The future of customer experience (CX) is more: more data, more technology, more surprising and delighting. It’s also more pressure to retain those customers, whether those interactions happen online or in-store. As customer expectations and habits change, so too must the CX that organizations provide.

Study after study shows that customer loyalty is decreasing, as customers demand more from the providers of goods and services and show their displeasure by switching brands. Identifying potential pain points and solving for them before they happen is the best way to keep customers from switching to another provider.

One of the most important reasons why organizations are increasingly embracing digital transformation is to revolutionize how they serve the customer. The future of customer experience must be intertwined with customer service to keep pace with customer needs to ensure organizations are delivering high customer satisfaction.

Take a design-led, data-driven approach to experience transformation

Building a competitive advantage through great customer experience

Here are five ways organizations can better utilize customer experience to stay ahead of the competition:

Building complete alignment around the entire customer journey

It is an understatement to say that organizations must prioritize the customer. Without customers, there is no revenue, no profitability and no business. And yet, organizations have historically failed to ensure all relevant employees have the right information on hand to make important decisions. Organizations that strive to become “customer-centric”—which means putting the customers’ needs first—will find customers return the favor with loyalty.

Expressing and communicating a mission-based strategy

In recent years, organizations have embraced subjects like Diversity, Equity and Inclusion (DEI), environmental protection and other social justice topics. While not every customer will agree with an organization’s decisions, many customers want to buy from an organization that stands for something they believe in, too. The identifying and embracing of key issues the organization and its leadership supports communicates to customers that the organization shares their values.

Becoming a personalization-first organization

Organizations need to treat every customer like they’re the most valuable customer the world. That means delivering the exact ideal user experience to them through personalization. Organizations can better personalize at scale using data.

Organizations can personalize their marketing by targeting customers where they prefer to be reached with unique messaging relevant to them. They can get a better sense of their customers’ needs by requesting individual customer feedback on purchases, inquiries and service requests.

Or personalization can occur on the product-level. For example, hotels are increasingly providing personalized experiences based on surveys and previous visits. One hotel guest may prefer a perk of a free massage, while another may prefer that they get their first drink free at the hotel bar. By designing experiences relevant to each guest, the hotel is likely to retain those customers versus a competitor that treats every guest the same.

Staying ahead of key technology trends

By now, it’s abundantly clear that technologies like artificial intelligence (AI) and machine learning (ML) will revolutionize how customer-centric organizations interact and deliver value to all stakeholders, especially their customers. These technologies will increasingly factor into multiple touchpoints with customers, from prospects asking for more information to personalized messages after purchase to customer care teams helping to troubleshoot issues.

Customers will use AI- and ML-driven self-service tools, such as generative AI apps and conversational AI chatbots, to get the information they need. And if they absolutely need to talk to a customer service professional, those employees will use AI and ML to better and more efficiently answer their questions. Organizations will also increase the use of automation to minimize effort on laborious tasks so customer care professionals can better serve their customers.

Another major technological trend organization should adopt is augmented reality (AR). For example, a key burden for customers and major cost for organizations occurs when a customer dislikes an online purchase they made and seek to return the product. Augmented reality could allow the customers to try a product in their environment before purchasing.

Utilizing more customer insights for real-time decision-making

Organizations can now track and analyze every customer interaction, especially those who are eCommerce companies. Using metrics derived from customer engagements can drive significant business value. As such, future CX strategies will be more data-driven than ever before.

For example, AI-driven chatbots can better understand what customers want and deliver the solution to them quicker because they were trained on previous customer data.

The depreciation of the third-party cookie, which tracked customers and enabled targeting on the open web has forced organizations and CX leaders to rethink their playbooks. They now must rely on zero-party data—information a customer directly shares with them—and first-party data—information organizations derive fromomnichannel tracking on owned websites, social media like LinkedIn and Instagram, and apps.

And yet, despite the CX insights available, organizations still struggle to make real-time decisions. A McKinsey study found CX leaders prioritized real time customer actions, but only 13 percent of leaders felt they had the tools to achieve this with existing systems.

The solution, as discussed by McKinsey, is to create a data lake where all the collected data pools and relevant parties have access to aggregate information to make smarter decisions. Then CX and customer service professionals can use customer relationship management (CRM) tools to take actions on this data.

Embracing the future of customer experience

IBM has been helping enterprises apply trusted AI in this space for more than a decade, and generative AI has further potential to significantly transform customer and field service with the ability to generate more human-like, conversational responses. IBM Consulting puts customer experience strategy at the center of your business, helping you deliver consistent and intelligent customer care with conversational AI.

IBM watsonx™ Assistant is a market-leading, conversational artificial intelligence platform designed to help you overcome the friction of traditional support and deliver exceptional experiences. With watsonx™ and IBM Consulting’s deep expertise in customer journey mapping and design, platform implementation and data and AI consulting, we can help you harness best-in-class technologies to drive transformation across the customer lifecycle.

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