Dynamic Customer Engagement Is a Business Imperative

Dynamic customer engagement (DCE) is critical for success for customer service leaders going forward, according to Gartner, but it’s a strategy few in the industry follow today.

Gartner defines DCE as a strategy that enables companies to deliver differentiated customer experiences by transforming data into next-best-action recommendations. This allows companies to be more proactive in their customer service efforts, but today, most companies are still reactive.

“Reactive service experiences place the burden on customers to find the best channel for resolution, whether it’s to check the status of a request, conduct a transaction, or troubleshoot a repair issue. Customers often switch channels or use multiple channels concurrently, further increasing both effort and service costs,” says Philip Jenkins, a senior director analyst in the customer service and support practice at Gartner. “But these negative effects extend well beyond cost and the service experience to the organization’s revenue and its inability to mitigate disloyalty, maximize wallet share, and gauge overall profitability.”

Gartner’s research showed that proactive customer service increases Net Promoter Scores, customer satisfaction scores, customer effort scores, and value enhancement scores. But the same survey found that only 13 percent of consumers said they received any type of proactive customer service.

“We have consistently found that a one-point increase in metrics has major implications on customer loyalty, boosting retention, wallet share, and positive word of mouth,” Jenkins says. “While these impacts on improved reactive experiences are significant, shifting from reactive to proactive conversations is a game-changer, delivering nearly effortless experiences, reducing cost, and increasing customer lifetime value.”

Companies haven’t more fully embraced the concept of dynamic customer engagement because many of them still tend to focus on a single event—the current customer interaction—rather than on the full customer life cycle, Jenkins says. “They’re not understanding the full customer relationship. You need to look at how you treat that customer over the entire life cycle.”

Jenkins adds that some customer life cycles will be relatively short, maybe for just a single purchase, while others, as with customers who have subscriptions, can last several years.

Companies can be more proactive by offering customers alerts (i.e., when a credit card balance reaches a certain level or when a searched item that had been out of stock becomes available) and using customer purchase history and other data to recommend other appropriate products and services, Jenkins says.

“Contact centers need to use the data they have to produce outcomes,” he adds. “If they’ve already made the investment in the data, they need to make the data meaningful and put it into action.”

However, to do so, companies need data from all customer interactions, Jenkins adds. Too often, customer data is contained in different siloed systems, so customer support personnel don’t have a full customer view.

To be more proactive, Jenkins recommends that customer service and support leaders take the following steps:

• Evaluate with peers and experts how a DCE strategy could impact customer experience and returns to the organization.
• Partner with the IT department to identify DCE gaps and design a road map for technology implementation.
• Work with human resources to identify talent and skills gaps and then develop a plan to attract and hire additional people to fill those gaps while retaining critical talent.
• Develop and champion the DCE business case to top executives to gain approval and secure necessary funding.

Jenkins says it could take three years or more to have all of the resources necessary to pursue a full DCE strategy, adding that most of the benefits will come in the first couple of years, with the return on investment flattening in subsequent years.

Companies need to pursue a holistic DCE effort, not play whack-a-mole with piecemeal adoption, he states.