June 29, 2021

Customer Experience Trends

Many of the current trends in CX have been around for a while. Think—personalization, omnichannel support, and more transparency around how brands can capture and use consumer data.

According to McKinsey, COVID-19 has intensified these trends and widened the existing gap between top performers and those at the bottom.

What’s more, customers now hold brands to a higher standard. They want seamless, hyper-relevant experiences, but they’re concerned about brands selling their data. They also expect brands to anticipate their needs, offer proactive support, and share the same set of values re: social justice, climate change, etc.

Below, we’ll look at the most important customer experience trends—and how they’re evolving—so you can stay ahead of the curve (and your competitors).

Privacy

The introduction of the GDPR in 2018 and the California Consumer Privacy Act (CCPA) in 2020 ushered in a new era of data privacy. This shift created both a sense of uncertainty and an opportunity for brands to gain a competitive edge by addressing customer concerns.

According to Pew Research, 81% of customers say the potential risks of data collection outweigh the benefits tech companies promise. Another report found that 87% will stop doing business with companies they believe are mishandling their data.

As customers become more aware of the extent they’re being tracked, we’re beginning to see a shift from some of the biggest companies.

Apple’s latest iPhone update (iOS 14.5) introduced a new set of privacy tools, including a controversial feature—App Tracking Transparency, which allows users to opt out of IDFA-based ad tracking. Developers can’t track or sell data from customers who click “do not track.” If users click “allow,” everything works the same as before.

Brands also need to prepare for the cookie-less future—which kicks in come 2022. While it will require companies to embrace a new way of capturing data, it isn’t all doom and gloom. Organizations have an opportunity to gain more control over their brand and improve customer outcomes with improved in-the-moment targeting.

Personalization

According to UltimateAI, 84% of customers spend more money with brands that offer personalized service experiences, and per another report by SmarterHQ, 72% of customers say they’ll only engage with personalized messages that align with their interests.

Personalization has been part of the CX conversation for years, but it’s evolving to meet the moment.

That same UltimateAI report points out that in the past, brands focused on multi-channel personalization—aimed at meeting customers where they are—adapting their voice and message to each channel. Now, the focus is on “no-channel” personalization, where information flows freely between channels.

Experiences can be customized based on personas, usually as a starting point. As applications capture more data, it can be used to create sub-segments within each group and tailor experiences on an individual level.

3Pillar’s SME 7 says, “using data to create personalized experiences and a better UI that ultimately increases overall satisfaction. For example, if you look at Spotify, the app uses data to generate music recommendations based on your past listening habits and allows you to create an optimized playlist for any occasion in a very intuitive way.”

To deliver these hyper-personalized, no-channel experiences, brands need a lot of data. But, as 3Pillar’s Angel Almada explains, “there's a big trend against sharing data with brands, especially if that data is going to be sold to develop customized journeys for that specific user.”

He advises brands to focus on capturing first-party data and embracing new contextual targeting tactics.

As mentioned in the last section, personalization and privacy aren’t necessarily at odds with one another. There are better ways to collect data. Part of it is gaining a better understanding of how users interact with products—for example, by implementing behavioral analytics, conducting surveys and interviews.

Proactive Service

It’s no longer enough for brands to react to problems; they need to identify and address them before customers churn—or worse, air their grievances in public.

SME 6 says they’re starting to see “more companies actually talk to their users and listen to their needs. They proactively seek feedback (might be in the form of annual NPS or CSAT, interviews, phone calls, or focus groups) to learn more about how they can improve the customer experience and better fulfill user needs.”

But capturing all those NPS scores isn’t worth much unless you can identify key insights and put them into action. For example, what does it mean when your CSAT score drops for three months straight? Why is customer churn increasing?

Brands need to do some investigating to find the right solutions.

SME 6 again, “analytics is a major part of CX, as it offers insight into how customers interact with the product/service and may be used to predict future patterns or to enhance the existing customer experience."

For example, a brand might deploy a chatbot on a product page with a higher than average bounce rate.

SME 6 adds: “one of the trends in CX I've been noticing lately is chatbots and AI showing up on social media platforms, apps, and websites. This helps companies interact with customers 24/7 and reduce response time.”

But, Angel Almada says it’s important to avoid applying blanket solutions such as chatbots in areas where they might add unnecessary friction. Instead, he argues that “the trend should be to not even need chatbots in the first place because the UX is so aligned to the CX for the target audience that’s just intuitive.”

