As more omnichannel retailers look to adopt CX automation to better serve customers through the full order lifecycle, and more vendors promising turnkey solutions enter the market, it pays to remember that not all automation is created equal. Leveraging CX automation for greater profitability and customer loyalty requires what I call automation “done right.”
CX automation has been around for years, with the earliest example being basic chatbots. These first chatbots weren’t particularly intuitive; they were programmed to provide informational answers based on keywords detected in the customer’s text, but with no personalization. You could get a link to a retailer’s return policy, for example, but you couldn’t get assistance in starting your return, preparing a shipping label or understanding which items in your recent order were eligible for return. In general, these legacy automation solutions, or what I’d call first-gen CX automation, are only able to successfully resolve 15% of customer inquiries.
When solutions got more sophisticated, we saw the advent of second-generation CX automation. While still chatbots, they’re now able to handle workflow-oriented use cases. Based on the information they collect from the customer, they can provide more customized answers than their first-gen predecessors, but without much nuance.
For example, if you purchased a sweater and wanted to exchange it for a smaller size, the second-generation chatbot wouldn’t be able to organically extract your intent from your query. Instead, it would require you to provide information like the item name, product ID and order number in order to look up your purchase — all pieces of data that the average shopper might not have at their fingertips. The customer gets a limited sort of assistance, but the experience is far from frictionless or convenient.
While this sort of automation might represent short-term savings when it comes to workforce investment, the suboptimal UX can cost you in CSAT scores and CLTV down the line.
Today, leading-edge CX automation, or what I call automation “done right,” obviates the issues of previous generations, and it’s where the true value lies for retailers who implement it. We’ve moved beyond mere chatbots to the idea of AI-powered “digital workers” — smart, contextually aware tools that can parse customer intent and provide a seamless self-service support experience at every point along the customer journey.
You can tell a digital worker, “I’m looking for a pair of Crocs for my sister” and it will parse that you’re interested in a particular brand of footwear and that because of the word “sister,” it should show you women’s styles of the shoe. Best-in-class CX automation also covers the full order lifecycle, allowing the customer to do things like modify their shipping address or change their payment method before the order ships, and providing a customized make-good experience at the other end of the lifecycle if a customer receives a damaged or incorrect item.
Done right, on a per-session basis, this third-gen CX automation can save an average of $3 by cutting down on human agent handoffs and can increase revenue by an average of almost $4 via contextual consultative selling and personalized product recommendations. At the brand level, for a retailer with $250M GMV, CX automation represents almost $3M in annual additional support capacity from deflected chats, and $3.5M in additional revenue generated via campaigns and consultative selling.
Gen 3 CX automation can also have a powerful impact beyond sales conversion lift and cost deflection. The most sophisticated solutions allow retailers to visualize and analyze the data that they’re collecting from customer interactions. This data can help to uncover significant operational issues or opportunities.
For example, if you see that the top inquiry for the last month was related to shipping issues and you just opened a new warehouse in Ohio, you might need to dig into what’s happening on the ground there. If you’re receiving a large volume of chats related to the color of your fall line of handbags not matching what is shown on the website, you might need to redo your catalog images or update your PDPs.
CX automation is a broad term that encompasses a range of solutions and presents myriad opportunities and potential pitfalls for retailers. Done wrong — legacy solutions with limited use cases, rigid workflows and a lack of contextual nuance — it’s more likely to undermine your customer relationships than strengthen them. Done right, today’s best CX automation is a powerful tool to connect with and empower customers, strengthen your profitability, and guide strategic and operational decision-making with unparalleled voice-of-the-customer insight.
Fang Cheng is the Founder and CEO of Linc, the conversational CX automation platform that works with brands like Levi’s, PacSun, Vineyard Vines, and Carter’s/Oshkosh to resolve more than 85% of customer inquiries without a handoff to a human agent. Linc helps customer-centric retail brands create a competitive advantage through CX automation, reducing customer service costs and turning service interactions into opportunities for engagement and revenue growth. With a PhD in bioinformatics from NYU, Fang previously co-founded a business acquired by Amazon, and prior to that she worked as a hedge fund manager.