1 Customer Engagement Now Real Time is the Right Time A Medallia Study CUSTOMER ENGAGEMENT NOW02 Customer Engagement Now Methodology Medallia commissioned a panel survey of 3,000 consumers from three countries the U.S. (1,000), the U.K. (1,000), and Australia (1,000). The collected sample was matched to the census of each country on age and gender. 03 Customer Engagement Now The digital transformation has revolutionized the lives of consumers, who now use a variety of digital devices every day from smartphones and virtual assistants, to messaging apps, connected TVs, and chat bots. Eighty-two percent of consumers currently have or use connected devices to the internet younger generations (Gen Z and Millennials) at 92 percent with an expected increase in smart technology usage in the next five years. The connected consumer Key Insights While some consumers still communicate with brands in person or by mail, most prefer digital channels such as email, social media, online chat, connected devices, messaging, and apps and simultaneously demand an impressive set of capabilities across these mediums. Thirty-five percent of consumers want to be able to ask questions about a service or product through messaging apps or text, and the same proportion want to give product or service feedback through a brands mobile app, while about a fifth of consumers would like to live chat with a representative through a connected device. Customer feedback goes multi-channel Consumers no longer respond to long customer surveys because they believe their feedback will not be read or acted upon. We found that 44 percent of consumers have abandoned a customer feedback survey without completing it, primarily because of its length. In fact, of those who abandoned a survey, 57 percent did so because it was too long. It is not just long surveys that are turning people away. Half of consumers reported ignoring a customer survey because the company didnt make enough of an effort to resolve past issues. Traditional forms of collecting feedback are no longer effective Connect in the moment: from post-experience communication to real-time conversation and action Todays consumers have become accustomed to the instantaneous nature of services and subscriptions, making real-time engagement the new industry standard. Our study revealed three consumer expectations that are, or will soon, become the new norm. 1. REAL-TIME ENGAGEMENT ACROSS CHANNELS To ensure great experiences, brands need to engage customers in meaningful real-time conversations and address customer problems the instant they arise. Seventy-eight percent of respondents expect the ability to contact a customer representative immediately when they need help. In addition, the majority of consumers expect an immediate response to their feedback across digital channels: 67 percent expect an immediate response from an online chat with a representative, 57 percent from a video/voice chat, half from an online chat with a bot, and 29 percent when texting with businesses. 2. A TWO-WAY CONVERSATIONAL DIALOGUE THAT INFLUENCES EXPERIENCES IN REAL TIME Today, the ability to provide feedback to businesses after a transaction is complete is not good enough. Over half of consumers want to be able to provide immediate feedback about their interaction with a brand. Why? Because they want businesses to react instantaneously and improve their experiences in real time. Over half of consumers report that a bad experience they had in the past year could have been improved in the moment if they had the opportunity 04 Customer Engagement Now With consumers adopting multiple technologies and engagement channels, companies should optimize digital experiences across all touchpoints. Brands are currently losing consumer interest because of a poor Based on the key findings from this study, we have identified three strategies that are critical to building better customer engagement and experiences. Be everywhere your customers are Interact in real time Influence the experience while it is happening Three strategies to engage consumers in the moment and improve experiences to give real-time feedback and the company took immediate action. Consumers also seek a proactive and contextual engagement from brands. Half of respondents would like companies they interact with to offer to help (via chat, connected devices, messaging) before they have asked for it themselves. 