What Trends Will Impact the Future of Customer Service?


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I was recently asked this question during an interview with Jason Redlus, managing member and founder of the Argyle Executive Forum. We had a nice discussion about customer service organizations and the way they manage their information, knowledge, and people.

Our conversation around the future of customer service touched on so many different, salient points that I was prompted to open up the discussion to a broader audience. I am hoping you will contribute your thoughts.

At a high level and from a pure company perspective, what appears to be the driving trend across the industry is a requirement we are all very familiar with: lowering costs. The margin pressures on customer service are ever increasing and customer service executives are being asked to do more with less—however they also must either hold steady or preferably increase customer satisfaction.

At the other end of the spectrum, the customer operates in an increasingly proliferate and democratic world. Customers have access to more information, which creates a more competent customer with higher expectations around the availability of relevant information to solve issues on their own, and a much greater willingness – and ability – to turn to other providers that have better differentiation on service.

Those competing factors alone drive requirements for self-service; and although self-service has been around for a long time, contextually relevant self-service will become a major trend. The question companies need to address externally is how to make the self-service experience one that is relevant to your customer’s current situation, so that customers can gain the knowledge they need, aligned with their own situation, to solve an issue more efficiently. That is what we refer to as contextually relevant insight. Not only it drives call deflection, but it also helps increase customer satisfaction.

Internally, these factors drive a requirement for more and better accessibility to knowledge on the part of customer service agents, especially facing these increasingly competent customers. Again, the ability for agents to efficiently pull knowledge that is contextually relevant to the customer’s specific situation will drive first call resolutions up, will shrink average case resolution time, and will enable entry level agents to handle more complex issues.

I am often surprised by the disproportionate amount of investment that customer service organizations put into the call center infrastructure to route calls, transcript calls, manage workflows, standardize account pop-ups, manage traffic, etc.; relative to how little investment is made to enable customers or agents to access the knowledge needed to actually solve customer issues. Isn’t that the primary goal of customer service?

I am also surprised to see so many organizations confuse knowledge and information, and hence looking as knowledge management as an IT problem and a system of record challenge. Please open up the dictionary and you will see knowledge defined as the human capacity to take action facing an uncertain situation. Exactly what customer service agents face all day every day. Knowledge resides with people, not systems. People acquire knowledge – they gain insight – by gathering information from all sources but also by identifying and learning from other people who are experts and have prior experience about the situation at hand. Not just by logging in the knowledge base.

So for a customer service agent, knowledge resides in the collection of content sources that mine the cumulative know-how and learnings about customer and product issues history, but it also resides with the people who have worked on similar issues or products. This is why the ability to quickly identify contextually relevant experts is also critical in customer service. Failure to do so results in a suboptimal ability to solve the case, or equally bad a process where an agent wastes time recreating knowledge that already exists and often times a worse version of it.

In turn, that drives the confluence between sales, service and engineering. Enabling that triangle is critical because establishing context about a customer reaches in all three areas. Typically those departments operate in a silo. For example, engineering builds a new product and hands it over to sales. Then, the sales department hands it over to service. And there is little interaction among and between groups. Now, these three are really coming together with the consolidation of knowledge across the organization between engineering, sales and marketing, and customer service. It’s critical to solving customer issues faster and ensuring product issues get resolved faster.

At a macro level, the rate of change and the variety of information sources are increasing. Between the years 2000 and 2010, the average number of information sources a company had to deal with was multiplied by roughly two and a half times. In 2000, assume a customer service environment had five to 10 sources of information for answering customer demands and solving issues. With the proliferation of enterprise systems and digital media, they now have 25 or more sources. That’s the reality of today, and cloud based computing fuels the fragmentation even more.

I was with the EVP of Engineering of a large consumer electronics company recently. Internally they use SAP ERP, Oracle Siebel for CRM, fileshares across the company with a recent move to SharePoint (wonders what the real advantage is since users can’t get much out of it), Jira and Parametric PLM in engineering, and databases popping everywhere… Yet when they release a new product into the market, within 24 hours he has already heard about design flaws from social sources like Twitter, completely outside of the company’s domain. That speaks volumes about the importance of distilling insights from a consolidated view of all enterprise information plus social media data, because the knowledge about customers and products is an ecosystem of information and people, and not a single system.

We don’t know what the landscape will look like three years from now, and no one can predict the next paradigm shift. All we can do is focus on the paradigm of today adapting to change and being able to quickly reassemble the information and reach the people needed. That is opposed to the old paradigm of IT personnel sitting around the table discussing their information needs for the next five years.

What trends do you see impacting the future of customer service?

Republished with author's permission from original post.

Louis Tetu
Louis Tetu is Chairman and Chief Executive Officer of Coveo. Prior to Coveo, Mr. Tetu co-founded Taleo Corporation, where he was Chief Executive Officer and Chairman of the Board of Directors. In 2004, Taleo was recognized as the 11th fastest growing technology company in the United States.


  1. This is a very exhaustive post on a topic that happens to be close to my heart. Here are my views on the challenges and evolving trends in the customer service business.

    Firstly, the topic of apparent design flaws being identified immediately after a release of a new product or a new release. This emphasizes the need for product development to be based on end user inputs and business requirements. No longer is it possible to design and develop a product in a controlled lab environment and then put it out for the customers to use. We see this shift happening in many of the emerging sectors and within the start-up world.

    Secondly, on the confluence of Sales, Service and Engineering – it is a point well taken. To have a successful customer service team, it is becoming absolutely necessity for the service personnel to first use this solution themselves before they can provide support. In larger enterprises, the customer service folks require to be involved in the pre-release testing cycles so that they are better prepared for the post release support. In smaller companies, we see the evolution of a combined engineering and support teams. An engineer is also responsible to support (not as a last but as a first line of support) and should hold the responsibility to address the customer problems so that they can loop back the learnings into the future development cycles.

    Thirdly, a need for developing a methodology for the bug fixes (applied to one customer) available to all other customers in an easy to consume fashion. Organizations need to go beyond secure firewall and access requirements to publish these fixes and recommendations. Unfortunately, customer service also happens to bring in profits by way of maintenance fees and so organizations have very little incentive to openly share the fixes. Proactive fixes to bugs should become the order of the day but we are probably some stretch away from this desired state.

    Fourthly, this is probably related to the point above. While computing the costs of Customer Service, we should compute not just the actual costs to service a customer, but include cost of repeat business, cost of goodwill, cost of referral and probably a few other associated costs. These are costs when the organization loses the business due to bad service and translates into revenue or profits when the organization has a delighted customer. Probably this isn’t much of an issue with smaller vendors since they don’t have the luxury of charging maintenance fees. In recent times, some of the larger vendors are beginning to address this issue as well since losing an installed base customer to competition is beginning to hurt them too. (E.g.,) After selling ERP and not being able to sell CRM hurts real bad and not to mention other associated products that could be sold to the same customer.

    Finally, the customer service team needs to be managed by a manager who has been experienced in sales or has the desired attitude to address customer issues quickly and efficiently. In organizations, where the customer service management team is staffed with folks with prior customer facing experience, there have been significant benefits.

    Rather a long comment but as I warned right at the outset, this happens to be a topic so dear to me.



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