Customer experience has taken a back seat to cost cutting, declines in service and inflation and it's unclear whether new technologies such as generative AI can bail enterprises out.
That's my take on the Accenture Life Trends 2024 report, which is a handy read on macro and cultural trends. While Accenture's report focuses on consumers, the points about customer experience can easily apply to enterprise technology. Enterprises have been passing costs on to customers, but we're reaching the point where that's no longer going to fly.
Here are a few points from the Accenture report as well as my take and related reports Constellation Research.
Profit priorities trump customer experience. Accenture found that 37% of people worldwide think many companies are prioritizing profit over customer experience. And 40% of CxOs say they plan to raise prices to pass costs to customers. Accenture's report also found that customers feel less valued by poor customer service.
My take: CX is critical but it's clear there's going to be a widening gap in companies that keep it a priority. The idea that profits follow customer experience was fine when growth was easier to come by. Now efficiency is the mantra amid higher interest rates and margin squeezes for companies. Companies taught consumers that they should value something more than a mere transaction. Most surprising thing to me: Consumers apparently bought into the idea that brands were about more than the transaction. Follow the money people.
Here's the conundrum: Enterprises across all industries will have to become way better at customer service and do it cheaply. Related research: Connecting Experiences From Employees to Customers
Generative AI to the rescue--maybe. Accenture, which by the way will make a lot of revenue from consulting on generative AI projects, said conversational interfaces will change the game for digital interactions. Generative AI could be known as the great customer engagement enhancement. Accenture found that 39% of people aged 18-34 are excited about conversational answers over standard Internet searches.
My take: Accenture expects large language models (LLMs) to change the relationship between people and brands and I'd agree. What's unclear to me is whether the enterprises behind the big brands have the data to offer something unique with an LLM. Even more unclear is whether enterprises will be able to navigate internal silos to make sales, marketing and service cohesive. And even more unclear is whether vendors can provide a generative AI magic bullet with fun names, domain specific LLMs and add-ons that add up.
Humans are getting wise to technology's pitfalls. Accenture noted that nearly a third of consumers say technology has complicated their lives as much as simplified it. The upshot is customers are tightening the reins on tech use by removing notifications, limiting screen time and removing apps.
My take: It's about time someone followed me and put their phone on silent. Brands will have a tough time adapting if consumers decide to prune digital channels. However, you can color me skeptical about humans downgrading their tech relationships. What people say they do with technology is vastly different than what they actually do. The notifications are still in charge.
Constellation Research's take
Constellation Research analyst Liz Miller said:
"While the report recasts the customer experience dilemma in the new extreme brightness that is generativeAI, it fails to issue a stark warning: None of these tools will solve for inauthentic, poorly crafted and value-less engagements. The reality of customer experience, even before the boom of GenAI, is wrapped in that adage: Garbage in, Garbage out. All AI will do to this process is accelerate the capacity to deliver, ignore and dispose of the garbage.
What far too many brands get horribly wrong is they believe Customer Experience is a technology, a function or a mantra that can be distilled into a pithy wall cheer like “Be Customer Obsessed!” If that is what CX is to a brand, no AI, no data, no technology stack can save CX…and in total blunt talk, that type of wasted budget should be cut.
CX is an enterprise-wide team sport that so deeply understands the customer and the decision glidepaths that bring that customer into a posture of durable profitability that the only decisions that can be made are those that work in the service of either accelerating or deepening that lasting bond between brand and buyer. CX isn’t customer service. CX isn’t marketing. CX isn’t packaging. CX is all of this and more. CX is the durable, profitable, authentic, and contextual relationship between a brand and its customers, partners and the market.
Without a true customer experience strategy that is embraced by the entire organization, orchestrated and connected by data and customer intelligence, no amount of GenAI can save that bottom line. Cost cutting will be the only path to survival. But, if an organization has thought of CX as more than a rallying cry of convenience, more thought and attention can be paid to HOW generativeAI can address including those conversations around why that ice cream bar is just a bit smaller now or costs a little bit more."