Four Customer Engagement Themes for 2021

This unique year has demonstrated how organizations are able to adapt at incredible pace, with the pandemic driving an unparalleled adoption of a broad range of technologies. From supporting home working to scaling infrastructure for e-commerce, customer service and engagement, businesses have been compelled to apply a major rethink and rewire. While most of these tailwinds were already in play, their acceleration is clear to see; ultimately, we have been ‘formally reminded’ about the importance of our relationships with customers. And as the storm clears, themes are emerging in the world of customer engagement.

What does this mean for Customer Relationships?

Clearly, many customer-facing operations have undergone incredible transformation in a very short period of time. In a quarterly earnings call, Microsoft CEO Satya Nadella declared that “We’ve seen two years’ worth of digital transformation in two months.” Meanwhile, the rise of D2C (already in progress) has been meteoric and unsurprisingly, customer service is now a strategic focus for most organizations. Priorities have shifted beyond the traditional loyalty program, towards serving and nurturing customers to achieve ‘in the moment’ empathy. Equally, goals are aligning around long-term relationships, customer retention and customer lifetime value (CLV).

“We’ve seen two years’ worth of digital transformation in two months”

Microsoft CEO, Satya Nadella

This sprint to customer-centricity has brought the importance of the customer journey to the fore. Already entering mainstream conversation, customer journey orchestration has therefore become a core component in the drive to customer engagement. Forrester’s Principal Analyst Joana de Quintanilha recently remarked that “with customers embracing never-seen-before behaviors and employees working remotely…journey orchestration software can help to meet rising customer expectations for more protection, support, and the continuation of services that they rely on.” [Forrester NOW: Journey Mapping and Real-Time Journey Orchestration are Critical to Crisis Preparedness and Recovery]

Customer Engagement Themes are emerging

As enterprises across all verticals strive for agility, flexibility, adaptability and responsiveness in serving their customers, a number of key themes are emerging that won’t be disappearing anytime soon. These are dominated by the composable enterprise, and the engagement driven by co-created value. Additionally, a rise of foundational capabilities required to achieve these – orchestration and autonomous operation – will be significant.

If you’re not yet familiar with the term ‘composable’ in this context, Daryl Plummer, VP Analyst at Gartner elaborates: “Composable business is a natural acceleration of the digital business that you live every day. It allows us to deliver the resilience and agility that these interesting times demand…We’re talking about the intentional use of ‘composability’ in a business context — architecting your business for real-time adaptability and resilience in the face of uncertainty”.

An understanding of intent and the capacity to respond in the moment are critical capabilities for composable businesses in this increasingly complex and fast-paced environment.

Businesses disrupted by events in 2020 are under pressure to innovate rapidly; but having taken a hit to the top-line, there is a simultaneous demand to reduce spend. So, with an inexhaustible range of evolving customer experience scenarios, the ability to listen and adapt in real-time has taken on unprecedented importance, as organizations focus on minimizing wastage in the effort to earn long term engagement. An understanding of intent (through customer journeys) and the capacity to respond in the moment are therefore critical capabilities for composable businesses in this increasingly complex and fast-paced environment. Only the fusion of Journey Orchestration (and analytics) with Real-Time Interaction Management (RTIM) genuinely achieves both*. Meanwhile, AI and Machine Learning play a critical role, as the orchestration driving associated closed-loop engagement becomes increasingly autonomous. This then provides the support for composed applications (outlined above) and experiences shaped by real-time context.

*This is why we’ve invested significant research and development in both at Thunderhead, yielding a number of unique patents for actionable journeys, multi-variate testing and the inference of customer intent.

Four Customer Engagement Themes driving strategy in 2021

1) Direct-to-Consumer (D2C) – and the importance of customer engagement     

The growth in e-commerce, but D2C in particular, has been dramatic over the last year. Whether organizations deliver a product or service (or indeed, both), this shift will continue to grow into a so-called ‘next normal’, achieving sufficient influence to draw in other industry sectors.

