The Future of Customer Service & 5 Rising Customer Expectations

From a customer’s perspective, not a lot has changed in terms of customer service, nor will a lot change. Customers still expect quick responses and faster resolutions to their inquiries. 

Therefore, in terms of essential customer expectations, businesses mainly need to focus on metrics such as customer satisfaction (CSAT) and first contact resolution (FCR). 

However, the manner in which those metrics can be maximized is now changing, and the overall future of customer service holds some definite transformations.

As we advance further into the digital age, it’s becoming clear that the future of customer service is not solely about human interaction but rather a blend of human expertise and technological assistance. 

From AI and IoT to blockchain and cloud-based platforms, technology is set to redefine how businesses interact with their customers.

Since competition is severely increasing and companies are essentially competing on the basis of customer service, businesses are trying to come up with novel ideas to enhance their customer support.

In this blog, based on my years of experience working with customer service outsourcing firms, I will share my observations and forecasts regarding the future of customer service. 

How Customer Expectations are Changing

• Customers Expect You to Have a Social Media Presence

As I mentioned above, customers still expect fast responses and rapid resolutions to their problems. 

However, the manner in which those things happen is changing. 

For example, up until half a decade ago, the majority of customers couldn’t imagine interacting with a business by SMS or text.

As a customer, you would call a company, ask for details, place an order, and follow up – all through your phone. 

Now, customers expect you to have a social media presence, phone and email support, and probably even live chat! 

Many brands are simply operating on a single social media platform – that’s mind-boggling if you really think about it. 

Rather than having to invest in a physical location, people are merely operating through Instagram, for example. 

They’ve set up pages, uploaded pictures of their products and social proof in the form of reviews, and set up automated responses to guide the customer. 

So if a company is offering such a smooth, streamlined process and another company in the same niche is still living in the medieval ages, of course, they’ll lose an edge.

• Customers Expect You to Have a Live Chat

Moreover, the definition of a fast response has changed due to the advent of social networking.

What it meant for someone five years ago isn’t the same as what it means for someone today.

That means businesses offering live chat on their websites will gain a massive edge – 64% of customers said they tried a new communication channel like live chat during the pandemic, according to a Zendesk report. 

That does not mean you should only offer live chat, you need to have omnichannel support in place that integrates all channels of communication. 

Nonetheless, the benefits of live chat are numerous, and they’re backed by statistics as well. Check out this recommended reading for further details.

• Customers Expect You to Be Well-Informed About Them and Their Privacy

With the emergence of personalized and targeted ads, there’s increasing tension between customers and businesses regarding privacy. 

According to Gartner’s 2022 survey, 71% of B2C customers and 86% of B2B customers expect customer support reps to be well-informed about them.

That includes addressing customer privacy concerns and ensuring their trust.

Businesses can address these privacy concerns by ensuring transparency as to why they’re collecting customer data and how they’re going to use it.

Furthermore, make sure that you collect customer information that can be used to benefit both the customer and the company, rather than just the company.

• Customers Expect You to Have Omnichannel Service

A customer who initiates a conversation on a social media platform won’t understand why the same business doesn’t remember that conversation when on call. 

That means, for customers, you’re just a business whose channels of communication are all aligned. 

It won’t make any sense for them when your call agent is unaware of what was discussed with your social media manager on Facebook. 

Therefore, make sure you’ve got omnichannel support in place.

Remember, omnichannel support is different from multichannel support. In omnichannel support, all modes of communication are interconnected and context is not lost. In multichannel support, various channels work independently and separately from each other.

This is also backed by data – a study shows that high-performing companies are more likely to have adopted omnichannel support.

• Customers Expect You to Care About Values

Customer service in the modern world isn’t just about being available 24/7 – it’s also about caring for values like empathy, social responsibility, diversity, and inclusion.

According to Zendesk’s survey this year, 49% of customers are seeking empathetic support agents, 54% are looking to do business with companies that promote diversity and equality, and 63% are looking for companies that are socially responsible.

Future Challenges That the Service Industry Faces

• Keeping Up With Changing Customer Expectations

One of the major challenges that the customer service industry faces is the rise in customer expectations. The concept of instant gratification and the stress on privacy is emerging rapidly.

Furthermore, providing personalized interactions, omnichannel support, ensuring rapid response times, and maintaining quality throughout the modes of communication are the latest trends.

As a business expert, I have observed that these expectations are not static but evolve with technological advancements and industry trends. 

Therefore, it is crucial for businesses to stay updated with these changes, personalize interactions, ensure multi-channel support, and maintain consistent service quality. 

Failure to meet these expectations can negatively impact customer satisfaction, tarnishing business reputation and affecting customer retention.

• Scaling Customer Support as Business Grows

Managing resources while scaling is one of the most common challenges faced by businesses. In the customer service department, the volume of incoming inquiries increases and it becomes difficult to handle them. 

Scaling customer service isn’t just about expanding the team but enhancing service processes, integrating appropriate technologies, and upholding service quality amidst growing customer interactions.

As a B2B company to which other companies outsource their customer service, we’ve seen that scaling is one of the most common reasons for outsourcing! 

