From Automation to Personalization: How AI is Shaping the Future of CX
Would you be surprised to know that one out of every two customers would switch brands following just one bad customer experience (CX)?
This may sound too extreme to be true but it’s a fact. A study conducted by Emplifi found that almost 50 percent of American customers switched from one company to another after just one bad CX. This survey by Emplifi found that 86 percent of customers said that they will leave their favorite brand after only two to three bad CX.
For contemporary organizations, CX is everything! They must do whatever it takes to ensure they deliver exceptional CX to their customers. As per a study by PwC, 73 percent of customers say CX plays a key role in their purchasing decisions. But merely 49 percent of organizations manage to deliver a good CX today.
It wouldn’t be fair to blame all organizations for failing to deliver high-quality CX. That’s because the failure rate of CX programs is quite high.
Paul Hagen, a former Forrester CX analyst and the present head of Customer Experience & Innovation Strategy at West Monroe Partners, believes 75 percent of CX initiatives fail on execution.
However, the good news is, in the age of Artificial Intelligence (AI), contemporary organizations can leverage a wide array of tools and technologies to enhance the success rate of their CX programs and provide excellent experience to their customers.
In this blog post, we will discuss why CX is important for contemporary organizations, what are some challenges organizations face in delivering high-quality CX, and how AI can help businesses in ensuring CX.
If you are an entrepreneur or a senior professional in a customer-facing organization, this blog post can be extremely insightful for you. So, without further ado let’s dive right into the blog post. Read on and thank us later.
Why Is CX Important for Contemporary Businesses?
Before discussing anything about CX, it is crucial to know its importance for modern-day organizations in the first place. So, let’s explore why CX is indispensable for contemporary organizations.
1. Higher Revenue Growth
It would not be surprising to know that organizations that deliver good CX will witness high revenue growth. But to what extent, that’s the real question. As per a study conducted by Bain & Company, brands that deliver great CX can achieve four to eight percent higher revenue growth than the industry average.
2. Increase in Customer Retention
Can CX enhance customer retention? It surely can. As per a study by Zendesk, three out of every five business leaders agree that customer service improves customer retention. As per another study organizations that improve CX see a 42 percent increase in customer retention.
3. Higher Profitability
It’s natural that by improving CX, businesses will register higher profitability. According to an Emplifi study, 61 percent of customers will pay at least five percent more if they know they’ll get a good CX. Just imagine if a company has a hundred customers and 61 of them agree to pay five percent more in return for good CX, then it would enjoy considerably higher profits.
4. Outperforming Competition
When a company manages to win the loyalty of a substantial number of discerning customers, then it will not only enjoy a great profitability but also have a massive edge over its competitors. According to a Qualtrics study, companies that lead in customer experience outperform their competitors by almost 80 percent!
5. Enhanced Sales
There should be no doubt that superior CX leads to enhanced sales! The better a company delivers CX, the more products and services it is going to sell, and the higher volume of sales it is going to register. There are no two ways about it. A study by Bain & Company found that companies that succeed at customer experience increase their sales at a rate that’s four to eight percent higher than the market average.
Challenges Faced by Businesses in Ensuring High-Quality CX
For many businesses, kickstarting CX programs is easy but running those and ensuring their success is extremely challenging. That’s the reason why almost three-quarters of CX initiatives fail, as discussed earlier. Here are some challenges businesses face in ensuring CX.
1. Falling Short in Innovation
Legendary business icon Steve Jobs famously said, “Innovation is the only way to win.” How apt is that in the context of CX! Amazon’s founder Jeff Bezos said, “We innovate by starting with the customer and working backwards. That becomes the touchstone for how we invent.”
But when it comes to innovating for CX, how many businesses succeed? The answer is very few. As per a study, 63 percent of business leaders believe that enhancing brand loyalty means building innovative new CX. But less than 30 percent of CX leaders feel they can innovate properly.
2. Mismatch Between Brands’ Self-Beliefs and Customers’ Perceptions
It’s not uncommon for some brands to feel that they provide decent to good CX. But the problem is real when a majority of them believe that while the customers don’t feel the same.
As per findings by IDC and Emplifi, nearly 87 percent of brands surveyed rated themselves a 7/10 or higher, while 19 percent rated themselves a perfect 10/10 on CX! However, just 40 percent of customers rated brands 7/10 or higher while just 11 percent gave 9/10 or 10/10 rating. More than 60 percent of customers disagree that brands are providing a good customer experience!
3. Lack of Clear Ownership
One major issue businesses face with CX is the lack of clear ownership. Without clear ownership, CX initiatives are more likely to become disjointed, stagnated, and lead to ineffective outcomes.
