In 2024, customers and organizations have a lot in common: both are heavily influenced by reduced budgets and increased competition in the marketplace, and both are looking at how to get the most value out of their interactions with each other.
In this interview with CX Network Sam Richardson (pictured below), customer engagement consultant for Twilio, explains how organizations can adapt to these market conditions by strategically embracing technological advancements for personalization, engagement and creative problem solving – and she explains what needs to happen to customer data in order for such advancements to deliver a return on investment (ROI).
CX Network: CX had a challenging year in 2023 with reduced budgets, lower customer spending and dozens of advanced new tools entering the market. Research in recent months has also confirmed that customer satisfaction is in decline in some major markets. Where should CX practitioners focus to drive the greatest results in 2024?
In 2024, organizations’ understanding of powerful technologies such as AI, and the role it can play in their operations, will continue to develop and mature. For example, our research shows that currently only 34 percent of organizations in the UK are putting customer engagement at the heart of their AI strategy. In fact, nearly all respondents in this research listed greater operational efficiency (57 percent) and organizational growth (56 percent) as the key drivers behind their AI adoption and investment.
Although worthy priority areas in their own right, there is work to be done to ensure investment is actually delivering on consumer needs, too.
However, brands cannot put all their eggs in one basket with AI; they need to understand that AI is just one tool to support a broader engagement strategy, not the one silver bullet to success. A strong tech stack is an essential foundation in any brand’s customer engagement offering and should therefore be a significant focus area for the year ahead.
Elsewhere, brands should also stay cognizant of challenges and pressures customers today are under. In a tough economic climate where we have more choice than ever before, value is prioritized over almost all else. Whether it Is products, services, or experiences, people are focused on getting maximum benefit and satisfaction from every penny spent.
With our research finding 31 percent of consumers feel more indecisive about what they buy compared to three years ago, in 2024, brands need to listen, learn, and show understanding for their customers’ evolving circumstances, rather than always opting for ‘hard sell’ tactics.
In a public sphere saturated with brands all competing for attention and loyalty, they also need to go above and beyond to stand out from the crowd – and providing memorable experiences that ‘surprise and delight’ their customers will be key to that.
Unfortunately, we found only 29 percent of UK consumers are regularly made to feel special, so brands need to address that.
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CX Network: Whether it’s for personalization, business operations or other uses, customer data is crucial to CX, yet there are major changes on the horizon around the collection and utilization of it. How would you assess the use of customer data at present?
Sam Richardson: The phase-out of support for third-party cookies in Chrome is a pivotal moment for brands when it comes to customer data, with many at a crossroads in terms of the future strategy to take. Going forwards, brands will need to start relying on first-party data they collect themselves to deliver personalized and engaging experiences.
First party data – i.e. data consensually given to brands by their customers or generated by their interactions with them – not only provides the most valuable and accurate insights to power personalized experiences, but will soon become a non-negotiable for marketers.
Worryingly, our State of Customer Engagement Report found that only five percent of brands currently use entirely first party data in their marketing strategies.
If used in the right way, AI will be an enabler of data-driven personalization. However, AI technologies will only demonstrate ROI from a personalization perspective if organizations get their data in order first. Brands need to have the capability to not only collect customer data and store it in a way that’s unified, accessible and easy to understand, but also filter and sort this data to ensure brands can leverage quality insights.
AI can then come in to interpret this data and personalize engagements on an individual basis. And we’re not just talking about sending ‘Happy Birthday’ messages and addressing customers by their first name, but tailored, AI-enabled offers and product suggestions that are relevant and contextual, ensuring they resonate much more with the customer in question.
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CX Network: What are some of the most under-utilized sources of customer data and how can practitioners leverage these?
Sam Richardson: Voice calls are an increasingly valuable source of customer data that many may overlook. Twilio’s AI-enabled Voice Intelligence, for example, is not only able to transcribe calls, but can identify, extract, and interpret signals from voice interactions in real time. Not only will this contribute to helping brands further build upon their customer understanding, but this data can be exploited across all parts of the business, enabling marketing and customer experience teams to further personalize customer engagements.
That being said, every engagement channel should be viewed as a source of insight to better understand customers. Past purchases, conversation styles, communication preferences, and previous context can be unearthed from interactions via chatbots, online chats, voice interactions, WhatsApp messages, emails – you name it! While this may sound like a huge manual task to collate and leverage, AI-fueled Customer Data Platforms (CDPs) can automatically pull this data to build unified and detailed customer profiles.
This intelligence can then inform everything from tailored offers, through to real-time insights delivered to customer service teams whilst on a call or chat, creating relevant and accurate personalization and a deeper customer understanding than ever before.
CX Network: How do you expect the use of generative AI in CX to develop over the course of the next year?
Sam Richardson: Generative AI brings such potential to transform experiences. This is the year that brands should be using the technology towards creative problem solving, in order to address customer grievances.
Whether this is improving customer engagement, providing greater efficiency, or delivering value to customers – these are all tangible areas where customers will notice and appreciate the impact of Generative AI in 2024.
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CX Network: In light of everything we have discussed, what are the key skills CX practitioners and their teams will need in 2024?
Sam Richardson: CX Practitioners need to better understand their customers, get back to what the real customer issues are, and work out how to solve them. This will require increased collaboration across the business to make sure they're creating meaningful, tangible change, not just moving the needle on a customer satisfaction score.
CX practitioners will also require agility over the next year, and an ability to quickly react and pivot in response to emerging trends, technologies, and global pressures. This will ensure that they are not held back by legacy tools, and that they can respond to market trends in real time.
When it comes to emerging technologies, brands need to take stock and ensure any action they’re taking is on the basis of thorough research, consideration, and testing to ensure they are truly worthy investments for the long-term – rather than just jumping on the bandwagon.
Tools that brands decide to onboard should also offer the solutions that their customers actually will use and want.
The value of showing basic empathy and understanding also shouldn’t be discounted in 2024. These attributes will ensure brands resonate with customers, remain ‘human’ in their approach, and avoid backlash around insensitivity in the tone they’re striking.