Businesses usually have an in-house team which is unable to keep up with the increasing volume and hiring, staffing, and training more agents requires a lot of resources.

That’s why outsourcing comes in handy when businesses need to scale.

Read More About Outsourcing: The Ultimate Guide to Outsourcing Customer Support 2023

• Lack of Skilled Resources

Since automation and AI is taking over most of the tasks in the customer service industry, the job description of a customer service will change in future.

Agents will require more skills than just having a good grip on language and knowing how to send canned responses. 

These future skills in customer support representatives will include being empathetic, innovative, ability to drive company-wide growth and having leadership skills. 

The lack of such skilled agents will be a problem in future. This is because a more personalized, human touch will be required for more complex interactions which cannot be handled by AI.

• Translating Digital Needs Into Tangible Improvements

The rise of digital customer interaction channels has provided businesses with a wealth of customer data. 

But turning this data into tangible improvements in customer service is a considerable challenge. 

It’s crucial for businesses to analyze this data effectively, identify actionable insights, and implement changes that meaningfully enhance customer experiences. 

Without the right analytical capabilities and tools, businesses may fall short in fully exploiting their digital resources, missing vital opportunities to improve their service delivery.

• Investing More in Customer Service

As per my experience so far, I strongly believe in the critical role customer service plays in driving business success. 

However, customer service investment is often overlooked, overshadowed by areas perceived to have a more direct impact on revenue. 

But as competition stiffens and customers become more discerning, businesses that prioritize customer service investment gain a competitive advantage. 

I cannot stop stressing this enough – good customer service is the competitive advantage.

This involves more than just finances—it requires time, effort, and a commitment to fostering a customer-centric culture. 

Recognizing customer service as a key business function can boost customer retention, enhance customer loyalty, and ultimately, stimulate business growth.

The Future of Customer Service & Trends

According to Gartner’s recent survey, “Organizations are shifting from a reactive strategy designed to limit costs to a predictive strategy that delivers additional value to customers”. 

That means rather than having a strategy that includes live chat and other reactive forms of customer service, you need to have a proactive strategy that not only resolves the issues of customers, but forces them to take further action.

This is an interesting approach because this shows that rather than benchmarking against the usual KPIs of CS like CSAT or FCR, businesses should move towards value enhancement as the success measure. 

Furthermore, a primary trend in the customer service industry will be the shift from CS departments being “cost centers” to “growth centers”. 

• Value Enhancement as a Service KPI

Value enhancement means rather than measuring your business success by asking customers for feedback and reviews only, you have to make them see more value in the products and services you’re offering.

In the form of a score, it is the best predictor of customer loyalty in the long run – more powerful than CSAT, NPS, or FCR. 

These traditional metrics depend on the customer’s perception based on one interaction and thus, aren’t a strong enough predictor of customer loyalty in the long run. 

What is Value Enhancement Score (VES)

Value Enhancement Score is a customer service metric used to measure the value that customers place on a product or service. It is a much better predictor of customer loyalty than the traditional metrics used in customer support.

It operates on the basis of two questions on which a service interaction should be evaluated:

• How the interaction has impacted the customer’s ability to use the product or service
• How the interaction has impacted the customer’s confidence in the decision to purchase the product or service

You can see how such an assessment will not only help satisfy a customer but also force them to spend more with your business and give you a better ROI.

According to Gartner’s same survey, by 2025, the success of 40% of customer service and support roles will primarily be evaluated based on value enhancement, a significant increase from the 17% recorded in 2021.

• Balancing Personalization with Privacy

McKinsey performed research in 2020 regarding consumer behaviors and privacy concerns. I’ve filtered out a few stats from the research that I am sharing below:

• Consumer-trust levels are at 44% in the healthcare and financial services sectors.
• Only about 10% of consumer respondents trust consumer-packaged-goods or media and entertainment companies.
• Two-thirds of internet users in the United States consider the privacy of their email content as “very important”.
• Half of the consumer respondents are more likely to trust a company that asks only for information relevant to its products or that limits the amount of personal information requested.
• Half of the consumer respondents trust companies that respond quickly to data breaches.
• More than 600 million devices around the world use ad-blocking software.
• More than 40% of internet users globally use incognito browsers.

Leveraging data to understand customer preferences and behavior can greatly enhance the customer experience, leading to increased satisfaction, loyalty, and overall business success. 

Technologies such as AI and machine learning play a significant role in enabling such personalization, allowing businesses to predict customer needs and tailor their service accordingly.

However, as businesses strive to offer more personalized experiences, they must also pay heed to growing concerns around privacy. 

As seen in the stats above, customers are becoming increasingly aware of their digital footprint and are demanding greater control over their data. 

They expect businesses to not only provide personalized experiences but also to safeguard their personal information.

Balancing personalization with privacy is not a simple task. It requires a careful strategy that respects customer privacy while still delivering the personalized experiences customers demand. 

Key to achieving this balance is transparency. 

Businesses need to be clear about how they collect, use, and protect customer data. 

Moreover, businesses should invest in robust security measures to protect customer data from breaches. 

