For the last four years, in and around December, I have compiled a set of customer experience-related predictions for the coming year.
For each article, I gather together a set of predictions that have been sent to me over the preceding month. I then select the ones that stand out and make the most sense in the current context, arrange them into themes, and add a bit of commentary.
This year I received 82 different predictions on various experience-related topics. This is up from around 60 last year.
Now, last year’s predictions were compiled on the expectation that we were emerging into a period of relative stability after two years that were dominated by the effects of the pandemic.
The relative stability didn’t materialize, and 2022 has presented its own unique challenges.
As such, brands have had to adapt yet again to a changing and challenging environment, and while I could argue that we have seen some progress over the last year, it’s probably fair to say that we have not made as much progress as we would have liked.
Next year looks set to be another challenging year as economic uncertainty persists.
The predictions I have selected bear this in mind.
So, without further ado, here goes with 2023’s predictions:
1. Customer behavior continues to evolve. That’s not a surprise. However, rising customer expectations, the demand for accountability and how to integrate audio messaging into customer service, in particular, are worth paying attention to.
Barry Cooper, President, CX Division at NICE, predicts:
“Digital adoption has been a dominant lifestyle force over the past decade, accelerating in importance in the past 2 to 3 years. [In 2023] The CX scales will tip, with more than 80 percent of customers starting their journeys through digital channels rather than in-person interaction.”
Vasili Triant, COO at UJET, adds:
“A few years ago, people would look up info on their phone out of convenience, but then get their laptop to actually do something – like make a purchase, book a flight or hotel, etc. However, companies have evolved their e-commerce capabilities and optimized for the 6-inch screen. Customer service providers need to keep pace. Brands must communicate via text, picture, or video depending on the situation and their customers’ preferences, blend multiple forms of communication into one efficient conversation without losing context, or collect information via chat before transitioning to a phone call, so their customers quickly get the help they need. Focusing on mobile technology will also enable brands to verify customer identity with face ID or fingerprints – technology that consumers use on a daily basis.“
Colin Crowley, CX Advisor at Freshworks, points out that:
“Voice memos are one of the most popular ways Gen Z communicates, with a third saying they prefer it over text messages. Gen Z makes up nearly 40% of the U.S. consumer base, so it’s key businesses jump on the voice memo bandwagon to meet the needs of this demographic. In 2023, we can expect to see early signs of audio and video in customer support – from businesses prompting customers to record short videos or audio recordings to explain issues they’re having, which will then be transcribed and submitted to a support agent.”
Finally, Peter Graf, EVP and Chief Strategy Officer at Genesys, adds:
“Customer experience will be on public display (and measured against competitors) in the future. When the Department of Transportation unveiled its new Airline Customer Service Dashboard earlier this year with the goal to improve air travel, people noticed. After just one year of headline driving bad service, the accountability provided a much need change for the airline industry and its customers.
After years of putting up with fragmented experiences and mediocre customer care across industries, the dashboard serves as a pivotal moment in consumer expectations. It’s only a matter of time before customers rightfully demand similar accountability in other sectors. With clearer measurement of their customer experience against competitors, organizations will have no choice but to fundamentally shift strategies from just meeting inbound service needs to proactively orchestrating great experiences.”
Comment: Although many leading brands are struggling to keep up with rising customer expectations, they continue to work hard to align themselves with their changing behaviour to understand, engage, serve and delight them. Why? Because they know that it is worth it. Others are reputedly scaling back their CX efforts. Make of that what you will.
2. Investing in CX is vital, but investments must quickly deliver clear business benefits, or they will be axed.
Gregg Johnson, CEO at Invoca, predicts that:
“As we face economic uncertainty and a turbulent market ahead, executives are becoming more disciplined about technology investments and overall spend to ensure all expenditures deliver ROI. In 2023, businesses will need to squeeze every incremental dollar possible out of marketing budgets, contact center teams, and technology investments.”
“In the last six months we have witnessed companies significantly tightening budgets and scaling back on investments. Profitability is more top of mind than it ever has been. As these financial headwinds continue into 2023, CIOs will reevaluate and recalibrate what they are making bets on, ensuring value in the investments they made/will make. If the investment hasn’t provided 3x value, critical review is needed.”
