Consumers now expect personalised customer service experiences, whereby a website or app retains personal details in order to deliver tailored messaging, offers, and relevant products. Meeting these digitally-driven demands is crucial if brands want to keep pace and maintain their competitive edge.
Businesses, after all, are built on the success of their customer service, yet ensuring a truly personalised customer journey is no easy feat in the post-pandemic age. With a new generation of customers looking to operate on emerging channels – such as social media platforms and digital messaging services – businesses across every industry need to utilise their customer data to modernise the contact centre experience, both for the customer and the agents who manage customer questions or concerns.
Organisations which can’t meet these expectations risk losing or alienating customers.
While businesses have sped up digital transformation journeys as a result of the pandemic, many are still forced to contend with legacy technology and processes, frustrating data silos within their organisation, and data protection concerns, which can make providing a personalised customer experience frustrating and costly.
I: The customer service revolution
Historically, customers have expected basics like quality service and fair pricing, but modern customers have much higher expectations that include personalised interactions and connected experiences across digital channels.
The importance of offering such an experience can’t be downplayed in today’s digital-first business landscape. Microsoft data shows[1] that a positive customer experience can lead to a 10% to 15% boost in sales conversion rates. However, consumers not only want a positive experience, 80% want it personalised.
This means personalisation is no longer optional. It’s expected that consumers will continue to want personalised experiences for the long haul. Not only does make them feel more valued, but it, in turn, inspires greater brand loyalty.
“Hyper-personalisation”
Customer expectations don’t just stop at personalisation, as many consumers increasingly reliant on digital interactions are now demanding “hyper-personalisation”.
Traditional personalisation focuses on personal and transactional information such as name, organisation, and purchase history; for example, including the first name of a customer in the subject line of an email. Hyper-personalisation, on the other hand, is more complex and takes into consideration behavioural and real-time data such as browsing habits, in-app actions, and engagement data. Making use of this data can help organisations engage in more contextualised communication with customers, and help tailor products, services and experiences according to their wants and needs.
Netflix’s personalised recommendations engine, for example, draws data from multiple real-time sources. The company tracks: how the users interact with a show or movie; how long they watch it; whether they rewind, fast forward or stop watching and, if so, at what point.
There are numerous benefits to hyper-personalisation, both for the consumer and the organisation offering it. For the former, it saves time and eliminates the problem of feeling overwhelmed with options. For businesses, delivering hyper-personalised experiences to the customer allows them to tailor their marketing efforts at the individual level, which ultimately can boost revenue.
A new generation of customer
The growing demand for personalised customer experiences is being driven by a new generation of customers. Millennials – who make up almost a fifth of the population – are the first generation to have spent their entire adult lives with access to technology, such as smartphones and the internet. They have witnessed the positive effects these technologies can have on people’s lives, which has resulted in the most tech-savvy generation that values accessibility and convenience.
This reliance on digital services has further escalated as a result of the pandemic, which has seen new channels emerge for customer services. Digital messaging, for example, has grown faster than any other channel within the last year and is transforming how customers interact with brands. Digital natives flocked to messaging channels like WhatsApp, Facebook Messenger, and Twitter Direct Messages to engage with businesses, as well as chatbots.
The reason lies in the convenience of messaging. Connecting with businesses through messaging doesn’t interrupt people’s schedules, and enables customers to get their issues resolved while doing other things, be it while in a work meeting or while working from home. Ultimately, messaging provides a faster, more efficient customer experience.
Importance of evolving
The importance of evolving customer experience has never been more important. Not only are we facing a new generation of customers with greater digital demands, but this same generation also has more choices than ever before as a result of an ever-widening choice of goods and services.
As a result, customers have become more demanding and expecting more, empowered by social networks and digital devices that are increasingly dictating how they engage, which can make it harder for businesses to keep up. They expect organisations to connect with them wherever they are, easily and securely, with an understanding of their individual needs.
Cloud and AI enable agility
Customer service tools have evolved greatly over the past few years as a result of big data, the cloud and artificial intelligence (AI) technologies. They have become vital components in enabling a next-generation customer experience as organisations seek to make holistic changes quickly, with limited to no downtime, and scale resources to deal with the unexpected.
For example, AI can help organisations use data to drive business insights quickly, make decisions faster, and become more agile. Using AI will also help optimise processes and streamline operations.
