December 15, 2023
The combination of Artificial Intelligence (AI) and data and analytics (D&A) can deliver superior, efficient, and personalized customer experience (CX). This synergic union of digital technologies can help enterprises maintain customer loyalty, provide a competitive edge, and improve top and bottom growth. Learn more about how AI and D&A can work together to deliver exceptional CX in this blog.
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In today’s digital era, AI and D&A play a vital role in enhancing customer experience (CX) in businesses. Data forms the basis of CX strategies, providing valuable insights into customer behavior. Analytical tools extract insights and meaning from this data, identifying patterns and trends to make informed decisions, ultimately boosting customer satisfaction. AI takes CX a step further with instant support from chatbots, personalized recommendations, and task automation.
Let’s next explore the current market conditions, compelling results from our research on organizations that have recently embarked on CX transformation initiatives, and eight key reasons enterprises report investing in these digital solutions.
Market challenges
The macroeconomic landscape was fraught with substantial challenges in 2023, including recessionary pressures, an energy crisis, inflation, labor market disruptions, geopolitical tensions, and trade barriers.
According to Everest Group’s recent report, Unleashing the Power of Data and Artificial Intelligence in Customer Experience Management (CXM), more than 60% of the surveyed companies grappled with changing customer demand, pricing pressures, rising costs, and heightened risk exposures like cybersecurity and data privacy.
In response, enterprises focused on enhancing customer experience through digital solutions for customer acquisition as well as retaining and optimizing customer journeys by resolving friction points. Notably, 94% of surveyed enterprises identified D&A as a crucial lever for CX objectives. About 91% were in the advanced stages of deploying these D&A solutions for CX operations, conveying the maturity of D&A solutions within this market.
Enterprises continue to invest in these digital solutions to realize the following key benefits:
- Gain actionable insights for enhanced customer experience by leveraging advanced analytics in data management, reporting, and customer analytics
- Improve employee productivity, enhance agent experiences, and reduce attrition by adopting agent-assist solutions, including AI-powered knowledge bases and call summarization
- Optimize costs and achieve higher efficiency in business processes by automating transactional tasks and maximizing value from existing intelligent automation investments
- Cater to the flexible remote work solution demand by partnering with cloud-based providers, offering Contact Center as a Service (CCaaS), Unified Communications as a Service (UCaaS), and Cloud Platform as a Service (CPaaS) integration
- Explore the potential of generative AI and Large Language Models (LLMs) in transforming conversational AI by focusing on hyper-personalization and platform-based approaches while considering data privacy and accuracy concerns
- Integrate CX consulting by adding services like journey mapping and process optimization
- Address emerging customer preferences, including self-service portals and multimodal, immersive experiences across voice, video, and chat channels during a single interaction by making targeted investments in omnichannel platforms
Developing trends
D&A and AI solutions play a vital role in digital CX transformation by offering valuable business and operational insights into customer interactions and agent performance throughout the customer journey and associated touchpoints. These insights, in turn, help optimize self-service tools and conversational and generative AI-based solutions, enhancing the overall CX.
In the current CX landscape, enterprises are divided in their investment approaches to D&A and AI capabilities. About half of the respondents are proceeding cautiously with CX D&A and AI initiatives, focusing on small-scale projects to minimize risk and ensure targeted outcomes. Conversely, 40% of organizations are displaying a strong inclination for aggressive investment in these solutions, aiming to secure a competitive edge by harnessing deeper insights into customers, market trends, and internal operations.
Among the exhaustive list of D&A and AI tools, workforce optimization, customer analytics, and Voice of the Customer Analytics (VoCA) solutions are garnering substantial investments. In fact, over 83% of the respondents are deploying, expanding, or maintaining the implementation of these solutions.
The exhibit below shows surveyed enterprises’ investment trends in D&A tools.
While enterprises are implementing CX D&A and AI solutions, many have not fully embraced next-generation analytics that involve advanced technologies to extract deep customer insights. These potential growth areas include predictive analytics that foresees trends, prescriptive analytics that proactively suggests next-best actions, and cognitive analytics that emulate human thought processes by applying AI, Machine Learning (ML), and Natural Language Processing (NLP) to unstructured data.
Impact of CX D&A and AI initiatives on enterprises
CX D&A and AI strategies have demonstrated the potential to significantly impact business outcomes by helping organizations realize significant cost savings, increase top-line revenues, and reduce agent capacity.
More than half of the enterprises responding to the survey reported they had already realized a return on investment (ROI) of 10% or above by leveraging these initiatives to increase revenues and drive efficiency improvements.
Furthermore, 52% of the surveyed enterprises have realized total cost savings of at least US$1 million, while 44% have seen top-line revenue growth of over US$1 million, and 30% reduced their required agent capacity by more than 100 full-time equivalents (FTEs.)
Enterprises that adeptly employ fundamental AI practices can generate extensive value while concurrently addressing risks and fostering AI-ready workforces. Despite achieving expectations in some areas, untapped opportunities still exist in many enterprises for D&A and AI initiatives. Concentrating on high-impact use cases is certain to guide CX strategies, ultimately leading to quantifiable business value.
The following exhibit highlights the percentage of enterprises and the average ROI they have attained in their business objectives through D&A and AI initiatives.
Obstacles to realizing benefits from D&A and AI
The rapid digital transformation accelerated by the COVID-19 crisis exposed a shortage of digital expertise due to misaligned talent strategies among many enterprises. This scarcity of suitable skills presents a significant obstacle for organizations to effectively implement CX analytics and AI.
Identifying and acquiring the necessary digital skills, along with essential soft skills that encompass technology competencies across various functions, proves to be challenging for enterprises. This is where outsourced CX service providers are pitching in and increasingly creating value for the enterprises.
Beyond skills gaps, additional barriers exist, such as outdated technology, data security concerns, integration challenges, talent-related issues, poor data quality, resistance to cultural change, and other roadblocks stemming from the rapidly evolving technological landscape and misaligned risk tolerance levels. These factors collectively impact organizations’ abilities to realize their CX D&A and AI vision.
At the foundational level, while enterprises are keen on addressing data encryption and masking, compliance, validation, and auditing aspects, they have to significantly ramp up their investments in addressing AI biases, AI governance and explainability, data profiling, and data stewardship to achieve robust results from D&A and AI strategies.
Securing executive support, fostering leadership capabilities to act on insights, nurturing workforce capabilities, and ensuring the availability of suitable technology and tools are deemed essential for successfully implementing CX D&A and AI strategies.
While using CX D&A and AI has noticeably progressed, the potential for more comprehensive adoption of advanced analytics, such as predictive and prescriptive models, remains untapped.
Enterprises are seeking increased support from third-party providers, particularly in areas such as consulting on implementation strategy, partnering on shaping digital CX operations, leading digital strategy execution, and providing ongoing technology support.
In today’s evolving climate, where organizations recognize the vital role of CX as a market and brand differentiator, enterprises must swiftly develop and sustain a robust D&A and AI strategy to supercharge their CX operations.
Read Everest Group’s Unleashing the Power of Data and Artificial Intelligence in Customer Experience Management (CXM) to gain a deeper view of how D&A and AI solutions contribute to deliver exceptional CX. If you have questions or would like to discuss digital CX strategies and solutions, reach out to Anubhav Das, [email protected], or Joshua Victor, [email protected].
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