3. ON-DEMAND CONVENIENCE IN AN OMNICHANNEL ENVIRONMENT With the emergence of new communication channels, the need for companies to quickly master omnichannel interactions and reduce the gaps of communication becomes even more critical. Sixty-six percent of consumers expect the ability to provide feedback about products and services on the channel they are currently using. Companies need to also allow consumers to switch back and forth between touchpoints seamlessly without the loss of valuable information. Sixty-three percent of consumers expect easy transitions between channels when they engage with a business. Brands have room to improve digital experiences and their bottom line digital experiences, with 82 percent of consumers reporting that they have abandoned a digital task without completing it. Why? Apart from finding unexpected costs, the most common reasons relate to technical issues, a complex user process, and security concerns. Companies that design first-class digital experiences are able to drive better business results by cutting operational and acquisition costs, and increasing revenue. 05 Customer Engagement Now New Era of Engagement with Consumers The Connected Consumer Customer Feedback Goes Multi-Channel Traditional Forms of Collecting Feedback Are No Longer Effective Connect in The Moment: From Post-Experience Communication to Real-Time Conversation and Action Brands Have Room to Improve Digital Experiences and Their Bottom Line Three Strategies to Engage Consumers in the Moment and Improve Experiences 06 08 14 18 20 27 29 Table of Contents06 Customer Engagement Now New Era of Engagement with Consumers Digital technology has fundamentally changed the way consumers interact with brands. The adoption of rapidly multiplying digital channels m o b ile devices, apps, smart tech, automation, and much more allows customers to get what they want in the moment they need it. Whats more, these new technologies have caused a shift in customer experience expectations, resulting in a new kind of modern consumer a digital native who is constantly online and demands real-time communication and assistance from brands across channels. This poses a new directive for businesses to redefine customer experience engagement. It is no longer enough to communicate with customers on a couple of channels and apologize when things go wrong. Brands need to be able to engage every customer at the right time, in the right channel, with the right message in order to influence live experiences for the better and create opportunities to proactively solve customer problems. To help companies better understand the new rules of engagement, Medallia conducted a survey of 3,000 consumers from the U.S., the U.K., and Australia. Our findings highlight current trends in consumer engagement and provide strategies for how to connect with and influence consumers in the moment. Today, experiences are won or lost in the moment they occur.“Today, experiences are won or lost in the moment they occur.”08 Customer Engagement Now Eighty-two percent of consumers currently have or use connected devices to the internet younger generations more so, with 92 percent of Gen Z and Millennials reporting to rely on these technologies with an expected increase in usage for all devices in five years, except for smartphones. American and British consumers have adopted digital technologies at a higher rate than their Australian counterparts, and so have younger consumers. Connected devices The Connected Consumer The digital transformation has revolutionized the lives of consumers, who can now communicate with their preferred brands via multiple channels and devices. Todays consumers use an array of digital devices and technologies in their daily lives, from smartphones and virtual assistants, to messaging apps, connected TVs, and chat bots. The types of devices used often vary by geography, demographic, and customer segment, making it difficult to keep up with consumer preferences and changing expectations. 40% 18% 12% of both Gen Z and Millennial consumers, and 43% of Gen X, have a connected TV compared to 34% of Baby Boomers. of both Gen Z and Gen X, and 21% of Millennials, use wearables (e.g., Fitbit, Apple Watch) compared to only 12% of Baby Boomers. of Gen Z and 11% of Millennial consumers have connected home appliances (e.g., fridge, thermostat, washing machine) compared to 7% of Gen X and 5% of Baby Boomers. Younger consumers are more connected09 Customer Engagement Now Expected increase in usage for all connected devices in 5 years, except for smartphones Do you have or use any of following connected devices to the internet? In 5 years, do you think you will have or use any of the following connected devices to the internet? SMARTPHONE CONNECTED TV (29% INCREASE) WEARABLES (69% INCREASE) SMART SPEAKER (88% INCREASE) 68% 61% 38% 16% 16% 49% 27% 30% CONNECTED CAR (130% INCREASE) 10% 23% CONNECTED HOME SECURITY (225% INCREASE) CONNECTED HOME APPLIANCES (229% INCREASE) CONNECTED LIGHTING (233% INCREASE) 8% 26% 20% 7% 6% 23% OTHER NONE OF THE ABOVE 2% 2% 18% 17%10 Customer Engagement Now Half (49%) of consumers use virtual assistants (e.g., Apples Siri, Amazons Alexa). The proportion of younger generations who have a virtual assistant is two