The tech driving next-gen customer service

Key takeaways:

• Customer service departments are being reframed as profit drivers that can help brands build customer loyalty.

• To scale agent capabilities, brands can use automation tools, services that provide contextual cues and avatars that convey customer sentiment.

• In the future, customer service teams will proactively contact customers to drive sales.

SAN FRANCISCO— As more purchases are made online, pressure mounts for customer service agents. Last month, luggage brand Away’s Slack messages made clear how strained customer service representatives become when an e-commerce company grows quickly. Everlane’s part-time customer service team began unionising in December, citing a lack of benefits and an untenable, high-pressure work environment. Last autumn, Rent the Runway’s customer service reps bore the brunt of appeasing disgruntled customers when a system switchover failed.

Customer service departments are still designed to bail water when something goes wrong, but they’ve also taken on a new positioning within digitally native consumer brands that pride themselves on customer relationships and top-tier service. At the same time, luxury brands that defined their service strategies in stores are navigating translating that asset to a digital setting. More than ever, customer service is a crucial resource in building customer loyalty.

Brands savvy to this shift are reframing their perception of customer service from a cost centre to a profit driver, says Harley Manning, vice president and research director at Forrester, who specialises in customer experience. Customer support metrics have expanded to include customer satisfaction, lifetime value and repeat buying, says Shawna Wolverton, senior vice president of products at customer service software provider Zendesk.

Having long invested in sales and marketing tools, brands are now dedicating more capital to customer service technology to meet the demands of businesses growing in a consumer environment that prizes high-touch interactions.

Customer service for brands and retailers has become more complex as the number of channels of communication with shoppers has increased, meaning new systems that can accommodate them have to be built. Wolverton says that direct-to-consumer brands, in particular, have excelled at connecting with customers where they are and that younger customers often prefer text messages, online chats and Facebook to email or phone calls.

Warby Parker, one of the early direct-to-consumer brands that launched online in 2010 and has since opened more than 115 storefronts in the US and Canada, built a proprietary system that shares data across both channels to get a single view of the customer. “Consumers have changed dramatically since we launched. At the time, the innovation in customer service was having your 1-800 front and centre on a website,” says Warby Parker co-founder and co-CEO Dave Gilboa. To adapt to changing needs, the company built out capabilities for customer service representatives via text, live chat, Instagram, Facebook and Twitter in addition to phone and email.

Digitally native brands often “over-index” on superior online experiences because they haven’t had to invest in high-rent stores, says Brad Birnbaum, CEO and co-founder of customer experience platform Kustomer, used by Glossier, Goop, ThirdLove and Rent the Runway.

While multiple points of communication can improve the customer experience, they increase the volume of inquiries customer service agents receive. Stadium Goods co-founder and co-CEO John McPheters says that the retailer might get two to 10 messages from the same person in an hour across different channels. Linking all these inbound messages is an ongoing challenge, he says. “We’d be lying if we said we had that solved — it’s a work in progress.”

Artificial intelligence-powered automation can help ease agents’ burden, says Sophie Conti, who built the customer experience department for LVMH’s eluxury.com before becoming a CX researcher and founder of Customer Service Lab, a consultancy that has worked with brands like Etsy and MailChimp. Robotic process automation, for example, can handle the multi-step process of a return without much human intervention. Algorithms can also be used to automatically route inbound messages to the right person, while search tools that use natural language processing can guide customers to the appropriate section of a brand’s FAQs — helping customers answer their own questions — before routing to an agent. Le Tote worked with Zendesk to embed this capability into its live chat feature and saw the number of chat requests drop by 60 per cent.

Chatbots, which use AI to emulate human conversation, are ideal for large companies that repeatedly handle the same few questions, says Conti. Dollar Shave Club, which uses Zendesk, was able to solve 10 per cent of customer interactions with a bot, and used the saved time to create additional knowledge articles and rate the bot’s performance.

Stadium Goods, which also works with Zendesk, briefly tested chatbots. McPheters says that because Stadium Goods gets so much traffic, the volume of customer inquiries was hard to manage. “Our struggle is, where do we add chats in the purchase funnel to make sure it is additive and can answer questions in the right moments?”

Solving simple problems with automation frees customer service agents to focus on complex tasks, Wolverton says. Gilboa anticipates that automation will increasingly aid customer experience teams on simple tasks like data entry or shipping updates to free up people to provide “consultative services”, such as which pair of glasses looks best.

Because of automation tools, agents are now handling tougher problems on average, Manning says. “The low-hanging fruit got picked before the tree got to the agent.”

Customer service technology can also help agents with problems that aren’t as easy to automate. Tools from platforms like Kustomer can give an agent context on a customer before they speak to them, including all previous customer interactions, helping the agent to anticipate needs, Birnbaum says. An agent would automatically see, for example, a customer’s recent purchase history and that a delivery is two days late, but now out for delivery. This “agent whisperer” technology, as it’s sometimes called, can also propose potential answers and surface relevant information.

Other agent-assist tools include CallMiner, which derives insights from phone calls, and Cogito, whose software can coach agents during calls. It might, for example, suggest they slow down or pause, and can detect when a customer is upset, but an agent isn’t picking up on that to give an “empathy cue”, Manning says. “The irony is that the software has a higher EQ than the human.”

Luxury brands, when building online customer service strategies, apply learnings from in-person experiences. To mimic an in-store environment, Los Angeles startup Powerfront illustrates what’s happening in an online store with individual customer avatars that show details such as if a shopper has previously bought something from the brand, if they have something in their cart and if they are upset, based on their last interaction with the brand.

Powerfront CEO Hadar Paz says that luxury brands have been drawn to the tool because the visualisation is more relatable than a chart or list of data. Clients include Gucci, Valentino, Balenciaga and Neiman Marcus.

The tool can also bring proactive communication from sales associates out of stores and online. If a shopper looked at a bag on a website multiple times, for example, a customer service agent might thank the customer for returning and ask if they have any questions about the bag. Powerfront found that among its fashion, jewellery and cosmetics clients, online chat conversations lead to conversion rates of 16 per cent, but when a customer service representative proactively reached out, conversion rates climbed to 26 per cent. This, Paz says, shifts the shopping experience away from an online catalogue to more closely mimicking a physical store.

“The luxury customer wants as many conversations as possible because the conversion is so much higher,” Paz says.

Going forward, the role of the customer service agent will increasingly blend with the role of an in-store sales associate, even for non-luxury brands. Glossier’s customer experience team, for example, using Kustomer, has been scaling its one-on-one connections with customers, and responds to messages on platforms including Instagram and Twitter with the goal of building meaningful relationships, rather than decreasing the number of messages, according to a company representative.

Brands are also becoming more proactive in dealing with unhappy customers. Birnbaum says that Kustomer is working on tools that help brands identify and reach out to those shoppers; for example, it might flag that someone placed three orders in one month and then didn’t place any in the past 90 days. Zendesk is working on tools that help customer service teams better connect the dots between customer service interactions and sales to allow teams to better measure their overall impact on the business, Wolverton says.

Manning, of Forrester, cautions that better use of technology is not enough to drive loyalty. At the end of the day, he says, human employees should also know how to “evoke positive emotions”.

“We are very big believers that there is a place for tech and a place for humans,” Gilboa says. “Humans love feedback from other people, so our approach is, how can we reduce as much friction for those customers and where are the opportunities to use tech to let people self-serve their needs?”

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