How Artificial Intelligence Will Disrupt Customer Experience As We Know It

4/22/2018
Dave Fish and Brian Keehner
Key Takeaways

What? The customer experience discipline has greaty evolved over the last 30 years, and artificial intelligence is poised to continue driving that transformation.

So what? Cybernetics, the combination of people and machines, presents an opportunity for marketers to leverage technology to optimize CX.

Now what? Organizations need to accept these changes and encourage a holistic CX vision that crosses departments and breaks down silos.

​​​Customer experience has seen radical change over the last 30 years, and technology like AI is certain to continue evolving it​

This article is the first in a three-part series exploring where customer experience (CX) has been, where it is today and where it is going.


The marketing research industry as we have known it for decades is disappearing. It is being absorbed into a rapidly transforming collection of market intelligence subdisciplines.

For some market researchers, this phenomenon represents a threat—a question of whether the traditional insights role within our client or agency organizations will remain, whether survey research will have a continued seat at the table, a concern regarding the future valuation of research companies. 

For others this represents unprecedented opportunity to deliver a far more comprehensive voice of the market, transform our agency business model and substantially increase its valuation and increase in the decision-making impact of the insights we deliver.

-- by Michael Brereton


 

What would Alexander Graham Bell think about today’s smartphones? What would Thomas Edison’s opinion of the smart lightbulb be? Would Nikola Tesla drive a Tesla today? Those innovators disrupted their fields. How would they feel about the radical changes their inventions have undergone?

Over the last 30 years, CX has also seen radical change, bringing it far from its humble market research origins. To better understand this still nascent offshoot of market research, CuriosityCX, in collaboration with Michigan State University MMR program, interviewed a dozen prominent tech leaders in the CX space.

CX: A Field Disrupted

Today, CX technology is packaged by technology companies into easy-to-use systems to gather voice-of-the-customer feedback. Technology suppliers offer software as a service (SaaS) to companies that want to get into the weeds with the data while market research firms take care of the grunt work and provide expert analysis to clients.

The genesis for the CX technology space—called enterprise feedback management (EFM) or customer feedback management (CFM)—began in the mid-1990s when research companies transitioned from phone and direct mail to outbound e-mail and began building their own reporting portals. These portals were largely customized for individual client needs and essentially moved paper reports to tabular web-based reports, which proved to be an easier and more cost-effective way of disseminating data.

At the same time, new technology-focused providers saw an opportunity to disrupt the traditional research approach. Although their approaches varied slightly, the common value proposition of these EFM providers’ was this: We can deliver 80% of your needed functionality for a fraction of the cost of traditional bespoke solutions. We can do it in near real time, and we can integrate multiple data sets.

Not every player delivered on the inflated expectations. The companies that did carved out a place in the industry. Examples include Service Management Group (1991), Confirmit (1996), Mindshare--rebranded as InMoment--(1997), Empathica (2001), Medallia (2001), Qualtrics (2002) and Allegiance (2005).

Today the market is still very dynamic with many EFM providers battling for supremacy. Over the years EFM firms have merged or been acquired by larger firms. This is a trend that many expect to continue. Mike Sinoway, CEO of MaritzCX, believes that “The little guys are getting squeezed.” This sentiment is echoed by Sid Banerjee, founder of Clarabridge, who believes the industry is undergoing a transformation and consolidation phase.

However, Brad Christian, chief customer officer of Market Force, may ease concerns for smaller shops stating that, “with the continued focus on CX being one of the few remaining differentiators for many industries, I see the space growing with plenty of room for a variety of players, from self-service technology practitioners to full-service market research consultancies.”

To remain relevant, these leaders are addressing the impact the Big Data disruption has made in the field and preparing for the upcoming wave of change in the form of CX artificial intelligence (AI).

Learning from the Past

Customers increasingly show dislike for filling out surveys, and as a result, response rates continue to decline. This does not mean surveys are dead but that companies need to be more creative and engaging to elicit a response. Market Force is looking for ways to solve this problem. According to Christian, Market Force is experimenting with ways to shorten the survey for individual respondents, while imputing responses for other aspects of the experience not directly asked about. Christian says the imputed feedback is generally more than 90% accurate and is based on the information an individual respondent provides in his/her feedback.

Likewise, Customerville is very focused on infusing great design into its surveys so that they become a reinforcing brand touch point. According to Customerville CEO Max Israel, “Surveys are part of the customer experience—not just an exercise in delivery.”

