Transforming Customer Service in the Digital Age

A quick search can put thousands of articles on digital transformation at our fingertip and hundreds with a subset focus on customer service. The problem is they are all too broad and therefore say the same thing without providing two actionable perspectives for you: how do you start and how do you scale? The goal of this blog is to focus on digital transformation’s impact on customer service while providing some actionable approaches that scale down to the SMB and not just the global enterprise.

It makes sense on its face that staying competitive today requires a company to redefine themselves as a technology business at its core. The looming question is, what does that mean for customer service?

Understanding the basics of automation in retail, integrating digital technology into every business area, and delivering customer value requires organizational cultural change. These changes must be based on agility, innovation, and customer-centricity.

Solugenix has a long history in helping companies of all sizes define what that means across major sectors like retail, QSR and many others. When we talk about specific aspects of digital transformation and its impact on customer service, we should start with how some of those technologies and processes are changing. You can universally see this across retail and other business sectors like finance, healthcare and beyond.

The Evolution of Digital Tools For Customer Service Enhancement

Digital tools that enhance customer service are always changing from the use of Generative AI and analytics for data driven decision making to combining AI’s analytical power with extended reality’s immersive experiences. A majority (80%) of customer service and support will use a form of generative AI for improving agent productivity and customer experience (CX) by 2025, according to Gartner.

Automation, AI, and RPA are now used by customer service agents and field service workers to maximize their view of the customer to:

• Tailor solutions, interactions, preferences
• Strengthen relationships
• Minimize meantime to resolution
• Maximize customer satisfaction

Even SMB RPA implementation can play a major role in customer service and support center to point of sale, omnichannel interactions. This is true across retail, QSR, banking, healthcare, and more.

Immersive CX using virtual and augmented reality (VR/AR) can overlay digital information on the real environment to enable:

• Try before they buy
• Healthcare assists in medical training and patient education
• Real estate virtual property tours
• Education interactive learning experiences
• Tourism experiential guides

While these and other digital transformation possibilities are vast, business must balance them with a human touch for customer/customer service personnel acceptance.

Balancing Technological Innovation With Human Touch

While customer service digital transformation is fundamental to being competitive, innovative, and responsive to changing customer demands, you must balance it with a customer-centric human touch. Automation, AI, and RPA—as just three connected examples—require a true understanding of much more than internal processes.

They require a deep understanding of the way customer service agents, automation tools, and customers interact to ensure they’re left happy and satisfied. Ensuring a customer-centric balance with the human touch means deemphasizing contact center metrics like average handle time (AHT) and prioritizing customer-centric KPIs such as:

• Customer satisfaction scores (CSAT)
• Net Promoter Scores (NPS)
• First contact resolution (FCR)

Omnichannel Communication

Digital age customer service requires an unbroken connection via omnichannel communication that meets customers where they are. These omnichannel strategies deliver consistent and effective communication across phone, social media, email, or live chat with consistency and personalized human interaction where needed.

Hyper personalization and sentiment analysis

Organizations should focus omnichannel communication on hyper personalization via generative AI, conversational user interfaces, and seamless digital customer service offerings, according to a recent Gartner Report. Hyper-personalization is based on the ability to use data and analytics to deliver individualized experiences while ensuring data privacy and transparency to keep customer trust.

Data analytics that focus on sentiment analysis uses NLP and AI/ML to understand a customer’s emotional vocal tone in customer support interactions, surveys, and email. This major shift from a transactional approach gives customer service agents and even advanced chatbots the ability to engage with customers in a real-time human way.

Testing automation using synthetic customers

You should always test technologies like automation, RPA, and AI before implementation with customer interactions. One approach gaining steam is the use of synthetic customers. These AI-powered virtual entities act like real customers making enquiries and purchases, along with giving feedback without human help.