Finally, Annie Gendreau, Director of Experience at Valtech, warns:
“In 2023, with the recession and ongoing inflation, many businesses will be afraid of spending. As a result, investments in Customer Experience (CX) will likely be on the chopping block. This is a major risk. Cutting back on CX projects and investments will be more destructive than helpful. Today, people are looking for exceptional experiences from their chosen brands and from their workplaces. Good CX is about both client and employee experience. The brands who continue to put human realities and needs at the center of their decisions and investments will emerge stronger.
Instead of cutting investment, double down. Make sure your executive teams stay closely tied to your CX departments. From employee experience to omnichannel brand experiences, the onus will be on CX teams to measure and relay the business impact of their initiatives. Aligning across teams will help companies avoid silos while working to satisfy and delight their highly complex and always evolving customer base. Investments in CX, despite the economic context, will be a lifesaver.”
Comment: In an uncertain and tightening economic environment, delivering a great customer experience becomes even more critical as customers become more discerning about where they spend their money. Leaders know this but also know that budgets are under pressure, so their investments must deliver tangible business benefits and fast.
3. Leading brands will decide not to wait for Google to sunset third-party cookies and will start to get their act together on personalization by leveraging their first-party and, increasingly, zero-party data.
Suzanne Steele, VP & MD UK, Ireland, Middle East and Africa at Adobe, predicts that:
“Our recent Make it Personal research has shown that consumers’ preferences are evolving and changing all the time. An approach that relies on broad generalised demographic segments like “Millennial” and “Gen Z” is no longer working, and people increasingly want to be engaged and recognised as the unique individuals they are. However, with 1 in 10 saying they think brands aren’t doing this well, it’s clear that more needs to be done.
As we head into 2023, with the additional pressure of a cost-of-living crisis, customer loyalty and trust will be more important than ever. To ensure they build that all-important trust with their customers, brands will need to focus on delivering these more tailored, thoughtful and empathetic experiences. In order to do that effectively, brands will need to take a data-led approach, building up a better understanding of customers’ changing wants and needs and acting on that information in real-time. Luckily the technology to do this already exists, and by investing in it now, brands can better understand consumers, build greater trust with their customers, and retain the loyalty that will enable them to weather the storms ahead.”
Tara DeZao, Director of Product Marketing for Martech & Adtech at Pega, adds:
“In 2023, we’ll see organizations using AI more than ever before, particularly with their first party data. While the threat of the sunsetting of third-party cookies continues to get pushed out (as of now, we’re looking at 2024), brands in the know are busy preparing ways to maximize their most precious resource – first party customer data – as soon as possible, regardless of this looming deadline. Additionally, with an impending recession, it’s going to be more important than ever to have smart, empathetic, and helpful interactions with customers, and that’s done by intelligently analyzing and making decisions based on customer data – including context and history – to understand and meet them exactly where they are on their journey. Economic downturns are prime for customer churn, so one wrong or insensitive interaction can send customers running for a competitor, and marketers need to (and can) do better.
Virtually every brand has some technology implemented for collecting and storing customer data. But it’s activating that data that’s going to separate the leaders from the laggards, and we’ll see a lot of this in the year to come. Customers move quickly through their buying journeys, often pivoting and changing course in an instant. The only way for brands to keep up will be to infuse AI and decisioning into their data strategies. Understanding a customer’s propensity to buy based on their behavior and quickly acting on that data in real time can be the difference between making a lasting impression or losing out to a competitor.”
Sai Koppala, CMO at SheerID, goes further and says that:
“During the coming year, I think we’ll see zero-party data increasingly become a more meaningful part of marketers’ tech stacks. Zero-party data improves on the promise of first-party data because it allows organizations to give customers exactly what they want, earn their trust through transparency, and get ahead of privacy regulations.
But, it’s also true that the majority of brands are struggling to put it to good use. In a survey that SheerID conducted with Forrester Consulting, we learned that while 82% of marketers have access to zero-party data, 42% admitted they don’t know how to effectively use it. Another challenge of implementing a data strategy based on zero-party data is that getting that information at scale isn’t trivial. Collecting zero-party data presents the challenge of persuading customers that providing their information is worth their while.
But, I think we’re approaching a “crossing the chasm” moment for zero-party data. Marketers are learning how to integrate zero-party data collection seamlessly into the customer journey. In other words, make data collection about better serving the customer, not just providing the company with more data.
