’s leading online resource for customer-
focused professionals, with over 100,000 members. Sharing news
and advice on fields including customer service, marketing, sales and
CRM, MyCustomer.com is a vital hub for business leaders looking to
enhance every facet of the customer experience they deliver.

With a network of expert contributors from around the globe and a focus on strategy,
technology and in-depth research, members of the MyCustomer community are able
to tap into a wealth of knowledge and receive the most comprehensive view of the
trends affecting and influencing the world of customer management.

Join the community at www.mycustomer.com

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What will the perfect customer experience of 2020 look like?

About
At NICE, we protect people’s money, ensure their safety and improve
their experiences.

Many of the world’s leading companies and organisations are
expected to manage these three critical elements of modern living.
To do so, they are tapping into the power of data, which has become
ubiquitous in both business and life. These organisations turn to NICE
to operationalise this data to improve business performance, increase
operational efficiency, prevent financial crime, ensure compliance,
and enhance safety and security.

Since 1986, NICE has been the recognised leader in these fields, providing solutions
which turn both structured and unstructured data into valuable and actionable
information. Our success started by capturing interactions and our expertise has
evolved into applying analytics on these interactions. C
                                                       ​ ombined with our years of
cultivating domain expertise in partnership with our customers, we can help our
customers not only understand what’s happening in real time, they can predict what
will be.

NICE has more than 3,500 employees and a presence in more than 150 countries. Our
team is proud of their many achievements. NICE is regularly recognised for innovation
and the value it provides to more than 25,000 customers, including more than 85 of
the Fortune 100. When it comes to turning information overload into practical business
value, no one else comes close to NICE.

Find out more about NICE Systems at www.nicesystems.com