The goal is to create a realistic, scalable, and data-driven approach to understanding and improving CX. Their ability to act like real customers helps business gain insights for improvement and innovation across industries such as:

• Evaluating E-commerce website usability
• Providing fraud detection support for finance and digital banking services
• Assessing healthcare patient portals and telehealth services usability
• Improving and personalizing entertainment content recommendation systems and user experiences

Security-centric CX

A fundamental part of customer service is ensuring customer data security and privacy. This starts with encryption and multi-factor authentication adoption and continues with regulatory compliance. These and other tools have a profound impact on shaping customer demands and business responsiveness.

Impact of Digital Transformation on Customer Expectations and Business Responsiveness

The omni-channel experience is the foundation of digital transformation’s impact on customer service. This is where the combination of physical (brick and mortar) and digital CX—known as phygital—are the norm. Customers require a transparency between online and offline presence to view, choose, and order products online, pick them up in store and return them the same way. This has given rise to:

• Technology Integration like AR/VR for virtual try-on
• Data Utilization to understand online and offline channel customer behavior
• Integration of eCommerce, POS/BOPIS (Buy Online Pickup In-Store) solutions for a seamless experience

Customer Service Digital Transformation Success Stories

Digital transformation in customer service has countless success stories that you can adapt for SMEs and enterprises to enhance consumer engagement and operational efficiency. Here are several that stand out from recent years:

• H&M's has harnessed AI to integrate diverse data streams for inventory and ordering optimization.
• Wayfair's geo sort algorithm can tailor product recommendations based on proximity to reduce shipping distances and costs while improving customer loyalty.
• Advanced RPA chatbots can now understand natural language to provide personalized responses that streamline customer service and ease retail employee strain.
• Visual Search is now everywhere, enabling customers to take a photo of an item and upload it to the web for search or using Google’s circle-to-search feature does it all via your android smartphone.
• VR and AR from IKEA's AR app, and Wayfair’s “try before you buy: are longstanding customer-immersive experience success stories driving higher conversion rates and reduced product returns.

Although these success stories are inspiring, getting from idea to execution has its challenges, which you can overcome with the proper approach and planning.

Customer Service Digital Solutions Implementation Challenges

Digital transformation is never a simple matter and always presents challenges. It can seem daunting to implement AI, automation, RPA, and analytics solutions in retail or other sectors with a focus on customer service. The first is selecting the right technology and understanding how best to implement it into the business.

The second is grappling with implementation cost, expertise, training, and change management challenges. Since customer needs are constantly changing, any digital transformation must be agile, adaptable, and scalable.

The ideal approach is technology choice and business goal alignment driven by a customer-centric approach. Unfortunately, articles overly emphasize enterprise digital transformation and overlook the implementation path for SMBs and mid-sized enterprises. A more granular look shows nearly every successful digital transformation project focused on customer service began as a pilot project backed by:

• Existing data and process analysis
• Extensive planning and implementation strategy development
• Reality-based cost, risk, and ROI projections

Realizing Real-World Digital Transformation in Customer Service

Once you move beyond the hype—with restaurants and QSR as two examples—and focus on practical applications, it’s easier to develop a practical implementation approach that starts small and scales easily.

The goal is to test the efficacy of the project on a small scale. This limits costs and ensures project scalability based on benchmarks that avoid incurring costs that cannot be recouped by showing data representing:

• Current customer service success rates
• Areas for improvement
• Validated projections for improved bottom line

You can then balance these aspects against digital transformation implementation, management, and improvement costs.

SMBs and enterprises face similar challenges of business process flow and customer data understanding along with expert personnel and ways to ensure successful implementation and internal change management. Solugenix has a long history of working with small business to global Fortune 50 powerhouses across sectors that need this support from a team of people that have done it countless times before. This can include providing:

• Digital Operations and Automation Technologies support
• Support Center Services via establishment of a Center of Excellence (CoE)
• Low code solutions for RPA, applications and beyond

Having the support of a third-party digital strategy consulting, planning, implementation and change management partner like Solugenix is the first step to creating a tailored approach that identifies and defines success in business and customer service terms in the real world. This is the first step in a smooth journey to ongoing innovation, competitiveness, and adaptability in a constantly changing business landscape.

To learn how Solugenix can help you start your digital transformation journey, schedule an introductory call by clicking here.