For example, we’ll see more ads that, instead of simply increasing awareness for products, will ask consumers to engage and share their interests. I expect we’ll also see a greater use of post-purchase surveys to gauge satisfaction and gather recommendations. If brands treat collecting zero-party data as an opportunity to start a two-way conversation about how they can best serve their customers, they’ll be able to use that information to build the experiences that keep customers coming back.”
Finally, Angel Maldonado, CEO at empathy.co, adds another dimension and says that:
“With digital trust around data becoming a priority over convenience, we will see tailored customer experiences continue into 2023 but this no longer has to be at the expense of privacy. Instead, we will see an era of empowerment in anonymity, where privacy and tailored customer journeys can co-exist through explainable AI. Trust-by-design search navigation tools achieve this by using AI to track user’s behavioural patterns on-site and recommend context-aware suggestions without any personal identifiable information (PII). Not only does this protect user’s privacy but it is shown to reduce cart abandonment, increase product findability and click through rates. In 2023 those that prioritise privacy and cultivate ‘Digital Trust’ amongst consumers will be best placed to thrive in increasingly challenging circumstances.”
Comment: For the longest time, customers have cried out for more personalized experiences. But, while brands have tried to deliver more personalized experiences, they have often left customers feeling either underwhelmed or creeped out. Delivering a more relevant, valuable, contextual and personalized customer experience will require brands to move away from relying on third-party data to a strategy built on first and zero-party data. Shockingly, research undertaken by Iterable in March and April of this year found that nearly 50% of CMOs reported that they are not well prepared for the end of third-party cookies. These brands need to hurry up if they are not to be left behind.
4. Customer loyalty and retention will be paramount but will not just be driven by discounts and rewards.
Luke Ladyman, Co-founder & COO at Cheddar, predicts:
“The last few years have been a rollercoaster of a ride for many to say the least. We’ve gone through a pandemic, lockdowns, supply chain issues, and now a cost of living crisis and recession. Gen Z consumers are going through a very tough time, with many having not experienced a situation like this before. This has spawned a much savvier consumer, one that is ultra-connected, engaged and pragmatic with their money.
2023 will see the rise of a new breed of consumer who will have higher expectations in terms of customer experience throughout their buyer journey. They will expect an experience tailored to their needs and personalized for them. Businesses will need to up their game in order to captivate consumers and earn their loyalty. When it comes to spending, consumers will seek added value and incentives from their customer experiences, prioritizing money saving promotions, discounts and cashback opportunities when choosing where they’ll shop during these challenging times.
Right now, for Gen Z, the main strain in their life is financial. The year ahead will see businesses needing to amplify the customer experience by providing tangible discounts and money to consumers to encourage spending, with cashback being king of the reward categories.”
Zsuzsa Kecsmar, Chief Strategy Officer and Co-founder of Antavo, adds:
“In 2023, we are moving from a post-pandemic mindset, to a recession one: companies are focusing on customer retention rather than acquisition, and the customers are looking to get more value. However, by using the latest technology, companies can also tap into a variety of ESG causes and help build a real connection with their customers while doing so. This leads to a whole new world of non-transactional loyalty program benefits which allows people to combine their purchasing with their ideals, values and aspirations so for example, a mountain wear retailer can reward you if you go out hiking. It’s a significant trend away from the traditional loyalty programs and allowing both companies and customers to be more creative.”
Sai Koppala, CMO at SheerID, builds on that by saying:
“With mounting concerns of an economic recession, in 2023, I think we’ll see a doubling down by brands on engaging their existing customer base. That said, loyalty is getting harder to come by because consumers have a seemingly infinite number of choices today. In response, marketers are seeking out new ways to build lasting emotional connections with customers.
During the coming year, we’ll also see more brands engage consumers on arguably the biggest existential issue of the day: the environment. A number of reports over the past year indicate that consumers – young people, in particular – are choosing brands that demonstrate environmentally sustainable practices or values. Marketers, I believe, will address buyers’ environmental concerns through a number of ways, from highlighting their brands’ sustainability efforts, to engaging customers in conversations about what matters to them, and developing engagement-based loyalty programs that recognize and reward these shared values.”
Comment: When times get tight, a little extra help here and there from brands, in the shape of things like discounts, rewards, payment plans, additional features and extra help, will go a long way to foster the loyalty of customers. However, that’s not the whole story, with research showing that an overwhelming majority of customers are increasingly aligning themselves with brands that share their values and concerns, particularly around sustainability and environmental issues. Brands not wanting to get caught in a race to the bottom would do well to pay attention.
