AI, Captain: What Forrester Sees Making or Breaking Businesses in 2018

FacebookTwitterLinkedIn

Forrester Predictions 2018 report

Forrester has released “Predictions 2018,”  its year-end look-ahead to the trends and dynamics its analysts believe will shape (and shake up) the year ahead. Getting in front of these winds of change and taking action in 2018 will benefit the brave; and woe betide those clinging to old ways of doing business.

The biggest catalyst forcing change that Forrester sees is artificial intelligence:

Artificial intelligence. All the craze. Application development and delivery (AD&D) professionals are on the frontline in learning how to use AI in customer service and sales. Whether that’s through chatbots, robotic process automation or virtual assistants, you have the task of setting expectations as to what’s possible with AI. In 2018, it’s time to make AI work. You must separate fact from fiction, and start understanding the operational aspects you need to support AI while still keeping tabs on areas where you can apply it to improve customer service and sales.

The major challenges it sees facing companies as a result over the coming year (and beyond) include: customer churn (loss) from not meeting customer expectations; dismal digital efforts resulting in loss of market share; blurring industry lines that once served as protection; the upending of longstanding business models. It sounds like a dreary diagnosis, but not for those who take “decisive action.”

“2018 will be a year of reckoning and will force many companies to take decisive action,” stated Cliff Condon, chief research and product officer at Forrester. “While the economy is still growing and employment is healthy, the fate of companies has never been more uncertain. The window of opportunity to take bold action is starting to close and executives need to move past incremental approaches and make sweeping changes tuned to a customer-led, disruptive market.”

The major forces and dynamics that will shape 2018 include:

• Performance expectations for customer experience (CX)
• Success rate of digital transformation efforts
• How scarce talent affects the market
• Intelligent agents’ (AI bots) influence on consumer spending
• How well brands understand platform algorithms
• Consumers cocooning themselves from “digital noise”
• The fate of traditional advertising
• Whether firms will comply with GDPR (General Data Protection Regulation, i.e. Europe’s privacy laws taking effect in May)
• How open banking will impact financial services
• How digital platforms will impact traditional retailers
• The evolution and pace of artificial intelligence
• The evolution and pace of blockchain
• How security evolves to confront threats without degrading CX.

The promises of AI, from augmenting automation, deepening insights, and making processes more efficient, are the Holy Grail for elevating customer service and customer experience.

“Senior management salivates over the exponential gains AI is supposed to deliver to their business. Kumbayah moments occur in meeting rooms as teams begin planning cycles that embed AI technologies in their strategic plans,”  Daniel Hong, VP and Research Director at Forbes writes. “Having a successful AI-driven customer service or sales program will depend on the processes that support a blended AI approach. Humans will play a critical role in the ongoing optimization of AI.”

While AI technology is still in its infancy, its effect on customer service is delivering measurable results. Consumers are increasingly using smart assistants such as Siri, Alexa and Cortana to interact with the world, while businesses are using chatbots in increasingly natural conversations.

Predictive models and machine learning are combining to better target customers based on purchase history and psychographics AI is improving sales by mining aftersales data, increasing customer loyalty while discovering new paths for revenue.

“AI is a journey,” writes Forrester analyst Kate Leggett. “You can start small, and use AI to increase efficiency and reduce friction in the customer journey. As you move up the maturity curve, AI-fuelled engagement can enhance customer engagement, allow you to take proactive action and even pre-empt the need for customer service.”

As Forrester notes, “Customers demand what they demand. And when companies fail to deliver experience by experience or live up to their brand promise, customers will take flight.

Customer expectations will challenge everybody — leaders, followers and laggards—and inspire those who are eager to solve the pain points for consumers. Customers continuously re-evaluate experiences and reassess loyalties. So as Forrester comments, companies must always stay curious about the customer behind the data, and not get lost in a sea of data.

Leaders must adapt to, ultimately, thrive. Those slow to change will struggle. And the distance between the two will grow.

That’s why 2018 will be “a year of reckoning,” in Forrester’s view, for those companies that have held on too long or tried to bootstrap their way through transforming their business. “Simply put, the distance between customer expectations and the reality of what ill-prepared businesses can deliver is becoming so great that a slow and gradual transition is no longer possible. Incrementalism may feel good, but it masks the quiet deterioration of the business.

Whether CEOs must “start to use their balance sheet wisely, find new leaders, develop aggressive turnaround plans or do all of the above, they and their leadership teams must aggressively get on track to preserve market share and market standing.”

FacebookTwitterLinkedIn