According to findings published by SurveySensum, 54 percent of businesses face difficulty in assigning ownership of CX improvements to other departments. Data released by ServiceNow India CX Intelligence Report 2024 finds 44 percent of respondents believe that a lack of ownership and responsibility between departments is a major reason for customer service delays.
4. Lack of CX Metrics Programs
Just as CX programs and initiatives are important, CX metrics programs are equally important for the success of the initiatives. Metrics and insights, of any kind are important. To paraphrase noted management consultant Geoffrey Moore, without metrics companies are blind and deaf, wandering out onto the web like deer on a freeway.
But unfortunately, many companies don’t have the right CX metrics programs they need. And those that have don’t take action based on the metrics programs. As per recent stat just 11 percent of businesses have robust CX metrics programs. What’s more concerning is 62 percent of companies say the key problem is that they don’t take action based on CX metrics programs.
5. Failure to Keep Up with Global Standards
When it comes to delivering customer service and CX, companies no longer compete with their next-door competitors. But they find themselves pitted against business around the world. In the age of internet and globalization, that’s the only way there is and companies have to accept the reality.
That’s why it is not surprising that a majority of business leaders feel that their team must deliver world-class customer experiences. As per a research, 95 percent of business leaders believe CX teams must deliver world-class customer experiences. But when it comes to delivering world-class CX, only 30 percent of CX teams manage to do that.
Enhancing CX with HoduCC Omnichannel CX Suite: An All-In-One Solution for Modern Businesses
The Role of AI in Revolutionizing CX
The advent as well as rapid advancement of AI is a boon for all types and sizes of organizations, especially for the customer-facing ones. When AI is integrated into communication systems such as call center software or contact center software, organizations can enhance the way they provide CX by leaps and bounds. Here are some key ways AI can enhance CX:
1. Enhanced Productivity of Human Agents
AI automates a wide range of repetitive tasks, which enables human agents to focus on more complex and high-value tasks that require empathy and creative problem-solving. The result is enhanced productivity and improved operational efficiency. As per the findings of a recent study, AI increased customer service agent productivity by 14 percent. Companies that use AI tools achieve 3.5 times greater increase in customer service.
2. Transformation of Communication Systems into Omnichannel CX Suite
AI-powered tools and technologies can transform a communication system into a highly efficient and cost effective omnichannel CX suite. When organizations leverage AI for customer service optimization, the AI-powered chatbots and AI-propelled tools can provide new channels for customers. For instance, at HoduSoft, our HoduCC call and contact center software is powered by a wide array of AI features. As per a recent survey, nearly 80 percent of customers who have interacted with AI software for customer service had a positive experience.
3. Sentiment Analysis
AI can analyze customer feedback from various sources such as social media, reviews, and interactions to analyze customers’ sentiment, emotional state, and tone. It can be extremely useful in providing agents with real-time insights and recommendations. By understanding customer emotions, organizations can respond appropriately and address negative feedback as fast as they can.
4. Enhanced Innovation in CX Initiatives
As discussed in the challenges, many businesses face difficulty in innovating effective CX initiatives. That’s where AI can come to the rescue. AI-powered tools can be extremely useful in innovating, planning, and strategizing CX programs. By analyzing customer behavior patterns, AI can help businesses predict future customer needs and proactively address them. That’s the reason AI integration in CX is on rise. A recent study revealed that AI integration in CX has seen a 45 percent increase over the past few years. It’s projected that by 2025, 95 percent of customer interactions will be powered by AI.
5. Robust CX Metrics
AI can not only help organizations accessing key CX metrics but also taking correct actions as per the metrics. By collecting and analyzing large sets of customer data, AI-powered systems can help businesses understand customer behavior, preferences, and pain points more deeply as well as extract actionable insights. When organizations take the right action, they can improve customer satisfaction, foster loyalty, and drive operational efficiency.
Taking Everything Into Consideration,
Since time immemorial, evolution in technology has always transformed businesses of all types and sizes. Not just that, it has always added value in the lives of customers. Always.
The advent of generative AI marks an epochal shift in the way contemporary organizations deliver CX. Over the past few years, AI has proved to be invaluable in enabling modern-day businesses to deliver CX.
In the near future, it is going to play a massive role in transforming CX and ushering a new era of customer service and experience! If you want to be future ready, it would be prudent to explore the exciting opportunities AI has to offer.
At HoduSoft, we have helped several organizations in enhancing their CX with our AI-powered call and contact center software and omnichannel CX suite. Contact us today to know more about our solutions and to book a free demo!
