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Frost & Sullivan White Paper
Today’s economy is driven by the ability to apply intelligence in the acquisition of products and services. The intelligent economy is based on real-time access to information and insights about company, product, and service offerings. This results in newly empowered customers who now have the unprecedented ability to impact business success. Here are some examples:
- Many customers research on their devices while simultaneously interacting with contact center service agents, sales reps, and store and counter associates
- Retail customers now commonly comparison-shop while inside stores—an activity known as showrooming—while sharing with their peers on social media and obtaining their feedback
- Increasingly popular Internet of Things (IOT) connected homes enable homeowners to remotely adjust temperatures and turn on outside lights.
With comparative and competitive information available instantly, businesses can no longer compete simply on features, price, or one-time “wow” customer service experiences. Today, customers increase or decrease their purchases, or recommend or dissuade others via social media, based on their acquired intelligence combined with their collective service experiences. These empowered customers then leverage their knowledge to obtain products and customer service on their terms, rather than accept the first offer.
Accordingly, this propensity to research and compare has made consumers less likely than in the past to want to be contacted by businesses first. In fact, they are often proactive, contacting sellers with detailed questions and ready to make purchases, with product or offer knowledge that exceeds what service agents are given in training. For that last reason, along with greater speed, existing customers also try to troubleshoot and self-serve before contacting businesses to resolve issues.
All of these attributes and characteristics of intelligence-driven buying, loyalty, behavior, and empowerment are the hallmarks of the Millennial generation, who are now becoming the consumer and business buyer mainstream, and who are influencing the other demographics.The Millennials are the first generation able to obtain knowledge and spread their influence in real-time via smart mobile devices. They also have been raised with high self-esteem and self-worth, and consequently with the expectation that the world focuses on them. As a result, they are less likely to accept “wait,” “no”, and poor service than their predecessors.
Above all, Millennials are very comfortable with automated technologies, such as self-service checkouts and artificial intelligence (AI)-driven chatbots (or bots) and virtual assistants (VAs). By the same token, they have a much higher expectation of superior service from companies. Customers will expect service agents to know their account details, and purchase and service histories, without the need to repeat it every time they contact that company. Agents should have as deep (or ideally deeper) knowledge of their company’s offerings than the customers who self-serve online. And they need the ability to customize offers to fit each customer’s wants and needs.
Other generations now want and expect personalized customer experiences and they are becoming adept at using the same tools.They also want to remain relevant in their jobs to forestall being replaced by Millennials and the generation behind them.
The Growing Power of the Empowered Customer
As a result, businesses now have to handle a much more informed consumer and business customer than in the past. Additionally, several other critical macro factors are strengthening the hands of the empowered customer:
- Slowing North American (U.S.1 and Canadian2) population growth, leading to slowing consumer market growth.This trend favors consumers as businesses can no longer take them for granted and assume that there always will be new customers to replace those who have churned. The U.S. Census Bureau points to declining fertility and decreasing net international migration rates3. Meanwhile, mergers and acquisitions reduce the number of business buyers while increasing their buying clout. To achieve meaningful growth, businesses have had to tighten their focus on building relationships with their existing customers.
- According to Frost & Sullivan research, there is a growing income divide and declining median incomes4 that will place more buying power in the top tier of the population. The upper echelon customers typically have higher education, work in professions and management, and have superior access to technology and the ability to use it, as compared with other demographics. All told, these factors have given these consumers a great sense of empowerment. They know their high value, and they will insist on receiving superior customer service.
- More products are becoming commoditized, interchangeable, less “sticky,” and available on demand and for download. At the same time, thanks to intelligence, innovation cycles have shortened dramatically, with copycat competitors and products appearing almost instantaneously. Meanwhile, prices are becoming transparent, which enables accurate comparison shopping, particularly at the point of sale (POS). Social media enables customers to share product feature and pricing information, along with their customer experiences (i.e. social sharing), in real-time to an expanding universe of existing and potential buyers. Consequently, customer service is now the prime business competitive differential.
- IoT-enabled products are growing in number. According to Frost & Sullivan research, there will be 50 billion connected devices globally by 2020. Moreover, 67% of U.S. consumers plan to buy in-home IOT devices by 20194. However, to fully benefit from IOT, products require increased customer understanding and engagement. For example, consumers have had to be more conscious of the need to change default passwords on their devices to lower the risk of hackers gaining access to them. At the same time, IOT enablement can reduce service and support costs through early detection of issues. But they add a new layer of complexity; when they do not work, they must be fixed by expert support staff.
What Empowered Customers Seek
Today’s empowered customers expect products and services that exceed their brand expectations for quality at the prices they believe they should pay. They want their business interactions, whether asynchronous (those that take place over time, such as with appointments or callbacks) or in real time, to be intelligently connected as conversations with context across channels. Living in a mobile world, they expect instant access to information and quick resolution to issues. However, they don’t mind if those interactions are asynchronous through digital channels, such as SMS or chat or in real time, or waiting to converse with subject matter experts (SMEs), as long as they are satisfied with the results. In short, customers seek excellent omnichannel customer service experiences, even if that means they have to wait.
Customers know that companies have access to intelligent tools to meet their expectations, based on their prior experiences with them. Consequently, and understandably, customers have little tolerance for substandard customer service.
As a result, businesses need a new strategy to engage with customers. And that is to provide what they seek, which is intelligent service (IS) rather than transactional, impersonal service that has been designed for the masses and not the individual. Intelligent Service is the practice by which businesses constructively, proactively, and productively engage with them, with personalized service, on their customer journeys. It is channel and device agnostic. It uses technologies such as AI, machine learning and big data to assist customers in getting the answers and help that they need in self-service channels, as well as to assist agents in getting customers the assistance they need quickly and accurately.
The Final Word
1U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau,“Projections of the Size and Composition of the U.S. Population: 2014 to 2060”, March, 2015
2Statistics Canada "Population Projections for Canada (2013 to 2063), Provinces and Territories (2013 to 2038)" ,September, 2014
3Ibid.“Projections of the Size and Composition of the U.S. Population”
4Frost & Sullivan,“Future of the United States”, January, 2017