The Customer Experience Dynamic in 2020, How Should CIOs Act?

Thu 23 January 2020, Agus F. Abdillah
customer experience

The rapid development of application-based startups in the digital era is truly fantastic. Business development achievements made by conventional businesses over decades can be equated to the business growth of startups in a short period of time.  

Besides products, the key to the rapid growth of the startup industry is the power of service and how to create a satisfying customer experience (CX). It is even possible that in the future the main factor of a purchase will be more heavily determined by customer experience than the price of the product itself. This is certainly a new dynamic in business, even for conventional companies.

The CX dynamic is the finding of a study conducted by PricewaterhouseCoopers (PwC)[i] which stated that 73% of consumers value customer experience as an important factor. Meanwhile, 68% of B to B  marketing agreed that providing a consistent and high-quality customer experience is extremely important with current market conditions. The above percentages indicate that loyal customers of a product will now turn to competitors if the company ignores the CX factor.

Realizing this, companies tend to encourage the Chief Information Officer (CIO) to manage and enhance the customer experience. Management of CX means creating a dynamic strategy by collecting feedback from customers. At the same time, the company’s priorities in managing CX also need to be reviewed or on par with priorities in sales, marketing, and innovation technology. A KPMG[ii] survey conducted in 2019 stated that 91 percent of CIOs believed that managing and utilizing user data would be as important as the product or the service itself. With the increasingly important role of the customer experience in the digital transformation of companies, as a digital technology solutions company, Telkomtelstra has reviewed five CX dynamics in Indonesia that could be of concern to CIOs in 2020:

1. Innovation as More than Just a Product

Changes related to new innovations of services and products will grow rapidly going forward. The shifting trend from simply selling products to selling services around products will be increasingly in demand as consumers change behavior, especially millennials. Many consumers, especially young people, have moved away from consumerism that is fixated on products. As a result, finding new ways to sell different versions of products that consumers already have is the challenge for companies moving forward.

One such illustration of this is that younger consumers may no longer want to purchase a CD, but they will pay a monthly fee for access to music streaming services. By doing so, they can make their own choices of songs that are more in demand. The same applies to services such as automotive or even IT hardware services.

Consumer behavior, especially among young people, is moving rapidly beyond products as they wish to be integrated into today’s digital era. Not surprisingly, consumers are more interested in service innovation around products, and are not just focused on the product itself.   Observing this trend, companies will be required to understand customer experience as the basis of consumer desire. Businesses today cannot focus only on selling new products, which can leave them falling behind the competition in terms of price, and is not proven to save the company from shifting long-term trends. Experience-based innovations that are memorable for customers will be more meaningful to customers than products that will disappear in time over the technological cycle.

2. The Increasing Use of Robotics in Business

The digital age has created drastic and dynamic changes. The era of robots and machine learning has arrived to replace some human jobs, including jobs in customer service.

Little by little, this has already happened. The arrival of chatbots that are increasingly intelligent and understand customer experience will replace some roles in customer service. A number of international research institutes have even estimated that the number of institutions using AI-based chatbots will increase drastically to 136% globally. This technology will help service agents and others to provide a better and faster experience for customers. As a result, customer history and relevant data can be presented at the right time so that the marketing team can provide more personalized services in a way that is faster and more convenient for customers.

3. Security and Compliance will be New Priorities

The rapid advancement of the digital age has raised concerns about cyber security. Awareness of this has begun to broaden, and the government has increased pressure in terms of regulations regarding cyber compliance and security. One thing is certain, customer data must be handled properly at all times. The Indonesian government is currently drafting a Personal Data Protection Bill which is now in parliament.  

In light of this, going forward companies should be more focused on monitoring the management of digital interactions with customers. Do not let a cyber security related issue erase the positive image of a company that has been painstakingly built to create a satisfying customer experience.  

However, behind that, it should be noted that challenges remain relating to the small number of CX management teams in Indonesia in achieving the expected cyber security governance standards. If this is allowed to continue, the risk of non-compliance will increase. Going forward, to help overcome security and compliance challenges and build customer trust in the businesses being run, the trend of increasing investment in analytics and artificial intelligence (AI) tools for cyber security will develop rapidly. Customer call records, for example, are very sensitive information that can be stored for years. Not surprisingly, customer call centres are at risk of violating compliance regulations. Advanced technology offers various ways to block the recording of sensitive phrases or keywords. Some service solutions also imbed an API in the recording stream. In doing so, sensitive details are not recorded, helping to reduce the possibility of breaches.

4. Personalization of the Customer Experience will Skyrocket

It is undeniable that customers will not tolerate outdated technology, work processes, or communications. However, on the other hand, customers also tend to not want to be generalized with other customers. Personalization of the customer experience will work as a magnet in satisfying customers. With widespread access to information, customers will understand much more than they ever have before. As a result, communication with customers must not only be smooth, but must be updated using languages and tones that are specific to the characteristics of consumers. Customers do not want to have formal or cold interactions with a robot, rather robots have to be seen as a ‘friend’ who understands them. This can also be interpreted as an effort to review communication styles by using updated terms and abandoning terms that refer to gender and race.

5. Social Platforms becoming a Customer Reference

Integration with social media platforms has become an important tool for building CX as consumers today are more social. Perceptions from social media can be one of the means of building a positive image of the customer experience. The superiority of digital technology used, the convenience offered, and the convenience of transactions will make more of an impact if the CX is connected with social media platforms.

Chatting on social media platforms about CX is also more easily digested by consumers in general. This can be used as a reference in analyzing consumer behavior in certain communities to form a more satisfying CX going forward.

Through various arguments and predictions of future trends, it is clear that new initiatives relating to the customer experience will continue to increase in Indonesia in 2020 and beyond. Supported by the benefits of the latest emerging digital technologies such as the Cloud, analytics, IoT and AI to serve the unique needs of customers, CIOs will be pressed to ensure that businesses provide the type of CX that consumers expect. (*)

[i] PwC 2018 Study titled “Experience is everything: Here’s How To Get It Right (Future of CX)”.

[ii] KPMG 2019 Global Customer Experience Excellence Report titled “Customer First, Customer Obsessed”.

*- This article was written by Agus F Abdillah, Telkomtelstra’s Chief Product and Services Officer