The future of customer service
  • Tim Knight, Partner |
6 min read

Service-led businesses are built on the experiences they provide to customers. The digital revolution has led them to reimagine those experiences, while driving new expectations of what good customer service looks like. And the COVID-19 pandemic has only intensified this transformation.

In this context, the Our Digital Future event dedicated a breakout session to The Future of Customer Service. I was joined by a fantastic panel to explore how service-led organisations can, and must, put the customer at the heart of everything they do:

  • Claire Sharp, Customer Director, Northumbrian Water
  • Steve Daniels, CSO, Pozitive Energy & Co-Founder
  • Amy Marshall, Director, Energy and Natural Resources, KPMG 

A changed landscape

The pandemic has had a seismic impact on how organisations serve customers. Our Nunwood Customer Experience Excellence report suggests that 58% of people have changed the channels they use when interacting with brands and that 80% of them intend to stay with their new channels.

In response, firms have accelerated their digital initiatives, opening up new channels and improving operational efficiency. This has meant implementing new business models, and connecting the front, middle and back office. Frontline service operatives have seen far-reaching change as a result.

As we emerge into the post-COVID-19 world, businesses in service-led sectors (such as telecoms, banking, utilities and travel) must get to grips with a fast-changing set of market dynamics. To achieve this, smart organisations are looking at how to predict changes in customer needs, technologies and market trends. The future of customer service will be anticipatory.

So how can service-led businesses meet the demands of today’s – and tomorrow’s – customers, while managing costs and staying compliant? What role will technology play in delivering differentiated experiences that give them a competitive edge?

Firms face a complex web of challenges as they look to build the customer experiences of the future:

 

  • The integrity economy
    What customers value is changing: nine in ten say they won’t do business with organisations that put profit ahead of social purpose. In the integrity economy, what worked in 2019 may no longer be appropriate today.
  • Cost and commercial pressures
    Executive teams are contending with demanding cost agendas as investors demand that strained P&L accounts are balanced. Forging a sensible link between better service and lower cost is more important than ever, and investment in digital is one way to reconcile this.
  • Responsible conduct
    All eyes are on how businesses behave: 56% of consumers say ESG practices have an impact on their choice of who to buy from. Regulatory scrutiny is an all-time high, as are market expectations of fairness and sustainability. Responding to these pressures means more than ‘doing no harm’. It means embedding responsible conduct into every customer interaction.
  • Customer-centric culture
    The new customer is also the new colleague. Employee expectations are evolving, and meeting them will require widespread leadership, EX and workforce change. This goes beyond virtual contact centres and better video conferencing; it will demand news ways of engaging employees and new leadership standards.

Lessons from the energy sector

What can we learn from the experience of the energy retail sector, where the customer experience has been transformed by a new breed of new, digitally led players?

Until recently, the industry had been tarnished with a less-than-positive reputation for customer service.

During the discussion, Amy outlined how the Big Six, hamstrung by complex legacy systems and platforms, have struggled to deliver satisfactory call wait times and complaint handling. Ultimately, the regulator saw fit to step in and impose stringent performance targets.

Then came a wave of market entrants: firms like Ovo, Bulb, Octopus and Pozitive Energy.

Starting from scratch, these disruptive businesses lacked the baggage of poor customer service that hampered the Big Six. They shaped their experiences, systems and cultures around customer needs, and developed highly personalised, propositions that were easy to use and understand.

The market share gained by these providers illustrates the rewards on offer for firms that exploit digital technology to deliver service excellence. 

A case in point

One such success story is Pozitive Energy, which hit £1 billion in sales within just five years of launch. Pozitive’s CSO and co-founder, outlined how the firm put technology at heart of the business, to create an offering built around customer requirements. 

“We describe our approach as ‘technology with a smile. We blend digital with a human touch to provide exceptional customer care,” Steve said.

Pozitive goes all-out to make life easy for customers. However complex its back-end technology, the firm’s portal and apps are designed to be simple to use. The company’s acid test is: could someone with no knowledge of energy easily find what they’re looking for?

The business adapts its systems to customers – for example, allowing them to create their own bills within their ERP or financial software. “Whatever they want, we’ll adjust our system to it,” Steve affirms. “That’s a real differentiator.”

“We build and maintain our systems in-house, in the cloud, which allows us to respond nimbly to customer’s needs.”

Another key innovation is the use of AI to record customer sentiment, by analysing how customers talk to contact centre staff. This helps employees to approach each individual in the right way, while the broader insight it generates informs staff training. 

Transforming the customer experience

For Northumbrian Water, regulatory pressure presented an opportunity to bring about a step-change in its customer service.

In April 2019, Ofwat introduced C-MeX, a stringent new customer service benchmark. This ushered in significant financial rewards for the best performers – and penalties for the worst.

In response, Northumbrian Water set the bar high when it came to improving its customer service. With a strategy to provide ‘unrivalled customer experiences’, the firm targeted a net promoter score (NPS) of +70 by 2025.

Claire explained that the firm began with its customers’ expectations. Research consistently showed that customers wanted Northumbrian Water to:

  • deliver an experience that feels special
  • keep its promises
  • take ownership and resolve issues quickly
  • keep it local
  • make digital easy.

With these demands in mind, Northumbrian embarked on its biggest CX transformation programme for 20 years, which included:

  • designing and implementing a new customer operating model
  • investing in new billing, omnichannel and contact centre systems
  • launching new customer websites and apps
  • expanding its inhouse digital team, so as to rapidly evolve its customer experiences
  • instilling a customer-centric culture throughout the organisation.

And the efforts have paid off; Northumbrian has taken top spot in the CMeX rankings, while jumping 112 places in KPMG Nunwood’s C-Mex rankings. 

A connected experience

The experiences of Pozitive Energy and Northumbrian Water demonstrate that customer service is an enterprise-wide challenge.

Customer journeys are too complex, and expectations are too high, for a standalone functional response. You need to connect the whole business to the customer.

But a connected approach won’t be possible without making the right technology choices. That means analysing your data to understand the customer and cost outcomes you’re after; then identifying digital solutions that deliver.

Excellent service is digital and innovative; but it’s also human and authentic. Businesses need to balance the power and promise of technology with the ability to connect and engage with customers.

To hear the session in full, please take a look at on-demand recordings here.