5. Brands will dig into and leverage their data to deliver a long-awaited next-level customer service experience.
Leslie Pagel, Chief Customer Officer at Authenticx, predicts:
“Companies are starting to realize they’re ignoring the most valuable source of customer insights — the interactions they have with customers every day. They’re ignoring customer conversations because they believe their NPS scores and survey data represent the voice of the customer. But some haven’t realized that the literal voice of the customer is already in their walls and the technology exists to harness this data. Those who have ventured down the path of harnessing their customer interaction data recognize a value that is exponentially greater than the survey data they have relied on for decades.”
Dan O’Connell, Chief Strategy Officer at Dialpad, adds:
“I think we’ll see a big shift to proactive service and support throughout 2023. AI will play a critical part in identifying and inferring risks and opportunities within sales, support, and service conversations which will lead to much faster reactions from those teams. For example, instead of being behind the 8-ball reacting to a cancellation notice, they’ll be well aware that a customer is growing increasingly frustrated and be able to get ahead of a reduction in seats or cancellation request. Ultimately giving the agent and business a chance to save that customer.”
Tal Klein, CMO at Relay Network, goes further and says:
“My prediction is that 2023 will be the year when we start shifting from “self-service” to “self-healing” in the context of customer engagement. Self-service, whether through phone menus, portals or AI chatbots are all contributing to deteriorating customer sentiment. Businesses who invest in solving problems before the customer notices them, or in catalyzing meaningful engagement prior to an event that may cause dissatisfaction, will be the ones who succeed in retaining long-term customers. For example, rather than merely informing someone they are nearing their credit limit — a task which requires action, a card issuer may automatically increase the limit to avoid declined transactions. It’s easy to imagine a world in which the businesses who get this right capture more market share from those who keep the onus of solving problems on the customer.”
Comment: The promise of proactive service has been around for years. Research shows that customers want to be contacted proactively, particularly in a service context, and a proactive customer service strategy offers opportunities to both save costs and boost retention. This feels like the perfect combination in this current environment and explains the seeming groundswell from brands actively looking to deliver proactive service at scale.
6. A stand-out employee (agent) experience will be at the heart of every leading customer experience.
Mark Smith, SVP Digital Experience at CSG, predicts:
“In 2023, we expect employee experience to feed into customer experience more than ever. Over the course of the past few years, we’ve seen an influx in conversations around the employee experience and how it plays into attracting new talent. But post-labor shortage, it will center around retention and education. Employee satisfaction is at the forefront of every company’s mind, sometimes even more so than customer satisfaction. More often, businesses are realizing that without an empowered and happy employee, you won’t be able to translate that to a confident and happy customer. It’s a completely symbiotic relationship. By giving your employees the tools and information they need to do their job well, they’ll be happier, more efficient, and impactful. In turn, this will enhance the customer experience – leading to a more dedicated customer, and a more loyal customer means increased revenue.”
Michael Lawder, Chief Experience Officer at ASAPP, adds:
“Talking to customers is a privilege. Not every business function has the opportunity to build relationships, foster loyalty, drive lifetime value, and strengthen the bond between the customer and the products and services they buy. Companies that invest in the contact center and customer experience will see increased revenue and acquisition. That’s why contact center agents – the ones who speak with customers on a daily basis – will be seen as an organization’s secret weapon in 2023. Agents that are empowered with advanced technology and tools like automation have the opportunity to drive significant business outcomes based on the information they learn from speaking with customers.”
Tom Goodmanson, President & CEO of Calabrio, adds:
“As we go into 2023, we’re seeing more and more consumers expecting an omnichannel experience, yet they crave human-to-human interactions for customer service. They expect a real, live, human agent to be available when they want one. In our growing digital world, voice still reigns when it comes to the customer experience. 2023 will be a year of empowerment for contact centers, and managers need to shift perspective to position agents as brand guardians. Contact centers are a brands virtual front door to enriching customer experiences and need proper technology to meet the rising consumer expectations heading into 2023.”
