Customer experience trends: Why predictive analytics failed and more

Bluewolf co-founder Eric Berridge looks at customer experience management in 2016, predictive analytics challenges and why customers must be at the center of your strategy.

As companies struggle to acquire and retain business, managing the customer experience is becoming all the more...


SearchCRM recently sat down with Eric Berridge, CEO and co-founder of Bluewolf Group, a research and consultancy firm in New York, to discuss some of the key customer experience trends as businesses prepare for 2017 and beyond. He talked about the role of data and predictive analytics in forging customer relationships, as well as the growing importance of new customer communication channels, like voice in the battleground for customer loyalty.

We always talk about the importance of data to decision-making, but how important is data to business in 2016 and 2017?

Eric Berridge: Data is currency -- it is to be protected and nurtured, and [it] will become the most valued currency inside an organization.

How that data is nurtured is the critical component. As consumers, as individuals, we have been pretty open with our data. We are experimenting in this digital world ourselves. But consumers are going to get smarter about what they share. We will share our data only insofar as they are getting something in return.

Eric BerridgeEric Berridge

For example, I'm a big StubHub fan, and I can go to concerts, sporting events. I trust the brand. When I downloaded the StubHub app, it asked me whether it can access my music library. They want to market events for those musicians I like directly to me. So, I said, 'Yeah, go for it.'

But as soon as they do something I don't like, such as market bands that have nothing to do with my taste or sell my information to other providers, I will push back on those requests. There is this quid pro quo thing going on. It's a give-get world.

The election seems to have indicated that predictive analytics isn't as prime-time-ready as we thought.

Berridge: The era of big data is upon us. To truly predict what will happen -- for a business to be able to predict what will happen with customers, for a salesperson to predict where to spend their time -- we need all the data. We can't make assumptions based on a subset of the data. As organizations think about analytics, they need to have an imperative across their enterprises. They have to grab data from every data source; they have to have a cognitive platform in place to evaluate that data and make inferences and assumptions.

In the election, we didn't look at all the information. We only looked at subsets at the data that we thought were relevant in predicting the outcome. The [Donald] Trump campaign went deep with Facebook data to figure out what was going on with the fringes of the electorate, which is why he went to Wisconsin and Michigan at late stages of the election -- against the advice of all the pundits.

There are platforms that can analyze this unstructured information and measure sentiment and measure things a traditional relational database can't measure. These newer platforms will drive this next wave of predictability. It's going to be a journey and a long road for organizations.

I've heard about voice becoming the new 'form factor.' How true do you think this is, with technologies like Alexa and Siri?

Berridge: If we can get into the path of our customer, and treat them like human beings and interact with them like human beings, we can get back to the future.

Cognitive platforms that can make sense of voice, that can detect emotion, that can understand what is going on with a customer and respond like a human being, will drive customer experience to a new level. I'd much rather talk to someone than ... type on a piece of glass. I'd much rather laugh or cry, or raise or lower my voice -- even if it's technology that I'm dealing with. That's how I want to be treated as an individual. Because many organizations don't have one-on-one relationships with customers, the ones that do can sell their products at a premium. Some companies are focused on maintaining their back-office process, rather than how you want to be treated as a customer.

This is why Amazon is selling Alexa and enabling customers to walk aisles and just walk out [with the launch of Amazon Go].

How important are customer experience trends, like artificial intelligence and chatbots?

Berridge: The guiding principle needs to be to put yourself in the shoes of your customers. Understand the experiences you're pushing out, because those can go south.

The guiding principle needs to be to put yourself in the shoes of your customers. Understand the experiences you're pushing out, because those can go south.
Eric BerridgeCEO and co-founder, Bluewolf Group

I have more sympathy for a person on the phone who doesn't get what I mean than I will for a chatbot. You have to think about what's being received on the other end and how it's benefiting the customer. But the flipside is that if it processes my need faster, I'm going to be thrilled.

Are companies striking the balance right between human and technology interaction in customer experience?

Berridge: The goal isn't to save money, but to make money to drive a premium experience, to drive higher margins. So, you're not in this race to the bottom in customer experience and customer service. Many have gone through massive BPO [business process optimization], but most were bottom-line-oriented. Customer experience initiatives are top line, not bottom line. This is what brings innovation from most brands.

To improve customer experience, most companies are driving hard on the integration of sales, service and marketing departments -- at least in their rhetoric. Do companies know what that means, and are they ready to integrate these processes and technologies?

Berridge: No, most organizations don't have the right processes in place -- particularly the larger ones. Many are trying to solve that through M&A [mergers and acquisition]. They can get stuck trying to rebuild back-office processes, which are hard to put in place. Almost have to start fresh. The wrong approach is to start with BPM [business process management]; the right approach is start with innovation.

Are the internet of things (IoT) and virtual reality (VR) poised to improve customer experience? Or, has the hype galloped ahead of companies' capacity to absorb the changes necessary to make business use of these technologies?

Berridge: IoT is ahead of virtual reality. With IoT, we talked about predictive analytics, we can't rely on subsets to make decisions. With IoT in manufacturing and connected devices, you can pick up so much data in real time. In the past, the challenge has been how to capture and what do I do with it? Today, IoT feeds customers' experience, because we have so much more information about products and services.

With virtual reality, we're looking at 2018 before we see real-world examples. VR is all about the interface -- enabling customers with the art of the possible. I see a lot of investment from providers.

What else haven't we touched on that is a theme in these customer experience trends?

Berridge: Organizations are rethinking customer experience and the platforms they use for it. They are rethinking in a way that puts the customer at the center of the platform. That doesn't sound revolutionary until you realize that most companies in the last 25 years have built systems around their products, not around their customers.

SAP is classic example: SAP is a system that you roll out to support your supply chain, to support how products are manufactured, how products are sold [and] accounted for. The customer data is embedded in those processes, but the customer is just a number or an invoice. Now, companies are keeping that back office in place, but layering on top a platform that is truly about the customer.

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