The following was transcribed from a recent interview on The Agile Brand with Greg Kihlström podcast. 

Today we’re going to talk about how leaders need to look to their customers in order to find ways to strengthen their business. Zendesk recently released its CX Trends 2022 report, which discusses key ways to improve your bottom line by putting customers first. To help me discuss this topic and the Zendesk CX Trends 2022 report, I’d like to welcome Paulette Chafe, Head of Consumer Insights & Research at Zendesk. 

[Greg Kihlström]  Let’s about the Zendesk CX Trends 2022 report here. So, according to that report, 48 percent of customers in North America have higher customer service expectations after last year. Can you talk a little bit about why this expectation is occurring?

[Paulette Chafe, Zendesk] You know, it is interesting. A lot of other companies are also reporting this increase in consumer and customer expectations. And it's dramatic growth that has undergone. And, you know, part of this has to do with the fact consumers are owning more technology and consumers are spending more time online, online shopping, online using social. So, frankly, they're really comfortable in digital channels. And I think a lot of what we're seeing is really a manifestation of that. I mean, we saw, in our research alone, that almost 25 percent of people spend five hours a day online doing various activities for personal reasons. And what's really interesting is that it's not just the younger generations. It's really well across the board. So that's really been growing overall. And I think just consumer comfort level and their savviness and what their expectations are, they've just grown based on their experiences. And I think that's really what we're seeing right now. It's almost like it's a tipping point.

So what should companies be doing about this increased customer or consumer expectation?

I think there's a few things that definitely come to mind. I would say the top thing that a company should consider doing is get a real handle on your current state. You know, what is your company’s state of the union as it relates to customer service, like how well are you doing compared to others? And, you know, that is a good starting point. Because one thing that we've noticed in the research is businesses think they're doing OK, when in reality they're probably pretty mediocre. So I think that is a good starting point, get a handle on where you really are today, like the true picture of it. And to help businesses do that, Zendesk does offer benchmark data. You can just go to our website, under “Customer Experience,” and look up “Benchmark,” and you can see how your metrics might compare to other businesses, so you'll know if you're performing at a higher or lower level. So I think that is a good beginning place. 

I would suggest another area to look at is look at what other companies are doing; what are their experiences to, kind of, take away what you might want to do more of, like who's demonstrating those best-in-class behaviors, and what you might want to do less of. I also think that's a good learning point. We can learn from other experiences. And, frankly, I mean, that is the old adage that a customer’s best experience on another site is what they're taking over when they start to interact with you, and that's now their new frame of reference.

I'd also add to that, that it's good to, as you look at that, try to understand the pitfalls and challenges of what's really going on, as it relates to customer service. Leaders sometimes need to check themselves, I would say, as to realistically how are they doing and how are they funding their customer experience initiatives? And then I would say the last thing, the third thing, is to ask your customers, you know, what are your customer-specific expectations relative to how they engage with you? It's a good thing to go, speak to them, you know, direct conversations, even do a little bit of research if you want to do that, but that at least grounds the conversation, and it's not just about what you think you should do; it is actually road-tested against your customer base. So I think those are three pretty robust things to get you started in order to have a firm handle on how to start to meet those increasing customer expectations.

The report also points to the trend that not only are there higher expectations from customers but that customer service and customer experience are playing an increasingly important role in the growth of business. Why do you think business leaders are leaning in so heavily on customer service to drive business growth? In addition to what you've mentioned, what's changing in their calculus for this?

You know, it's definitely interesting times. We discussed how much it's been growing in importance. I tend to classify what I see in the research this year as customer service is the macro business trend. It's earned its time. It's earned its right to be out front and center. And I feel like it's happening for a couple of reasons. I would say the number one reason is that customer service has proven itself. There is a proven link between customer service performance and growth. And the business leaders have seen it. And I think we were able to really quantify that in the research. And the fact that that actually justifies and bolsters their request for additional funding, it's a proven thing that business leaders know that they can bet on that's actually going to continue to deliver for them. So I think that really has helped this case.

And I'd also add that I think they’re actually also experiencing a deluge in customer service requests. You know, particularly since Covid has come around, ticket volumes have really, really dramatically increased. And businesses did have to staff up for that. But they also see it as a bit of an opportunity right now to strike while the iron's hot, like customers are reaching out and interacting with them more and more, so that volume has grown. And it is actually a new way to connect, talk to customers, build relationships, and even potentially, you know, cross-sell and up-sell them to new product areas. So I think those are some of the reasons why they've really decided to lean in. It's proven, and it's a new business opportunity. And they're just going to double down on it this year.

