Re-imagining customer service with IoT

Frank Palermo,

EVP & Head of Technology, 
Media & Telecommunications, 
Americas (East Coast)

Published: February 1, 2018

Most successful companies have mastered the fine 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 re-invented 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 like 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 customer service.

The customer service journey

There was a time when all customer service interactions happened face to face. The emergence of telephone provided a new channel of interaction that allowed companies to more effectively service a larger base of their customers. This model eventually scaled to create modern day customer support centers.

However, as the cost of these call centers began to rise, automation through IVR began to emerge as way to deflect calls from the call center agent to a phone maze of self-service. Further cost optimizations led to outsourcing call centers where cultural and language differences frequently resulted in a frustrating experience.

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% of consumers switched brands or business due to poor customer service, a 4% increase in the previous year. Some 82% 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 their customer service.

What customers really want

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

So the idea of great service is an emotional experience for many customers. 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, becoming the primary channel used for customer service.

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

Many 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. There is a trend emerging where live video chat could bring the next innovation in customer service. If you can Skype your grandmother, certainly 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% 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 are now offering video tellers to help set up accounts, explain products, and connect to subject matter experts all through a Skype-like experience.

IoT takes Customer service a step further

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

Connected devices are expected to proliferate at a rate of 50 billion by 2020, and the IoT is rapidly becoming a business reality. According to a recent IoT study, over half of the executives (62%) 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, 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 to provide a seamless experience to provide superior service, increase loyalty, and attract new customers.

Connected devices enable intelligent automation

A new report from Gartner predicts that "three years from now, 5% of customer service cases will be autonomously initiated by connected devices as more objects connect to the internet. The home of 2018 could have as many as 500 smart objects collaborating in a personal Internet of things (IoT)", paving the way for more automated service.

Today, automated support processes have integrated applications and have workflow enabled business processes to try and streamline the customer service process.

However customer service has always been more than automated service trees and finding the fastest and the lowest cost way to answer a customer's question.

Self-service and 24x7 availability are

In the future, self-service will move the device itself. Devices will be able to directly interact and support customers.

According to Harvard Business Review, "Customer service in this age of the Internet of Things will take one step further and take place right on the device itself - screens to tap to search It's not just about automatically turning knowledge bases for answers, chat live on an air conditioner. The data collected, with a rep, or schedule a service 4 combined with a predictive analytics appointment."

Smart products unleash new service opportunities

Smart products are continuing to evolve beyond basic upkeep and automatic upgrades to provide higher levels of intelligence, awareness and connectivity.

From R&D and manufacturing, through distribution and after-sales support, smart product data is changing how products are built, sold and serviced.

Previously connecting products through machine to machine (M2M) support required specialized hardware and software with complex telephony integration. And even products were connected; very rarely did the first line customer support representative have access in real time.

With cloud infrastructures and mobile connectivity more sophisticated strategies are now available. The front line of customer service departments can now be armed with real-time product and field data to service your customers.

For product manufactures the integration of smart products and smart service has the potential to not only increase customer service but also increase the effectiveness of their field service technicians and accelerate product innovation.

By connecting devices and analyzing sensor data across the product population, manufactures can now spot trends, predict failures and influence product changes based on rapid field feedback. Ultimately the product is improving at a faster rate which in turn affects the customer sentiment and loyalty. Customers love efficient, trouble free, reliable products.

In the future, many product manufacturers are quickly becoming software and analytics companies to better improve their customer's outcomes and to unleash new product service opportunities.

For example, at GE, a single jet engine collects more than 1 terabyte of data on a cross-Atlantic flight, and 1 gas turbine compressor blade monitoring potential of 500 gigabytes per day. This data collection gives them gives them an opportunity to offer predictive maintenance and optimization services for more than $1 trillion worth of Internet-connected industrial equipment, ranging from medical equipment to jet engines.

Analytics creates an intelligent and proactive support model

Real time customer data combined with predictive analytics will allow customer service to go beyond basic automation. In the future, problems will be solved proactively by understanding customer information on status, location, functionality, and preferences.

The emergence of an intelligent support layer will enable actions to be taken based on real-time data and pre-defined automated processes. This allows devices to directly interact with the support layer removing the need for human interaction. The intelligent support layer will routinely take action on your behalf and notify you of the resolution.

A simple example is the smart printer that monitors toner and is able to automatically place an order for more toner based on previous buying preferences. Instead of just alerting you that your toner is low, the intelligent support layer is able to act in advance of running out of toner and notify you that toner has been ordered and will arrive in 2 days. Service moves from reacting to issues like "I can't print because I am out of toner" to proactively solving the issue by ensuring that you never run out of toner.

IoT redefines the customer relationship

IoT coupled with data analytics from connected devices are transforming the way companies are interacting with their customers. Additionally, these connected products are helping to accelerate product innovation by allowing faster, closed loop feedback directly from customers. This creates a virtuous situation where customers get better service and products and companies gain insights to deliver more personalized experiences driving higher loyalty.

Frank Palermo

EVP & Head of Technology, 
Media & Telecommunications, 
Americas (East Coast)

Frank Palermo has over 20 years of global experience as a successful technology executive, with broad-based skills including business consulting, strategy, technology, and development, financial and operational management. Frank excels at cultivating an entrepreneurial culture, assembling high performance teams, identifying emerging technology trends, and incubating innovative, high growth businesses. Frank is passionate about helping companies re-imagine their digital future through the application of technology. He frequently collaborates with organizations on ways to accelerate their innovation roadmap.

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