This includes using technologies like encryption and two-factor authentication and implementing strict data access and management policies.

In the future, the businesses that succeed in balancing personalization with privacy will be those that view this balance as an opportunity rather than a challenge. 

• The Role of Artificial Intelligence in the Future of Customer Service

Artificial Intelligence (AI) has shown promising potential in enhancing customer service. 

One of the primary ways AI can be applied is through automating simple, repetitive customer queries. 

This automation allows businesses to provide instant responses to customers and frees up customer service agents to handle more complex issues. 

This efficient allocation of tasks not only saves time but can also significantly enhance customer satisfaction.

However, keep in mind that most of the chatbots being used today are not true AI, but merely branched logic.

Another exciting prospect of AI in customer service is its predictive capabilities. 

AI can analyze past customer interactions and behaviors to anticipate future needs and personalize the service accordingly. 

For example, it could suggest products based on past purchases or remind customers about regular orders. 

This proactive approach to service can greatly enhance the customer experience, fostering stronger relationships and loyalty.

• Internet of Things: A Game Changer for Customer Service

The Internet of Things (IoT) is expected to play a significant role in shaping the future of customer service. 

As more devices become interconnected, businesses have the opportunity to gain deeper insights into their customers’ needs and behaviors. 

This information can be leveraged to provide more tailored and efficient service, enhancing customer satisfaction and loyalty.

One of the significant implications of IoT for customer service is the ability to provide proactive service. 

For instance, smart devices can alert businesses about potential issues before the customer is even aware of them. 

This allows businesses to address and resolve issues promptly, preventing customer dissatisfaction and potential damage to their reputation. 

By being proactive, businesses can demonstrate their commitment to customer satisfaction, which is critical in today’s competitive business environment.

• The Potential of Blockchain Technology in Customer Service

Blockchain technology, although primarily associated with cryptocurrencies, can significantly enhance customer service. 

Its decentralized nature offers unprecedented security and transparency for customer transactions, increasing trust and reducing the risk of fraud.

One of the primary applications of blockchain in customer service could be in identity verification. 

Traditional verification methods can be time-consuming and prone to errors. 

However, a blockchain-based system could drastically reduce the verification time and ensure a higher level of accuracy. This not only enhances customer experience but also improves operational efficiency.

While the adoption of cryptocurrencies like Bitcoin may not transform the landscape of customer service directly, the underlying blockchain technology could significantly revolutionize commercial transactions. 

Key to this is the concept of smart contracts, automated agreements which can independently execute and enforce terms without human intervention. 

This could alleviate the burden on customer success managers (CSMs) from dealing with payment-related issues, allowing them to concentrate on enhancing customer value.

Therefore, even though a shift from traditional currencies like USD to Bitcoin may not go mainstream or create a significant ripple in the sector, the potential impact of blockchain technology shouldn’t be underestimated. 

Over the next quarter-century, it could redefine the way we conduct commerce, and consequently, the role of CSMs within this dynamic landscape.

• Cloud-Based Customer Service Platforms

The shift towards remote work and digital interactions necessitates the adoption of cloud-based customer service platforms. 

These platforms provide a centralized, accessible, and efficient way to manage customer interactions across various channels, improving the consistency and quality of service.

In addition to improving service delivery, cloud platforms can also enhance the customer experience. 

They enable seamless interactions across different channels, allowing customers to choose the most convenient mode of communication. 

Furthermore, they provide businesses with valuable insights into customer behavior and preferences, which can be used to further personalize and enhance the service.

• The Indispensable Role of Human Agents in Customer Service

Despite the increasing role of technology in customer service, the importance of human agents cannot be understated. 

Humans bring a level of emotional intelligence that cannot be replicated by machines. They can understand and empathize with customers on a personal level, which is crucial in handling complex or sensitive issues.

Balancing the use of AI and human touch is critical for the future of customer service. 

While AI can handle repetitive tasks and provide instant responses, human agents are needed for their emotional intelligence and ability to handle complex situations. 

It’s this combination of AI efficiency and human empathy that will define the future of customer service.

Conclusion – The Future of Customer Service

Wrapping things up, we’re seeing customer service change at a breakneck speed like never before. 

Thanks to the fast-forward march of tech and changing wants and needs from customers, the whole scene is getting a total makeover. 

Nowadays, customers are all about snappy, personalized service that’s spot-on, delivered through their preferred way of talking.

This new-age demand puts customer service teams in a tough spot to stay in the game and deliver. 

But every cloud has a silver lining – these hurdles could give companies the chance to rethink how they deal with customers. 

To ace in this ever-changing game, businesses need to embrace the latest gadgets, put money into upskilling their employees, and make sure they’re all about making their customers happy, every step of the way.

Looking ahead, we’re gonna see a lot more help from AI and machine learning to make customer chats smoother, provide answers right away, and guess what the customer might want next. 

At the same time, the people in customer service are going to be more about solving the tough problems and building solid relationships – that’s where heart and emotional smarts come in.

Even with all the tech changes, the heart of customer service won’t change – it’s all about making customers feel like they’re king.