Most, if not all, enterprises are listening in some way to their customers, and whether they use NPS, CSAT, CES, or all of the above in some cases, they have ways to listen to customers and gauge satisfaction or engagement or things like that. How does this change, impact how companies need to listen or maybe even what they do with the listening that they do with their customers?

Definitely, different businesses have employed different ways of how they listen to their customers, how they gather that input from them, and it is definitely a starting point. But there's a little bit of soul-searching that needs to happen here, in terms of businesses actually starting to look and say, “Where can we even begin to address simple customer issues or friction points that are really table stakes for us, right? I mean, that is a natural way for them to start to improve the delivery of customer service, take a look, see where are those friction points. And, you know, I would say, to really meet consumer expectations, companies need to start to think about how they can create experiences that feel natural and intuitive to their customers. 

It's not about complicated processes. It's about how do I take simple everyday experiences that they're having elsewhere and sort of port them into how they interact with my company. And there's a lot of data around the rise of Facebook Messenger and Whatsapp and how we're all using it just for quick little conversations to have with one another, to start and stop those conversations and pick it up later. It's just a natural way of behaving now. And businesses need to look at those types of activities and behaviors and take some inspiration from there so that they can start to create more natural experiences that consumers really tend to enjoy. So I think that's definitely a good place to look, what is natural; what is intuitive, and then how do you begin to build experiences on top of that type of thing?

Let's switch gears a little bit here and talk about something the role of automation and AI, or artificial intelligence, in delivery of customer service and customer experience. With businesses making increased investments in these areas, there's a gap that exists among consumers and businesses about exactly how to use it and even how effective it is or can be.

 In the report, it touches on this as well. Sixty percent in the report say they're dissatisfied by current chatbot experiences, but a whopping 72 percent believe that AI is good for society. So, given all that, how would you characterize what some of consumers’ top frustrations with some of the AI-driven bots are today?

AI is such an interesting topic, and, frankly, it is an area that at Zendesk we lean into very, very heavily. And we'll be rolling out some additional AI-related research in April. So it's definitely topical for us, and I think AI represents obviously a period of challenge for consumers, but because they are so positive and optimistic about it, they do seem to have a very clear sense about what they would like it to be. So consumers understand what is a bot experience more now than they've ever done before. They can absolutely identify them. And they know what they like and they know what they dislike. 

And I would say to your specific question about their frustrations around it, you know, simple things, and we're not any different than how they're responding. You know, a majority dislike the number of questions it takes the bot to identify a particular problem. They also dislike not getting an accurate answer. And I would say one of the top, top frustrations is having to start over when transferred to a human agent and losing all that knowledge that's been captured along the way. Now, the level of frustration varies by age, right? So In reality older consumers are most frustrated by the bot experiences and how hard and how long it takes for them to reach a human in order to get an answer to a question. 

So there's a lot that they wish were improved and really does bother them, as they go through the experience itself. But, again, they know what the experiences could be; they have faith and they believe that better experiences can be created. And so, from our research, what they've actually said to companies is “We're not pleased with where you are; we've cut you some slack. But that said, we expect you to get better more quickly because those are our expectations. And if you don't get it together, then we'll move on.” And so, at Zendesk, there's been a lot of conversation around “What does it really mean to create a quality experience for consumers to remove this friction and to have them feel better about working with AI tools or chat bots themselves?”

To look at it from the inverse, where are some of the areas where there's some consumer expectations about improvement? Where can brands be looking at ways to improve that AI experience?

I think we can take a little bit of inspiration from the activities where AI is sort of running in the background a lot, where consumers are comfortable. You know, nobody seems to mind when a search query is automatically completed or filled in as you start to type in what you're looking for. It's a very basic type of thing that we all sort of take for granted now and in fact kind of would like to have because it speeds up your search. And we're all pretty satisfied with our experiences with digital assistants, you know, being able to answer our questions and give us the weather. 

So customers and consumers are absolutely getting acclimated to having those experiences in their lives, and our research did show that. But they also were very clear about “I know businesses can do better and I'd like to see them do things that actually help me and make my transaction easier and more seamless,” things like the bot to give me links to information, you know, give me the direct link; if I have an exchange happening with the bot, give me the link in here now and I'll click out to it and I'll see if it provides the level of information that I'm looking for. Bots can absolutely be used to solve simple issues, things like a password reset, super-easy, great way to use a bot. Consumers are happy to engage in those things.

