Seventy-seven percent of businesses say consumer expectations for effectively engaging with them digitally have increased over the past 12 months, up more than 10 percent from a similar survey conducted just last year. The findings are from the 2023 State of Digital Customer Experience Report by Verint® (NASDAQ: VRNT), The Customer Engagement Company®, analyzing consumers’ and businesses’ digital engagement expectations.
Of the U.S. consumers aged 18 to 75 who prefer to use digital channels to contact a company, over one-third (34 percent) say their service expectations have levelled up – an increase of 16 percent year-over-year compared to a similar survey fielded last year.
Consumers place high value on prompt company responses, with 65 percent ranking it as either the most important or second most important factor in creating a positive customer experience. Easily getting an answer to questions related to service issues is a key consideration, with 47 percent identifying this as their primary or secondary priority.
The impact of a single poor customer experience on consumer behavior is significant, with 69 percent of consumers indicating they would cease doing business with a company following just one negative interaction. Exceptional customer experience is also a huge factor for consumer behavior as 80 percent of consumers are likely to become loyal customers of companies that deliver exceptional customer experiences via digital channels.
“Customer churn is a detrimental blow to any business. It’s not just about losing a sale, it’s about eroding trust, breaking established relationships, and the ripple effect of negative word-of-mouth. Every customer lost is a signal to re-evaluate, innovate, and improve customer engagement practices,” says Verint’s Jenni Palocsik, vice president, marketing insights, experience and enablement. “The research emphasizes the escalating demands on businesses to offer prompt and effective responses as customers now expect immediate and frictionless engagement on their platform of choice.”
Digital Engagement Channels Surge in Popularity
The results from the consumer survey highlight the popularity of digital engagement channels being driven by a younger and more technologically savvy consumer base. Half of all consumers surveyed have reached out to a company via social media and/or private messaging channels, registering a year-over-year growth of 14 percent and 13 percent respectively. Interestingly, 38 percent of customers have used both of these channels to interact with a business.
The broadening of digital platform usage provides businesses with a valuable opportunity to leverage customer data to deliver more tailored and personalized experiences.
AI Deemed a Crucial Customer Engagement Strategy Element
Adoption of Artificial Intelligence (AI) is becoming increasingly pivotal in customer engagement strategy, with 55 percent of businesses surveyed affirming its central role. An additional 27 percent of businesses surveyed have plans to expand their AI use in the future, and 69 percent say AI technology, particularly virtual assistants for self-service, will significantly influence their customer experience approach.
Organizations must devise a smart implementation strategy to circumvent common AI deployment challenges including prolonged delays, expensive development processes, and bots failing to meet customer expectations. Of the 74 percent of consumers who have used a chatbot, 64 percent reported a negative experience. The most troubling issues cited were the bots failing to answer the customer’s question (71%) and/or misunderstanding their intent (64%).
“To meet rising customer expectations for swift responses and immediate issue resolution, businesses need to take their AI strategies beyond just deploying basic chatbots,” says Palocsik. “Automation is now an integral feature of modern customer engagement. Businesses must also incorporate advanced technologies such as natural language processing and machine learning, coupled with comprehensive intent understanding libraries. This amalgamation of technologies will help streamline responses to sophisticated customer interactions.”
Legacy Systems Hinder the Shift to Digital
Forty-three percent of businesses believe that the customer service team adoption of social media and private messaging channels will significantly shape their customer experience strategy in the upcoming year. However, nearly half (46%) of businesses consider legacy systems to be a major barrier when trying to implement digital-first customer engagement.
“The problem has changed, so the approach needs to change as well,” continues Palocsik. “It’s not enough to simply provide additional channels to meet customer demand. Nor is it enough to just provide point solutions as add-ons to telephony-centric systems. What’s really needed is a holistic approach to CX automation.”