CX leaders are constantly evaluating best practices to fine-tune surveys for larger quality and quantity to elicit a finer depth and breadth from respondents. “We need to make [surveys] more of a conversation by building intelligence into the survey world, says Chris Randall, CCO of ResponseTek. “We need to have smarter surveys that drill down into specifics. Attention span is decreasing, so it is important to get to a finer level of granularity quickly.”

Preparing for the Future

Another necessity is more responsibility for data collection—not just in the manner of how data is collected, which is transitioning into a conversational approach, but also for how it is managed post-collection. Well-managed data can allow surveys to become part of the customer experience by continuing the conversation and reinforcing the brand.

Feedback from surveys is just one pillar of data provided by a customer’s experiential footprint. The voice of the customer can also be heard from two other pillars: interactive spaces (e.g., call centers) and the social sphere (e.g., Facebook and Twitter). Terry Lawlor of Confirmit views all pillars as necessary to know the whole customer. Combining the solicited and expressed voice of the customer (surveys), harvested data (social media) and placing it alongside unsolicited data (such as click stream data)—from which we can make inferences such as soliciting location (even if it is a one-time opt in)—helps to create a 360-degree view of the customer. The integration of multiple data sources is key to providing better insights and is the bedrock of prediction analytics.

Cybernetic CX

Cybernetics is a word that looks like it was invented for a sci-fi novel, but its origins can be traced back to the 1800s. Cybernetics is simply the combination of people and machines. A dolly is a tool people use to move a stack of heavy boxes. We believe cybernetic CX is another tool humans can use to move more, move better and move faster. It is not necessarily about replacing people but about augmenting their capabilities and, in some cases, repurposing what they do. Instead of mundane tasks, cybernetic CX will emancipate workers to engage in more meaningful work that AI cannot do—yet.

The role of AI and the value stream of how it will assist in the future was at the forefront of the conversations with the tech leaders. We saw a clear framework emerge about how to think about AI and how it will affect CX in the future:


1. Anomaly Detection

Analysts usually look for data that is out of the ordinary. Though they have powerful tools such as Bayesian algorithms and machine learning tools, analysts still typically need to frame the problem and introduce the right variables for interrogation. In the future, the system will automatically detect the anomalies to the end user—or to the machine.

2. Problem Diagnosis

AI will aid in diagnosis much in the same way as visiting your medical general practitioner, but it will be automated. Your physician operates from understood concepts refined over years of experience. They use this knowledge to connect known patterns and determine a probable diagnosis.

3. Determine the Remedy

Every problem has a known set of possible solutions. “Machine learning and AI will facilitate moving that predictive insight into many of the technology platforms that will be available in the industry,” says Christian. Mike Sinoway agrees, saying “The differentiator [in the future] is focusing on act … having purpose-built recommendations.”

4. Auto-application (Apply the Remedy)

There is some early evidence that this is already happening in other areas. Firms such as IBM have invested marketing content creation based on individual preferences and profiles. This same technology can also be applied to potentially fix CX problems or anticipate them before they have an impact.

Most technology will not completely replace marketers, but if used it correctly, it will help them become much more effective and efficient CX practitioners. Companies such as Domino’s are using national weather data to predict the CX of pizza delivery on a rainy day. Amazon is well-known for using advanced in-line analytics to predict preferences and offer ideas for things shoppers didn’t even know they needed.

We are on the verge of cybernetic CX, but we are still a ways away from automating the entire chain, from problem detection to automated solution. But much like the progress in analyzing text analytics, we will get there soon. Most of the CX tech leaders see this as one major area of important differentiation in the future. As Sinoway says, “Data collection is commoditized, reporting is now [largely] commoditized; differentiation is in the application of the insight.”

Stewards of the Future

Regardless of the impact technology will have on the CX industry, technology alone is not enough. True success of CX programs will continue to be found in the effective application of insights and through organizations being agile enough to accept change.

“Executive engagement is critically important in CX,” Christian says. His sentiment is shared broadly. Without the mandate to work toward a holistic CX vision, departments and divisions will continue to work on individual mandates and goals. The byproduct of this creates challenges in coordinating collective action to improve or radically redesign the customer experience.

“There is a need to break down silos, which will enable the technology to follow,” says Lorraine Schumacher of Clarabridge. Siloed organizations continue to pose a real challenge to change.

