6 Tech Trends That Are Transforming the Customer Experience

A snapshot look at technology that's disrupting customer experiences and how companies can leverage these trends.
Customer Experience

It's unquestionable that companies must keep up with rising customer expectations or become obsolete. But new product features and lower prices are no longer enough; forward-looking companies are using experiences and data-driven strategies to beat the competition. For example, on-demand services and increasingly interconnected devices are already upending business models and customer experiences with more changes on the way.

As we kick off a new year, here's a list of the most notable technological trends that are transforming customer experiences.

1. Smarter Algorithms are on the Rise
Machine-learning algorithms are still far from perfect but they're continuing to gain traction and well, learn more. Google, for instance, releases monthly reports on the progress of its self-driving car project. Recently, the driverless car learned how to identify and detect situations through sensors where making a right turn on red is permissible. Its algorithm has also been taught to drive more cautiously around children, who may move unpredictably.

Algorithms are also increasingly handling more tasks, allowing marketers to focus on more difficult projects. "It's exciting to see companies begin to trust algorithms enough that they don't need to constantly monitor them and instead shift their focus to other areas of the business," says Leslie Fine,vice president of data and analytics for Salesforce Marketing Cloud.

As an example, Fine points to brands like Room & Board and Rue La La, which are using Salesforce's Predictive Scores and Predictive Audiences to segment and target prospects and known consumers with more speed and granularity. "I think what you'll see next is brands becoming more sophisticated in how they use analytics and algorithms to create very personalized customer journeys across channels," Fine says.

2. Video Offers Unique Engagement Opportunities
From real-time video streaming platforms to virtual reality videos, video technology has come a long way. And as people become accustomed to creating and sharing content via video, brands are following suit. Videos provide unique opportunities for brands to engage consumers that beat other mediums. Whether it's a professional video or recorded on a smartphone, videos are capturing growing audiences. Forrester Research predicts that video ads will capture about 55 percent of the total display ad spending by 2019. But don't create a video just for the sake of doing it, warns Henry Truong, CTO at TeleTech."You want the videos to add value," he notes. "Whether it's walking someone through a complicated repair or adding more depth to a marketing campaign, make sure there's a reason why you're using video, otherwise it's a waste of time.

3. Voice Recognition Is Gaining more Usability
Voice recognition technology continues to improve, offering more and more uses in consumers' daily lives. Last November Amazon garnered a lot of buzz with the launch of Amazon Echo, a Bluetooth speaker with voice recognition technology (known as Alexa) that makes it a "home assistant." Echo connects to Alexa, which enables it to interpret questions and requests from the user such as looking up weather forecasts, preparing a shopping list as a text file, and even controlling lights and switches through a compatibility with other devices like WeMo, Philips Hue, and Samsung SmartThings. Amazon is also opening up its Alexa Voice Service to third parties which will allow more companies to add Alexa to their products.

We can expect to see more examples of companies integrating voice recognition technology into their products and services, Truong says. "Artificial intelligence is rapidly advancing and that includes improvements in voice recognition which will affect not just the contact center, but other industries, like retail, as well," he notes.

January 2016: Poised to Disrupt The Digital Future

4. Contextually Relevant Ads get a Boost from Ad Blockers
Apple sent a shiver through the ad industry this year when it equipped theiPhone 6s with an operating system that allows users to install software thatblocksbannerads. And according to some estimates, ad-blocker adoption in the U.S. is growing. A December survey conducted by Digital Content Next, a digital publishing trade association, found that 33 percent of consumers are likely to try ad-blocking software over the next three months.

Even if ad blockers aren't widely adopted, it would be na? of marketers to think that they can ignore the fact that consumers want better experiences. "Consumers are tired of pages loading slowly with badly designed ads," noted IAB President Randall Rothenberg at the IAB Mixx conference earlier this year. "People want a better experience and if we don't change, they'll [find a way to] simplify the clutter and speed up the Web."

Native ads, which are meant to look like the content surrounding them, are being touted as a solution to ad blockers, but they still have to be relevant, notes Kevin Knight, Pinterest's head of creative and brand strategy. "Making ads more contextually in sync with the platforms they're hosted on leads toahugely superior experience compared to therepurposed noise people are used to," Knight writes in a Forbes column. "For the advertising industry to fully address the threat of ad blocking, platforms and publishers need to move beyond simply building products that make it easier to transfer traditional creative to digital mediums."

5. Cybersecurity Is Becoming a Top Priority
A data breach can be disastrous for a business and its brand. Companies can't afford to lose their customers' trust and are investing more resources and attention on security measures as reports of data breaches continue to grow. By 2018, more than half of organizations will use security services firms that specialize in data protection, security risk management, and security infrastructure management to enhance their security capabilities, estimates Gartner.

"You can't run a business or personalize your offerings without customer data and so businesses are finally treating cybersecurity as a priority," says Esmeralda Swartz, vice president of marketing enterprise and cloud at Ericsson. "And in the move towards the Internet of Things, we're seeing conversations about data security come up more often as companies realize that robust and secure data connections will play an increasingly important role in business."

Taking a proactive stance on security is critical, Swartz adds. The companies that will get ahead are the ones that have a "culture of security" in which every employee understands his or her role in protecting its data assets, and has the necessary tools and resources to do so.

6. Partner Ecosystems are Critical
Some of the most effective business partnerships result in companies with complementary products and services that drive better customer experiences and business models. But in order to be effective, they must be win-win-win relationships, notes Paul Hagen,senior principal of customer experience at West Monroe Partners.

As an example, Hagen points to the "Lyft Ecosystem" in which Lyft, the car-hailing company, formed a partnership with Starbucks since most customers drink coffee during their morning commutes. Lyft also formed partnerships with Shell and Hertz to help drivers get into cars and pay for gas. "It worked because Lyft benefitted an entire ecosystememployees, customers, and partners," he says.

As society moves deeper into an on-demand economy where customers prize convenience and availability, partner ecosystems will become a competitive differentiator. "These partnerships also require a focus on customer outcomes, not on just pitching another product," Hagen adds. "Most companies focus on data to enhance targeted marketing, but companies that do this miss the opportunity to use that data to achieve successone of the best practices for sharing customer data is to be transparent; it's all about trust. The more transparent you are about what's being done with data, the better."

Other tech trends such as virtual reality, drones, and many others are also poised to change customer experiences, but integrating all of these trends is difficult, leaving stakeholders with few results. The problem is that efforts to improve the customer experience "often lack a single owner or sponsor within an organization," observes Jake Sorofman, research vice president at Gartner. "Companies need a single locus of authority to oversee cross-functional customer experience initiatives and to align resources to a well-defined set of investments and priorities. When customer experience is everything, it's nothing. Clear leadership and direction ensures that well-meaning stakeholders don't work at cross purposes in their attempts to earn customer loyalty and advocacy."

Therefore, while it's important to stay abreast of the latest tech trends that are shaking up industries, having a plan to actually implement these trends is just as important.