And what they really do like bots for and would like to see more of is being able to get the answers to questions outside business hours. So, if you don't sit down to deal with a particular issue until like 8:00 at night because you had a crazy day, they pretty well expect to have a bot to interact with them, and they're comfortable with them. At least that allows them to check something off their list and start to take care of it, rather than letting it be prolonged and having to wait until they can contact the business the next day. So, you know, they do have that sense, and they will tell you those things, and I think, if a company really sits down and thinks about what consumers want and are looking for, they can pretty quickly draft up a short list for themselves of things that they should start to factor in today and not necessarily wait until tomorrow.

One last question before we wrap up here, and kind of a long question, but what advice would you give to leaders and enterprises as they navigate the months ahead? You know, obviously there's a few things going on. I mean, one is there's rising expectations, which means there's not a lot of time to get it right, or else there may be switching, you know, from brands and things like that. But also, as we all know, over the last couple years, the future’s anything but certain. So what should be guiding leaders as they make decisions?

There are a few things, I think, that they should actively factor into their planning. And it does require some work on their part. Things just don't magically happen or fall into place. And, you know, one thing I would say is they should start to develop a roadmap for CX in their business. They need to start to plan it out and think about the experiences that they want to give today, 12 months from now, and 24 months from now. And I know that sounds hard, but it is surprising the number of businesses who have taken a very ad hoc approach towards CX and their planning. And I don't think that's going to give you the best results longer-term. You know, there has to be some flexibility because new things pop up, new experiences are created. You need to be able to build that in. But I think sitting down and sort of plotting out walking a mile in the consumer’s shoes and what the business can do to help that over a period of time will be beneficial.

I think they also need to challenge themselves on the metrics they use for measuring customer experience and customer service. I mean, you mentioned some of them earlier, about NPS and CSAT, et cetera. But I would say a lot of businesses just use them as numbers on a piece of paper and they sort of track it. What we have seen, for example, is, you know, the C-suite is now beginning to connect their performance remuneration against customer service metrics. So you really want to be vested in what you're doing and have some skin in the game. And businesses are starting to shift that way and are creating new metrics for measuring customer service experiences that go beyond age and response time. It's about the quality of the experience, the happiness of the customer, the loyalty that they're creating, and really, you know, having their compensation tied to it. 

Finally, the third area is they need to take a look at how they're funding their customer service and customer experience budgets. Our data has shown that funding is trailing behind volume and demand. And unless they fund this adequately going forward, how can they continue to exceed those expectations? Because, as demand rises, and has risen today, it's going to continue to grow even more, and so they do need to take a good, hard look at their funding, as they start to build out their plans, to say, are they giving it enough? What they did last year is not going to be sufficient to meet the demands of next year. It's just the volumes are just growing much too high, and they do not want to have customer service suffer as a result of that.

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About the Guest

Paulette Chafe is Head of Consumer Insights & Research at Zendesk. She is an accomplished and growth-focused marketing professional with extensive experience in providing exceptional executive-level marketing services for global brands and tech start-ups with an aim of achievement of desired business goals. She has proven highly proficient in devising and executing numerous marketing strategies to target specific markets for continuous business growth, as well as highly proficient in analyzing market trends and forecasting business opportunities.

Paulette is adept at leading and mentoring cross-functional teams and enhancing their productivity. Skilled in establishing and maintaining robust relationships with key clients and stakeholders. She is knowledgeable in full funnel marketing strategies, development of actionable roadmaps to drive transformation, and methods for showing and selling products or services.

About the Host, Greg Kihlström

Greg Kihlstrom is a best selling author, speaker, and entrepreneur and host of The Agile Brand podcast. He has worked with some of the world’s leading organizations on customer experience, employee experience, and digital transformation initiatives, both before and after selling his award-winning digital experience agency, Carousel30, in 2017.  Currently, he is Principal and Chief Strategist at GK5A. He has worked with some of the world’s top brands, including AOL, Choice Hotels, Coca-Cola, Dell, FedEx, GEICO, Marriott, MTV, Starbucks, Toyota and VMware. He currently serves on the University of Richmond’s Customer Experience Advisory Board, was the founding Chair of the American Advertising Federation’s National Innovation Committee, and served on the Virginia Tech Pamplin College of Business Marketing Mentorship Advisory Board.  Greg is Lean Six Sigma Black Belt certified, and holds a certification in Business Agility from ICP-BAF.