Technology can’t get it done alone. “The industry is still in adolescence,” says Sarah Simon of Confirmit. “The big challenge we face is there are a lot of practitioners who need a lot of help.” Most of the experts agree that there is strong need for human help in making this happen.

“There seems to be a divergence between those firms that want to move down a SaaS, self-serve path and others being more intentional around analyzing the data and making recommendations based on those insights,” says Christian. “Given the success of both models in the marketplace today, it becomes a question of the specific needs of the brand and the level of sophistication within the business to derive and act on those insights to improve the customer experience.”

If technology isn’t enough on its own, neither are insights. “It is a big mistake to get stuck in the back room just being a ‘data whisperer’ with tacticians and methodologists rather than strategists,” says Qualtrics’ Luke Williams. Clearly the role on both client and supplier sides needs to shift from collecting surveys, scales and sampling to real business issues. We need to empower frontline employees to be business thinkers who believe they can solve real-world problems.

Both organizational leaders and frontline employees need evidence of the personal and business worth of investing in CX. Demonstrating a clear ROI for CX efforts is a major opportunity for clients and the industry. “We need to demonstrate ROI; the good news is we have gotten superior at accuracy and scalability and the ability to drive ROI,” says Banerjee.

The Future

Customer experience has existed since humans first began exchanging goods and services. In the same way electricity has always existed but was not always utilized, it just took us some time to figure out how powerful customer experiences can be.

The landscape of the industry will continue to morph as we learn how to implement cybernetic CX. The continued integration of data and insights by executives will be as important as demonstrating value by frontline employees. If used appropriately, machines will help humans complete the monotonous, predictable tasks while allowing them to handle the high-order elements. Knowing when to use which will be critical to deliver expectations to customers and worth for companies.

Our next article​ will discuss this future state of CX.


In coordination with Michigan State University, AMA continues to develop a comprehensive look at this broadened market intelligence space. The Broad School of Business at Michigan State University is one of several U.S. universities committed to developing the next generation of marketing leadership through internship-based master of marketing research programs. As part of the Michigan State University Research Transformed Collaborative, the Program’s students partner with industry experts in conducting studies to better understand this marketing research transformation topic.​ AMA continues to incorporate these findings, plus the perspectives of other industry sources and the annual AMA Gold Top 50 Report, into the gradually expanding depiction of the market.​


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ABOUT THE AUTHOR:
Dave Fish and Brian Keehner
<p>Dave Fish is the CEO and founder of <a href=https://curiositycx.com/ target=”_blank”>CuriosityCX</a>, a consumer research and customer experience consultancy. He is an academically trained consumer psychologist with over two decades of applied research experience holding senior positions on both the client and supplier side. His primary vertical experience is in automotive, financial services, hospitality, restaurant, B-to-B and retail. He knows the business firsthand, having launched more than 50 large-scale CX programs across multiple industries. He earned his M.A. and Ph.D. in social psychology from Claremont Graduate University. Fish is also an adjunct professor of marketing and supply chain management at the Sam M. Walton College of Business at the University of Arkansas and an advising students in the master of science in marketing research program at the Eli Broad College of Business at Michigan State University.</p> <p>Brian Keehner is currently pursuing a master of science degree in marketing research from Michigan State University. His areas of study include customer experience and alumni affinity as they relate to donor behavior and trends. In his current role as the assistant director of development for the Eli Broad College of Business at Michigan State University his focus is on utilizing geographical, behavioral and financial data to research, identify and match individuals’ philanthropic interests with relevant funding opportunities. Keehner earned his B.A. in advertising from Michigan State University in 2010. Prior to coming back to MSU, Keehner worked for DePaul University’s Annual Fund. There, he discovered a passion for analytics and using data to increase donor support and retention within the university’s telefund program.</p> <p>Michael Brereton is a member of the marketing faculty at Michigan State University’s Eli Broad Graduate School of Management. In 2014, Brereton retired from the role of president and CEO of Maritz Research, a position that he served in since 2003. Brereton’s industry leadership roles have included serving as a long-time board member as well as board chair of CASRO; founding chair for the CASRO Institute for Research Quality (CIRQ), an ISO certification body; advisory board chair for Michigan State University’s master of science in marketing research program; and advisory board member for Southern Illinois University’s master of marketing research program.</p>

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