The Advent of Digital Customer Relationships

The explosive adoption of the Internet has created a new kind of Web-savvy customer who expects a rich, efficient, personalized online user experience that’s accessible 24/7 via any online access point — Web, mobile device or social media — and that provides consistent engagement across multiple channels.

To get a sense of just how impressive the growth has been, consider some e-commerce statistics Forrester reported in March:

  • Considerably more than half of the 177 million U.S. online adults — 105 million — had two or more different types of devices connected to the Internet, and at least one-third had at least four.
  • “SuperConnected” consumers — those who dominate mobile usage — represented 21 percent of U.S. adults, accessing information and each other as never before across a plethora of these rapidly changing consumer technologies.
  • In 2010, U.S. households reported that they would spend as much time online as watching TV.

So what does this mean for businesses? Simply put, in order to succeed in today’s online-centric world and meet the demands of the Web-savvy customer you have to create positive digital customer relationships. Gone are the days when businesses can simply do what is best for the business, with little or no focus on the customer’s desires.

In the age of digital customer relationships, the customer dictates the terms of engagement. That means CRM can no longer focus on efficiency and cost reductions alone, but rather, must strike a balance between streamlining operations to improve operational performance and a high-touch approach; doing so will reward a business with increased loyalty and new customer acquisition, which will reflect positively on the bottom line.

To meet the growing needs of the Web-savvy customer, a new wave of solutions coined “Intelligent Virtual Agents” (IVAs) have made their way into progressive marketing, sales and service organizations. The promise of IVAs — to create successful digital customer relationships by melding the benefits of anywhere, anytime accessibility and 24/7 convenience with a rich, personalized experience — has also captured the eye of both innovative companies and leading analyst firms.

In two to four years, in fact, IVAs will become the industry-standard method of online customer interaction, Gartner Research has predicted. Clearly, IVAs are quickly becoming a critical component of CRM strategies moving forward — a must-have versus a nice-to-have.

Ready to Get Started? Lessons Learned

Before using an IVA to foster successful digital customer relationships, businesses should consider the requirements and customer experience across the entire digital customer relationship lifecycle. The following six stages should be considered:

Engage: Your IVA must provide 24/7 accessibility via the most popular online interaction platforms in use by consumers today — Web, mobile devices and social media.

Converse: The IVA must not only be equipped to engage in an interactive conversation with the consumer to quickly and accurately understand the consumer’s intent, but also be tailored to your company’s image, brand and tone.

Respond: The IVA’s mission is to respond quickly, accurately and consistently in order to guide the user to the one right answer or allow consumers to undertake appropriate actions themselves to resolve their issues. A more compelling user experience can be further created by tying into back-end systems and allowing the IVA to undertake actions on behalf of consumers at their request, while creating a positive experience.

Channel: Consistency of user experience regardless of channel is critical, but equally important is getting customers to the right channel. If questions or issues are outside the scope of the IVA’s trained expertise, or users express frustration, the IVA must intelligently direct them to appropriate channels to effectively resolve their issues and create positive customer experiences. When doing so, the IVA must be able to seamlessly transfer the consumer and inform the receiving channel of the full context of the conversation.

Listen: One of the downsides of traditional online self-service options such as search and FAQs is they tend to be a black hole — you can’t engage the customer or determine the quality of experience. IVAs address this issue. Each conversation an IVA has with a customer can be captured and analyzed to understand the individual “voice of the customer” and aggregate conversations to understand trending topics across all customers. Tracking popular topics customers ask about can give you real-time data into which issues are most prevalent and which are rising or falling in frequency, as well as identify new opportunities on which your business can capitalize.

Measure: You measure the performance of every aspect of your other channels, and your IVA should abide by the same stringent ROI goals that you’d apply to any CRM strategy. Whether to increase customer satisfaction or resolution rate, to measure leads, conversion rates, clicks, or length of engagement, the point is you must measure the results to get a clear view of its value.

Intelligent Virtual Agents Defined

IVAs can be deployed on the Web, mobile devices, and social media to engage today’s Web-savvy customer. An IVA is a digital persona that provides convenient, timely, automated assistance by engaging in a personalized conversation with customers, responding quickly and accurately to their online requests, and interactively guiding them to find information, performing tasks on their behalf or even passing them to a different channel as necessary (e.g. a live person).

An IVA marries the knowledge and performance of your best sales, service or marketing professional with the convenience and accessibility of self-service to deliver the best possible customer experience at a fraction of the cost of traditional channels. IVAs also offer the advantage of multichannel awareness; they are designed to assimilate into your existing CRM channel strategy, not add yet another standalone channel.

As compelling as the technology sounds, keep in mind that IVAs are not designed to replace, but rather to complement your existing CRM channels to meet the needs of the Web-savvy customer. IVAs leverage existing customer profile data housed in your CRM system to create a personalized engagement uniquely tailored for each and every customer. They are also multichannel-aware.

If a consumer makes a request outside of the IVA’s trained areas of competence, it will guide the consumer to the appropriate channel. When transferring the consumer to an alternate channel, the IVA passes along a transcript of the conversation to the live agent to avoid the frustration of the consumer having to restate the problem. By seamlessly picking up where the IVA left off, live agents resolve issues faster and consumers tend to rate these interactions higher.

The Future of IVAs: Proven and Ready for Rapid Adoption

Based on the positive benefits to both consumers and businesses, virtual agents are poised to become the new standard for customer interactions in the next four years and an integral part of CRM strategies. However, while rapid adoption is in the forecast, it is important to remember the goal is to get closer to your customer and forge a digital customer relationship.

A thoughtful approach to an IVA will bring you closer to your customer, but cutting corners in your IVA development, deployment and ongoing maintenance risks alienating your customer. If you are considering joining the ranks of progressive companies already using IVAs to build successful digital customer relationships, best practices indicate that IVAs should be integrated into your overall CRM strategy, and designed to foster an ongoing engagement between the consumer and your organization. Approaching it in this manner will help your business transform the promise of virtual agents into real, tangible ROI.

Steve Adams is CEO and president of VirtuOz

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