Brands might instead offer proactive service in the form of predictive user journeys. Think—Amazon product recommendations or in-app onboarding that helps new customers learn how to use different features.

Preference for Self-Service

While many customers want, or even expect, responsive, proactive support, they also want access to tools and resources that help them help themselves.

3Pillar’s Angel Almada puts it this way, “the ideal CX is so well-designed that it’s intuitive and self-explanatory. In other words, you don't need to interact with a bot or knowledge base content to solve a problem. For example, I’ve never had to read a manual or talk to someone to use my Kindle because the CX is so well-designed that it serves my needs as intended, without adding any friction to the experience.”

At the same time, it depends on the product (i.e., sales or marketing automation software probably needs tutorials and knowledge-base content) and what the customer is trying to do.

Using the Kindle example again, Amazon makes it super easy to set up an account and start reading books purchased or borrowed from Amazon. It's a bad sign if users need a manual to get started. However, they might need instructions to check out Kindle books from their local library or import e-books purchased from different sellers.

For products designed for more complex use cases, chatbots, video tutorials, and knowledge base content may be essential. Think marketing automation or CRM software.

In a retail setting, the products themselves may not require any explanation but offering things like AR-based try-on, access to customer service for processing returns/asking questions/etc., can go a long way with customers.

Ultimately, the key here is to look at customer needs in context and provide self-service tools that best meet their needs.

Habit Loops

Brands are increasingly embracing the idea of habit loops—a term coined by MIT researchers that describes the neurological patterns that shape our routines.

The habit loop breaks down into the following stages:

  • Trigger. A cue that indicates when it’s time to perform a habit.
  • Routine. The habit itself.
  • Reward. The brain’s positive response to performing the habit.

Once a company reaches the point where it has a mature CX strategy, it can develop triggers that eventually become habits.

The best-known example of this is how social media apps get users hooked on the product— “I’m bored, I guess I’ll scroll through my Instagram feed.”

So, boredom is the trigger, scrolling is the routine, and the reward is the possibility that there’s a “like” or “DM” waiting inside the app.

Intelligent Analytics & Data Management

We’re not even all the way through this customer experience trends list, but you’ve probably noticed a common thread: data is key to delivering great experiences.

Real-time insights into complex, non-linear customer journeys enable proactive support and personalized solutions. They also support informed decision-making and allow brands to develop new solutions that meet customer needs and shape behaviors around those solutions.

Unfortunately, many brands are ill-equipped to turn customer data into profits. According to ZenDesk, most agents don’t even have access to the most common types of customer data. We’re talking things like order history, credit card information, and plan/subscription details.

Customer Data Platforms (CDPs) can help front-line staff (sales, service, marketing) leverage customer insights to deliver better service.

Sales teams can prioritize high-intent prospects, marketers can coordinate campaigns across every touchpoint, and customer service can approach every interaction with a contextual understanding.

There’s also the challenge of productizing data (aka turning data into a product or service), which requires significant infrastructure investments, as well as governance policies that ensure GDPR/CCPA/PII compliance.

Social Responsibility

Finally, one of the biggest digital customer experience trends emerging from the COVID era has little to do with technology at all. Customers now care more about what brands stand for: climate change, social justice, the post-pandemic demand for more empathy.

SME 4 says they've noticed more brands are focused on delivering “JEDI experiences - Justice, Equity, Diversity, Inclusion. Expanded. Carbon neutral efforts.”

You have companies like Subaru and Puma focusing on climate change. And then you’ve got big names like American Express and GoDaddy that say they view social responsibility as a differentiator—both in terms of connecting with clients and recruiting like-minded talent.

A rep for GoDaddy says they chose gender equality because more than half of their customers are women and because they believe diverse teams create better products. Likewise, AmEx opted to expand parental leave policies at a moment when parental issues like child care and paid leave are at the center of political debate.

Final thoughts

SME 2 notes that many of the “current customer experience industry trends run in conflict with one another. Those include calls for improved transparency and privacy protection as well as personalization. A preference for self-service and an expectation for concierge-level service across multiple touchpoints.

They add, “These trends are occurring because the increasing volume of data is starting to have a cognitive overload on people. Products that don’t tailor and present the most relevant data to be converted into information make it difficult for someone to consume. The balance between privacy and personalization will continue to be a challenge.”

In other words, the key theme in CX these days is balance. Privacy-personalization, automation-human touch, self-service-hands-on support—and so on. 3Pillar Global helps clients hit their growth objectives by building products that customers love. To learn more about our services, contact an expert today.