- Since the pandemic, 73% of customers expect to continue to incorporate different brands they’ve tried into their routines
- Increasing retention rates by as little as 5% could increase sales by over 25%.
- A positive customer experience can lead to a 10% to 15% boost in sales conversion rates, but consumers not only want a positive experience, 80% want it personalised.
II. Challenges faced in delivering hyper-personalised experiences
Technical debt
In many industries, businesses have significantly outgrown their IT environment. Some, for example, remain steadfastly off the cloud, making it difficult to leverage AI and machine learning capabilities. Leading experts discussed these challenges at a recent CIO roundtable hosted by Microsoft.
“Legacy businesses, trying to do this stuff is sometimes a different challenge to ones who are born in the cloud,” said Rob Smithson, who is head of business applications for Microsoft UK, said at the event.
For some organisations, the issue of technical debt came to light during the pandemic. As consumers rapidly shifted to digital services, this showed up structural weaknesses that negatively impacted the customer experience. For others, it revealed disorganised data architecture that led to incomplete or inaccessible analytics. Such data is vital for informing business strategy and enabling personalised experiences.
In a bid to overcome this debt, new issues can arise too. Organisations can find themselves rushing to develop and add new features, often making temporary trade-offs along the way, which can result in yet more technical debt that puts a strain on resources.
That’s why it’s critical that an organisation’s technology stack is built with a unified approach rather than simply reacting to customer expectations with one-off, siloed fixes. Technical debt isn’t inherently bad, but if it’s not properly managed, it can weigh heavily on an entire business – not just the IT department.
The back-end technology shapes the overall customer experience, which is why technical debt can get in the way of a seamless customer experience.
Data silos
Personalisation requires vast amounts of good data. But sometimes a company strands data in a silo, an isolated storage place inaccessible to the rest of the organisation. Similarly, data silos can occur when data is sectioned or compartmentalised in such a way that it is kept separate from other data assets, making it difficult to leverage for decision making and to create a complete picture of the customer journey.
These silos often arise from organisational silos – when solutions are designed in isolation and not with a common, coordinated goal. While it might seem logical for an IT team to use different systems and processes than the customer service team, and for the product team to use another set of tools altogether, this fragmented approach can create challenges when the company tries to deliver a personalised customer experience.
Customers, after all, see a business as a singular entity and expect a consistent experience, no matter which department they are dealing with.
“I think we’ve learnt a lot during the pandemic, such as how important it is that our systems work more collaboratively with each other,” said a representative from the travel industry at the Microsoft CIO roundtable. “We’ve now got a really different kind of strategy about how we integrate our systems, and it’s much more cohesive.”
“It’s all about consolidation and getting a single view of the customer, whether they come in physically or whether they come in via the website,” said another attendee at the roundtable. “So it’s really a case of trying to make sure we can get as much information to them as possible. We’re trying to make sure our systems talk to each other, and that seems to be the biggest challenge at the moment.”
Distributed workforce
Consumer habits aren’t the only thing that has changed due to the pandemic. The way most organisations function has too, with employees now splitting their time between the home and the office as a result of the widespread shift to remote working. Microsoft data shows that in 2022, hybrid work has increased seven points year-over-year (to 38%)[2], and 53% of people are likely to consider transitioning to a hybrid working model in the year ahead.
Not only has it become clear that hybrid working is here to stay, but for many organisations, it’s hit home that many pre-pandemic systems and strategies are simply no longer viable in the long term. For example, if information is not easily shared within a business, then it is difficult to harness a holistic and up-to-date view of customer interactions. That makes difficult to know precisely where each customer is in their engagement journey.
Other difficulties have also emerged as a result of having a distributed workforce. Some see a lack of communication as a big challenge to delivering effective customer service from home, while others have seen a lack of training as an issue in getting to grips with new technologies and systems.
Cost
Another hurdle for businesses looking to deliver personalised customer experiences is cost. Organisations suffering from technical debt might believe a “rip and replace” strategy is the only option, when in fact this would be unnecessary – not to mention costly and disruptive. Rather, it’s important that businesses get the balance right. The advent of AI means there are tools that will work with existing systems, and effectively collecting and making use of customer data doesn’t necessarily require brand-new systems.
