The evolution of customer service

​Within the next few years, everything you know about customer service is going to be obsolete by new technologies and channels.

Or is it?

Looking beyond the hype

The basics of customer service - the essential elements of what customers need and value, and their expectations based upon these fundamental needs - will remain remarkably persistent and consistent. Customers will still require organizations  to be efficient, polite, know their name and take responsibility when things go wrong. These elements will continue to form the foundation of good customer service, but the edifice of the service experience built upon these foundations will be far more idiosyncratic and more dynamic. This will have profound impacts on how businesses manage the service experience in order to meet evolving expectations from both customers and employees. 

A new breed of customers

Within in the next 3-5 years, there will be a change in the notion of ‘customer’, resulting from the separation of the entity contacting the contact center for service and the customer themselves. For example, the rise of IoT will see smart objects automatically asking for support and help, with this support being provided by smart bots who will apply known fixes, run diagnostics and search knowledge bases for answers or resolutions. Escalation to human technicians will occur if the smart bot cannot resolve the issue. The human owner of the smart objects may be notified, if appropriate, of any action taken, in the channel they have requested such notification to take place. Thus support will no longer be a human-to-human interaction, or even a human-to-bot interaction; it could involve no humans – other than reporting the resolution to a human owner.

Thus there will be a distinction between the entity paying for the service and the entity receiving the service, which will also be apparent in the scenario where the ‘customer’ is a third-party company that has outsourced service provision and is paying the provider of service to support its customers.

Vertical market difference

Vertical market differences will still persist in 2025 due to unique requirements (for example, as mandated by regulators or enshrined in law) and because they will concentrate on, and prioritize, different aspects of customer service. However, in general customer expectations of service are set to rise across all verticals. By 2025, customers will have zero tolerance for sub-optimal service, as they will be even more informed about the reality of service, have far higher expectations, be empowered by social sharing, and be more willing and able to shift supplier. Perceptions of service performance will also commodities far more rapidly with an innovation quickly moving from exceeding expectations (delighting customers) to meeting expectations (satisfying customers) to being below expectations (creating dissatisfied customers).

In the past, companies could claim exemptions from high levels of service based on the special conditions of the vertical they operate in, or because of lack of competition, arguing it was only necessary to perform at or above the norm for their industry. This customer service ‘get-out clause’ is already under pressure in 2016 and will be unstainable by 2025. This is because what customers perceive to be good service will increasingly become vertical-agnostic and be driven by the highest performing companies in the most advanced verticals. The level of service these companies deliver will become ‘the new norm’ for all companies across all verticals. When a company delivers enhanced service levels, customers will be alerted to what’s possible to provide and begin expecting this level of service from other companies - irrespective of the vertical in which they operate.

Moreover, the time it takes for service excellence to be heralded, championed, copied, expected, commoditized and obsoleted will be far faster than in the past, due to the social, hyper-connected nature of the Digital Economy. Customers will share excellent examples of service with friends and strangers across a variety of media – alerting other customers to the very best and worst experiences and, in the process, informing other companies of new developments in customer service and which ones resonate with customers.

The Digital Economy

The Digital Economy will essentially provide a huge sandbox for ideation, experimentation and delivery of new service paradigms. It will not only continually fuel expectations but also enable those companies who are listening out for new ideas to source, copy, adapt and deliver them rapidly – speeding the innovation-to-commoditization lifecycle.

The increasingly vertical-agnostic nature of customer service was underlined by companies we spoke to as part of the research for this paper, who told us that they survey a range of vertical markets to see which ideas they could adapt and build upon.

Service innovation will therefore be like a pebble dropped into a pool, with excited ripples of social sharing which rapidly spread the idea, excite customers and then eventually fade – only for another idea to the be dropped in the service innovation pool . This rapid widening of expectations will hold true both across verticals as well as in terms of geographical markets, as the internet platform continues to ‘flatten the world’ and enable customers to experience service from a much more geographically-diverse range of companies.

While cultural variation in terms of what is perceived as ‘good’ service will persist, this will gradually become less distinct and more homogeneous as customers sample service from more diverse locations, and businesses in search of novel ideas shamelessly borrow new ones from wherever they find them.

And, while evolution of customer service expectations is frequently linked to age or, more specifically, to the generation that a customer belongs to, companies are warned not to over-simplify their approach as this will create customer service fallacies and sub-optimal experiences. Within any generation there is considerable variation in terms of what customers want or expect, and how they wish to interact with companies. Likewise, generational behavior shifts constantly and, while older generations may take longer on average to embrace new channels, technologies and behaviors, what they accept as ‘normal’ or ‘useful’ is not fixed.

Generation Y to Z

Thus younger generations may be a larger proportion of early adopters and the early majority – acting as change drivers in terms of expectations and behaviors because of their increased willingness to take risks and try new things – but companies are advised not to become too obsessive about generational behavior or see it as standard or static. They should be wary of making assumptions that turn out either to be untrue for the individual or are based on transient factors. In fact, a much more sensible strategy is to take a more personalized approach to service, which is informed not by assumptions but by data on an individual customer’s behavior, needs, habits, values and emotions.

By 2025 companies will have become far more adept at collecting, combining and leveraging customer data – including being able to utilize this in real-time and in context to gain more meaningful insights into customers, drive more innovative experiences and expectations, and open up new revenue opportunities.

Instead of making broad assumptions about customers, companies can utilize a more analytical-based approach to deliver a deeper and more enriched level of service by understanding individual customer needs and preferences, and utilizing both historic and real-time data from a variety of sources to deliver a personalized service paradigm. Businesses will marry this insight with their own goals (which might be to minimize costs, raise satisfaction or retain more customers, for example) to deliver a far more sophisticated approach to service.​​
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