times higher than that of older respondents. A third (32%) of consumers use a virtual assistant at least once a month or more frequently. Again, younger generations are associated with more frequent usage. Forty-three percent of Gen Z consumers and 48 percent of Millennials use a virtual assistant at least once a month or more vs. 32 percent of Gen X and 21 percent of Baby Boomers. About a fifth (18%) of Millennials use a digital assistant at least once a day. Americans (18%) are 2.6 times more likely to use a virtual assistant at least once a day compared to Australians (7%), and 1.5 times more likely than UK consumers (12%). Virtual assistants Percent of consumers who have or use virtual assistants Gen X (3853 YRS) Baby Boomers (5472 YRS) Silents (7390 YRS) Gen Z (1822 YRS) Millennals (2337 YRS) 69% 66% 50% 33% 21%11 Customer Engagement Now Which virtual assistants do you use? Percent of consumers who use virtual assistants APPLES SIRI AMAZONS ALEXA MICROSOFTS CORTANA SAMSUNGS BIXBY OTHER GOOGLE ASSISTANT12 Customer Engagement Now In addition to digital devices, consumers gravitate towards advanced technologies and say they would rely on them more in the future. There is an expected increase in usage for most of the new technologies we asked about. The highest increase in adoption is for driverless cars and robotics technology, although both are used by a very small portion of the population. The most commonly used advanced technologies are cloud-based services and Internet of Things. Our study revealed that: The top five preferred messaging methods are: Text/SMS (68%), Facebook Messenger (58%), Whatsapp (34%), Instagram (27%), and Snapchat (19%). More women (74%) message than men (62%). The British (59%) are heavier users of Whatsapp compared to the Australians (27%) and Americans (16%). Younger generations rely on Instagram and Snapchat a lot more than their older counterparts. For example, 60% of Gen Z consumers use Instagram compared to Millennials (42%), Gen X (24%), Baby Boomers (10%), and Silents (6%). Advanced technologies Messaging apps 93% of consumers use messaging apps or text to communicate with their personal or professional network.13 Customer Engagement Now Consumers will rely more on advanced technologies in the future Which of the following technologies have you used in the past month? Which of these technologies do you see yourself relying more on in the future? 68% CLOUD-BASED SERVICES (11% INCREASE) 27% 30% INTERNET OF THINGS / CONNECTED DEVICES (74% INCREASE) 19% 33% CHATBOTS 14% 14% VIRTUAL & AUGMENTED REALITY (100% INCREASE) 7% 14% DRIVERLESS CARS (367% INCREASE) 14% 3% BLOCKCHAIN (50% INCREASE) 4% 6% DRONES (100% INCREASE) 5% 10% 3D PRINTING (125% INCREASE) 4% 9% ROBOTICS TECHNOLOGY (300% INCREASE) 2% 8%14 Customer Engagement Now Customer Feedback Goes Multi-Channel While some consumers still communicate with brands in person or by mail, most use a combination of digital channels such as email, social media, online chat, messaging, and apps. In fact, a quarter of consumers use messaging apps or text/SMS to communicate with businesses. When providing product or service feedback to businesses, consumers rely on email the most (50%), followed by phone (32%), face-to-face (28%), and social media and online reviews (25%). They also utilize a variety of digital devices to engage with businesses. The two most common devices for feedback are mobile phones (65%) and desktop/ laptop devices (59%). The same share of consumers use tablets and a landline (26%) to provide input to companies. A larger proportion of Millennials have adopted new platforms to provide feedback, compared to older consumers: mobile phones (76% Millennials vs. 56% older), tablets (30% Millennials vs. 23% older), virtual assistants (6% Millennials vs. 1% older), wearables (5% Millennials vs. 1% older), and other connected devices (5% Millennials vs. 1% older).15 Customer Engagement Now How do you currently provide feedback to the businesses you interact with? MESSAGING APP MAIL VIDEO / VOICE CHAT ONLINE CHAT WITH A HUMAN BRANDS MOBILE APP TEXT MESSAGE / SMS ONLINE CHAT WITH A BOT POST ON SOCIAL MEDIA / ONLINE REVIEW SITE EMAIL PHONE IN PERSON AT A PHYSICAL LOCATION16 Customer Engagement Now What devices do you use to provide feedback to businesses? MOBILE PHONE OTHER WEARABLES (E.G., APPLE WATCH) VIRTUAL ASSISTANT (E.G., AMAZONS ALEXA, APPLES SIRI) OTHER CONNECTED DEVICES (E.G., CONNECTED CAR, SMART HOME APPLIANCES) TABLET DESKTOP / LAPTOP LANDLINE17 Customer Engagement Now What would you like to be able to do through the following channels when interacting with businesses? Messaging Brands mobile app Connected device ASK QUESTIONS ABOUT A SERVICE OR PRODUCT 35% 38% 21% RECEIVE PROMOTIONS, DISCOUNTS, ETC. 33% 40% 15% LIVE CHAT WITH A REPRESENTATIVE 30% 35% 19% GIVE PRODUCT OR SERVICE FEEDBA