The events of 2020 have taught us that high quality customer relationships matter; it also accelerated the movement towards direct-to-consumer (D2C) marketing strategies. Sungmahn SEO, EMEA Head of WP Solutions at JP Morgan reported recently: “With the advent of the COVID-19 crisis, the D2C conversation across corporate c-suites has perceptibly shifted from diversification and optionality towards resilience, in a world that is irretrievably shifting from ‘offline’ to ‘online’.”

Not that Direct-to-Consumer needed validation. What critics of D2C often fail to understand (and the pandemic has made abundantly clear) is that D2C is a not a channel strategy: it’s a customer engagement strategy.

2) When it comes to customer engagement, context will trump attributes

Operating in a real-time engagement environment, our ability to understand and harness context in the moment is essential.

While ‘existing’ customer data is important per se, this can be of limited value without in-the-moment contextual insight to shape informed decisions (and potentially has a negative impact when used to make poor decisions).

Conversely, ‘actionable context’ (useful insight, if you like) is gleaned from each individual customer through the lens of their journey, leveraging long-term journey context and insight. This provides the fuel to orchestrate optimal, value-driven conversations at every interaction, which guide customers toward achieving their goals.

We anticipate that over the next year, brands will shift their focus from a preoccupation with customer data and its associated infrastructure (think ‘360-degree views’ or CDPs) to the issue of real-time customer context and insight. Context will outshine attributes.

3) Individualization at the forefront of customer engagement

In their quest to engage customers, marketers have historically considered personalization as a prerequisite for everything from starting a conversation to improving customer loyalty. This is understandable, but set to be an increasingly fractious practice, especially in a world where personal data has increasingly dense compliance and privacy complications. Instead, individualization will represent the most effective approach – and many brands have already adopted it in earnest.

While this delineation may sound a little pedantic, there are in fact important differences between the two. Privacy law (e.g. GDPR, CCPA) highlights the distinction between the ‘application of personal data’ in personalization, and [individualism] ‘context and relevance’ – and we’ve included a list of differentiators in our blogpost on Journey Orchestration.

Essentially, personalized content lacking customer context or relevance (a common scenario) is often of very limited value and may lead to incorrect interpretations. Equally, while individualization requires some personalization (or more accurately, access to personal insights), it fundamentally needs to incorporate contextual awareness and relevance. (Actually, achieving contextual relevance does not necessarily require any level of personalization.) By understanding context, we are able to inform each interaction to enable relevance for every customer, which is essential in driving value and trust.

To exceed expectations in this ‘age of the engagement’, brands will therefore shift from personalization to focus on individualization. We’ll see individual customer relationships nurtured based on shared value creation, which at scale, demands purpose-built technology.

4) Digitalisation is not the same as Digital Transformation

Much has been made over the last year around the COVID pandemic as a driver of unprecedented digital transformation. However, in much of the content there appears to be conflation and confusion between digital transformation and digitalization. There is a difference – and it’s a significant one…

Evidently, external circumstances acted as a forcing function driving the rapid adoption of technology at incredible scale. But much of this was actually supporting organizations in their quest to continue doing business, overcoming the operational constraints relating to closures or lockdown. This is not digital transformation. It’s digitalization. Digital transformation is different: it’s a deeper and far more fundamental change. Digital transformation means exploiting digital technology to create new business models and means of creating value.

In the next few years, expect to see enterprises (having been encouraged to a far greater level of digital maturity by the pandemic) to fully embrace true digital transformation. The driving force for this will be the shift to a more customer-centric operating model, redefining the roles and dynamics underpinning relationships between brands and their customers. This will be deep-rooted and impact everything, from how brands acquire and service their customers, to the underlying processes of value creation and growth. In fact, digital transformation will be the force driving the success of the digital economy and business model innovation in spanning a wide range of industry sectors.

Looking Ahead

We’ve all been talking about ‘the need for customer-centricity’ for years. But now, and boosted by the year’s unexpected demands, businesses are finally in the position to deliver on the ambition, with discernible themes emerging. In the coming months, it will be fascinating to see how they set about improving customer engagement based on the needs of every individual – and witness each of these themes playing out.

If you’d like to hear more about the role of Journey Orchestration and RTIM in nurturing customer engagement, do get in touch

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