An evolution of customer experience (CX) was to be expected. Throughout modern history, organizations have encountered internal and external challenges that changed how they interact with customers and how customers view those organizations.

Advancements in technology mean customers can order virtually any product and receive it in less than a week. For software solutions, they can get access immediately and often in a seamless experience.

Across arguably every industry, business leaders view a great customer experience strategy as a key differentiator. Brand loyalty, already on the wane, became even weaker due to the pandemic. For example, McKinsey found that 50% of consumers reported they would switch brands if their preferred brand was unavailable due to shortages.

Customer needs changed. Customer retention is difficult to keep high. Today, providing a positive customer experience is more of a challenge, or more of a critical need, for companies. To achieve this, more organizations must prioritize being customer-centric.

How we arrived at this CX environment

Early days of retail

Before mass media, it was harder to know what other products were available outside of the ones offered by the local store. Before globalization, it was more difficult to purchase products from far-flung locations. Many customers were limited to the goods and services in their near vicinity. And if something went wrong with a product that could be fixed, they would go to a local mechanic. They likely had strong ties to their local merchants and trusted their opinions on which products they should buy. They were much less likely to have any meaningful relationship with the product manufacturer unless those products were made and sold locally.

As a result, brand loyalty was stronger and customer preferences changed less frequently. Today’s customers, however, have a wide range of options and are less loyal due to several external circumstances. It is harder to maintain customer satisfaction and increase customer loyalty.

The Internet and rise of e-commerce

It is no overstatement to say the Internet changed everything about business. Consumers could learn about new products and services without leaving their homes or turning on the TV. They could start shopping online and buying products directly without leaving their homes. For product manufacturers, this is perhaps the biggest leap forward for customer experience. Previously, their direct customers were mostly retailers or resellers, who sold to the end users in store.

Being able to sell directly to customers meant many of these companies had, for the first time, direct relationships with those end users. They could more directly influence customer loyalty beyond the quality and price of their solutions. They were more directly responsible for offering memorable experiences and providing customer support. And thanks to online metrics, specific customer feedback, and data analytics, these retailers had more information about their customers than ever before.

Increasingly organizations expanded what they offered. Look at Amazon, which started with books and moved into virtually everything else. Long-standing UK pharmacy Boots saw its website visitors rise from 7,000 people a minute to 19,000 during the pandemic, so it needed upgrade its entire infrastructure and tools. It turned to IBM to provide the solution, enabling Boots to easily handle, at peak, over 27,000 visitors without an issue.

Customer journey mapping

The customer journey is more complicated. Today, a customer could be influenced by one channel (e.g., out of home) and make their purchase through another channel (e.g., a mobile app). This omnichannel revolution means organizations must monitor multiple customer touchpoints and better understand which mediums feature more customer interactions. This means organizations need to devote more resources to improving their SEO, mobile apps and social media presences. They need to determine where they should spend their advertising dollars to reach the most persuadable prospects and create an organic inbound engine to capture them.

Consumer advocacy

The rise of social media platforms, chatrooms and message boards gave consumers a voice. They became more willing to express their interests and frustrations with brands, creating a scenario where those organizations needed to monitor conversations and triage responses based on the issue and the influence of the consumer. In some respects, this has given organizations valuable insights from real-time market research and customer feedback loops. But it also raises the bar for what organizations need to do to meet customer expectations. That extended the responsibilities of contact centers and social media or PR teams to respond in real-time.

Segmentation

The rise of cookies, digital media and third-party tracking created personalization and segmentation. This enabled organizations to send individual customers messages that felt tailored to them. Now organizations try to improve the user experience on their website by organizing information based on individual consumer preferences. Social ads can target specific users based on demographics. And they can segment which audiences they target based on purchasing power. A recent IBM Institute for Business Value survey found 57 percent of respondents said meeting customer demands for more personalized experiences was their top reason for adopting AI.

The next wave of technology driven CX

We’re entering a new age of customer experience driven by digital transformation. New technologies like artificial intelligence (AI) and machine learning (ML) will drive automation and further enhance the CX suite. Chatbots using generative AI and natural language processing will encourage more customers to use self-service tools for their simplest problems. That frees up human customer service representatives to focus on the biggest issues that can create happier and more loyal customers.

AI will power predictive analytics that will help organizations understand better when customers may have an issue or when it would be an opportune time to reach out to them. Organizations that can create compelling customer experiences can use virtual reality (VR) and augmented reality (AR) to show potential customers a facsimile of their services.

Customer experience will continue to evolve

The future of customer experience is bright. Providing a positive customer experience can become a competitive advantage. IBM can help enterprises apply trusted AI in this space for more than a decade. Generative AI has further potential to significantly transform customer and field service with the ability to understand complex inquiries and generate more human-like, conversational responses.

IBM puts customer experience strategy at the center of your business, helping you position it as a competitive advantage. With deep expertise in customer journey mapping and design, platform implementation, and data and AI consulting, IBM can help you harness best-in-class technologies to drive transformation across the customer lifecycle.