Once upon a time all customer service interactions happened face to face. Then came the telephone. Telephones provided companies with a new channel of interaction to more effectively service a large base of customers. 

This model eventually scaled to create modern day customer support centers. But as the cost of these call centers rose, automation through IVR emerged as a way to deflect calls from the call center agent to a self-service phone maze. Further cost optimizations led to outsourcing call centers, which frequently resulted in frustrating experiences due to cultural and language differences.

The irony of this journey is that what started out as a highly personalized service experience, rapidly eroded into an impersonal, frustrating interaction.

Simultaneously, the proliferation of social media started a new era of transparency where customers could easily rant about any negative service experience. Remember Jeff Jarvis back in 2005 with his rant on Dell customer service, which sent the brand in a tailspin for months? The balance of power shifted back to the customer, making companies think carefully about their service channels.

According to trend watching, 66 percent of consumers switched brands or business due to poor customer service, a 4 percent increase on the previous year. Some 82 percent of those who switched said the brand could have done something to stop them.

With the emergence of IoT, companies have an opportunity to once again re-imagine customer service.

What Customers Really Want

According to an American Express customer service study, when 1,620 consumers were tested under laboratory conditions, 63 percent said they felt their heart rate increase when they thought about receiving great customer service. For 53 percent of those tested, receiving great service triggered the same cerebral reactions as feeling loved.

So many customers associate great service with an emotional experience. Customers certainly want it and continue to expect more in terms of what constitutes great service as technology enables new methods of interaction.

A recent Forrester study found that web self-service has now surpassed the use of the voice channel as the primary channel used for customer service.

On the surface, statistics like this seem to indicate that customers want more self-service, greater independence and less interaction. However, I think there's more to it — many customers want to be engaged with a product or brand, have their ideas listened to and ultimately have an advocate for resolving their issues in a timely manner.

Customers are growing tired of these self-service channels that have remained rudimentary even as they have moved from IVR to web and now to mobile. An emerging trend with live video chat could bring the next innovation in customer service. If you can Skype your grandmother, brands should be able to figure out how to engage their customers over video channels. Amazon Mayday was one of the early adopters for this embedding video support in their Kindle Fire HDX tablet. According to Amazon customer service “75 percent of customer contacts for Fire HDX now come via the Mayday button.”

And it’s not just the retail sector. Progressive banks such as Polish bank mBank now offer video tellers to help set up accounts, explain products and connect to subject matter experts all through a Skype-like experience.

IoT Takes Service a Step Further

IoT and customer service operations have not been directly linked before, but things are rapidly changing.

Predictions expect connected devices to proliferate at a rate of 50 billion by 2020, and the Internet of Things (IoT) is rapidly becoming a business reality. According to a recent Internet of Things study, over half of the executives (62 percent) said that they have already adopted IoT based systems or have plans to do so.

Companies are now exploring automation as a way to diagnose and resolve issues with little human intervention. This will eventually lead to preemptive service which will be able to anticipate customer issues and needs. For companies, this will provide faster resolution and lower costs, but will accomplish this in a highly personalized manner, unlike the automated, highly generic IVR experiences of the past.

The next generation of customer service is about connecting smart products, smart devices and smart people in a seamless manner to provide superior service, increase loyalty and attract new customers.

Reimagining Customer Service with IOT

Most successful companies have mastered the art of superior customer service.

When you think about superior customer service, images of Apple, Amazon, Disney, Southwest and American Express are a few brands that come to mind.

What do they have in common? Many of these companies reinvented their customer service models. They embraced a progressive usage of technology to deliver innovative service models. They also built cultures centered on servicing the customer. As a result, many of these companies became known for the service they provide rather than the products they make.

With IoT now becoming a reality, there is a new chapter ahead in terms of how companies will deliver service to their customers.

In the IoT era, just as products are evolving to become “smart” products, customer service needs to evolve into a “smart” service model. The real value in IoT is not just connecting devices to their users, but to deliver an integrated management platform, driven by big data, to centralize and automate and customer service.

Creative Commons Creative Commons Attribution 2.0 Generic License Title image by  exfordy