Bill Staikos, SVP, Evangelist & Head of Community Engagement at Medallia, builds on this saying:
“In the Contact Center, more companies will invest in capabilities that deliver real-time coaching to agents. With turnover at the agent and supervisor levels continuing to negatively impact companies and the agent-experience delivered, real-time coaching helps smooth out the retention curve as it provides agents with insights such as reducing their rate of speech, using more positive language, tips to de-escalate, surface policy in real time based on what the customer is saying, and prompts to stay on brand to name a few.
With supervisors having to take on more staff, real-time coaching tools will provide scale to supervisors so they can focus on agents requiring deeper levels of coaching. Finally, this capability will also be used as a retention tool and as a differentiator in the hiring process when looking for top talent.”
Jonathan Allan, CMO at Puzzel, sums things up by saying:
“A prediction, and hope is that 2023 will be the year of the customer service employee. Turning our backs on the days when working in a contact centre was associated with low skills, low morale and low pay. When technology was introduced to lower staffing levels through indiscriminate automation – without thought for the impact on the customer.
Tomorrow’s hero brands know that simplified and exceptional customer experience is the only way to ride out the current economic challenges and even claim more market share. And that this can only be provided when contact centre employees are valued, trained and supported to provide exceptional customer experiences.
Here’s to the Chief Customer Officer who harnesses the power of technology and automation to free their team of customer heroes to build a happy customer base and increase lifetime value. Here’s to our customer heroes being proud of their skills and their contribution to their chosen career.”
Comment: Despite the investment in digital self-service tools, the demand for live help from a fellow human being remains strong. These are critical interactions and can make or break a relationship. However, successful live interactions require skilled, resilient, and empathetic agents enabled and supported by the right technology.
But, labor markets worldwide are tight, and these types of individuals are in short supply. When you combine that with a perennially high attrition rate in the customer service space, particularly in contact centers, that poses a problem.
Therefore, it is heartening, but not surprising, that brands are increasingly focusing on the employee (agent) experience as they seek to upskill, support and retain their existing agents and attract new ones.
7. Organizations will invest in composable technology and look to vendors to help them achieve their goals quickly and prove the RoI of their investments.
Deanna Ballew, SVP of Product at Acquia, predicts that:
“CX in 2023 will inevitably be influenced by how the pandemic and economic uncertainty impact customer expectations. I believe the organizations that will be successful in their CX strategy in 2023 will be the ones that embed the importance of CX across the entire organization – as opposed to a siloed approach – and prioritize technologies such as a CDP to unify customer data. As budgets are constrained in 2023, organizations will need to stay agile by focusing on composable architecture and platforms like DXP that optimize your work.
In fact, according to Acquia’s 2022 CX Trends report, 58% of marketers are focused on adopting new marketing technology. With that, I think composable technology will be an increasing area of strategic CX investments in the coming year. It enables organizations to mix and match components from different sources, which allows them to be more agile while avoiding vendor lock-in. This approach helps marketing teams accomplish more, in partnership with IT teams.”
Amanda Malko, CMO at G2, adds:
“In 2023, product education will become the new B2B product marketing, as customers are under greater pressure to provide return on investment (ROI) faster. In the software world, we see that more than half of all contracts are six months or less. And, when asked what the most important considerations are when they’re making a software purchase, B2B buyers ranked the following as their top three: 1) ease of implementation, 2) seeing return on investment (ROI) in six months, and 3) ease of use – which notably, all increased in importance over the past year. Knowing that the barrier to customer success is often a lack of understanding of how to use the solutions, B2B marketers have a huge opportunity in front of them to eliminate friction in product adoption and take their customer education to the next level.”
Finally, Eric Williamson, CMO at CallMiner, says that:
“In 2023, it will be more important than ever for technology vendors to demonstrate their value to prospects and existing customers. With the current economic uncertainty, potential and current customers are scrutinizing their tech investments and looking for places to trim budgets, and vendors that can’t prove their ROI will be on the chopping block. To retain and expand their customer base, vendors need to do a better job of setting realistic expectations and living up to them by showing value and delivering ROI quickly.”
Comment: The only things, at the moment, that seem certain are uncertainty and change. Therefore, brands will increasingly align themselves with technology vendors offering a more composable architecture that enables them to quickly adjust to changing market and customer conditions.
That’s it for predictions from me this year.
Thank you to everyone that sent me material and predictions to consider.
If yours didn’t make it, I apologize. But I did have a long list to whittle down.
However, of the seven themes that have emerged, I think there are some decent bets in there.
Let’s see what happens.