Businesses instead need to think about getting the balance between what things can be automated and how they can leverage the power of AI and automation to help drive customer service.
It’s also important to remember that taking these steps can potentially increase revenue. Personalisation can deliver increased brand loyalty, but it has also been shown to drive impulse purchases and lead to fewer returns.
“We try and think top down ‘what’s the key data and how do we enable that data from an enterprise perspective, rather than on a case by case basis?’ said a representative from the IT industry.
III. Connecting lines of business while remaining secure
Another obstacle businesses face is balancing personalisation with data privacy. Meta’s recent data privacy lawsuit[3], in which the company was forced to pay $90M for its use of proprietary plug-ins to track users’ internet browsing on third-party sites, shows how serious the implications can be.
The new generation of consumers are more tech-savvy than ever before, which also means they value data privacy and transparency with utmost importance. A recent study has shown that 86% of consumers “care about data privacy” and want more control, and 79% of consumers are willing to invest time or money to better protect their privacy[4].
Organisations also have to ensure they are compliant with various data privacy regulations. Europe’s General Data Protection Regulation (GDPR) requires businesses to have the customer’s consent before they can capture, store or process any of their personal data. This means organisations must be prepared to answer questions about how, why, and when your it collects data from customers.
While this helps to meet the needs of privacy-conscious consumers, the challenge with improved privacy measures is that data is at the core of any great personalised experience. Unless you know something about your customer, you cannot truly personalise an experience in any channel – on your website, in your mobile app, through your email campaigns, or in your advertising.
“Our interpretation of data security rules are quite severe,” said one representative from the IT sector. “So therefore with some solutions, if data is not encrypted, we can’t use it. How do you how do you get to this heightened level of data security both with the data at rest and in transit? It’s proving a bit of a blockage for some of our work.”
“We started our transformation programme just before the pandemic,” said another representative from the travel industry. “We’re looking at chatbots, and we’re looking at speech analytics. The slowest part to mobilise has been our data stream because of some very explicit regulation. My challenge has not been to embrace the tools, it has been understanding the data as a result.”
While personalisation and privacy may seem hopelessly at odds, new technologies have made it possible for businesses to achieve both and thrive
IV. How to create the contact centre of the future
For most organisations, meeting customer expectations for hyper-personalised, secure interactions means improving the contact centre experience, both for customers and the agents who manage customer questions or concerns. Enhancing the customer experience requires advanced AI, automation, and security in the cloud while continuing to draw value from existing investments.
AI is fundamental to the success of the contact centre, can deliver personalised experiences, and can help organisations overcome many other challenges. It enables brands to connect with customers securely on voice and digital channels, reduce fraud, coach live agents, and automate the post-call wrap-up.
For those interactions that require a more sensitive or human approach, AI can serve to complement and augment human agents.
The cloud, too, is a vital component for a successful contact centre strategy as organisations need the ability to make holistic changes quickly, with limited to no downtime, and scale resources to respond to the unexpected.
Microsoft Dynamics 365 can help your organisation digitally transform your customer service by enabling omnichannel, personalised and seamless experiences.
Our platform enables you to transform all aspects of your customer service, from assisted and self-service channels, augmented with conversational virtual assistants, to a single agent desktop providing a single view of your customer that empowers your agents to deliver first time resolution.
Collaboration is also key in today’s modern hybrid working environment. That’s why with Microsoft Teams, we’re empowering your service agents to deliver faster resolutions by getting to the right person within your organisation faster.
Click here for more information about how Microsoft can help your business deliver the contact centre of the future.
Download our latest e-guide: Five Keys to Future-Proofing Your Customer Service Success and discover insights on how your company can ensure the best possible customer service experience in an ever-evolving business landscape.
[1] https://cloudblogs.microsoft.com/dynamics365/bdm/2022/05/04/how-to-foster-customer-loyalty-through-personalized-experiences/
[2] https://www.microsoft.com/en-us/worklab/work-trend-index/great-expectations-making-hybrid-work-work
[3] https://www.reuters.com/technology/metas-facebook-pay-90-million-settle-privacy-lawsuit-over-user-tracking-2022-02-15/
[4] https://www.cisco.com/c/dam/en_us/about/doing_business/trust-center/docs/cisco-cybersecurity-series-2021-cps.pdf
