The Customer Experience Foresight You Need to Stay Ahead
While 2023 didn’t deliver the levels of volatility we’ve grown used to since the start of our young decade, it was still a year defined by major change—most notably the proliferation of generative AI.
What will define 2024? Read on for our bold predictions.
Marketers will finally be able to leverage the true power of generative AI thanks to enterprise platforms fueled by large language models.
Beginning with the launch of ChatGPT in late 2022, generative AI became the subject of nearly every question about the future of marketing. In what ways would this new technology disrupt the status quo? Who would benefit the most from it? How should it really be used? Hungry for answers, many of us spent 2023 testing different tools and training ourselves to write prompts that might yield usable outputs. It was a year defined by curiosity and experimentation as much as it was by hype.
In 2024, marketers will finally be able to make the most of generative AI—but not by mastering the use of chatbots and text-to-image models. No, the true potential of the technology will be realized via the integration of large language models (LLMs) into already powerful enterprise platforms. Martech leaders such as Salesforce and Adobe spent the past year building and acquiring AI startups to fast-track innovation and bolster their existing offerings—and that means marketers will now be able to access powerful new integrated capabilities. Forget using AI to write a blog post. We’re talking about being able to generate complex customer segments, journeys, campaigns and more.
These developments will present extraordinary growth opportunities for brands. But to take full advantage of these next-generation, AI-fueled marketing automation platforms, you must have consolidated data, expert-level knowledge of your full tech stack, and a willingness to train teams in prompt engineering. If you’re not there yet, don’t worry—you’ve still got time to get your ducks in a row. Whether your goal is to leverage new features in an already-implemented technology or invest in a platform that’s new to your business, we recommend beginning the year with an audit of your existing ecosystem to develop a current-state snapshot of your accessible customer data. This will provide the essential foundation for an evolved technology strategy that makes use of generative AI at scale.
2024 will present a golden opportunity for marketers to take the leap from outdated, volume-driven email strategies to experience-driven strategies that provide real value and customer retention.
At this point, we’re used to it: digital noise bombarding our senses through every available channel—especially email. Endlessly irrelevant offers and announcements are clogging our inboxes more and more each day. It’s too much to process— and it’s not worth the time to process—so we tune it all out. We ignore what brands are trying to tell us, even the ones we’ve signed up to hear from.
For marketers, this should be a red flag. And yet, again and again, so many stick to their guns: “Historical data shows I need to send X number of emails per week to meet my goals,” they say, “so I’m going to keep doing it.” If this approach has worked until now, it won’t for much longer. In 2024, consumer frustration will come to a head, and brands will see diminishing returns on volume-driven email programs.
What does this mean? That there’s never been a better time to evolve your channel strategy. Begin with a touchpoint audit to piece together an up-to-date picture of when and why customers are receiving your emails (including triggered ones!). Where might you be overdoing it? Where might there be gaps? How can you better personalize your communications to improve relevancy? Test your hypotheses and assumptions through experimentation, implement your learning, and watch your revenue increase.
Manufacturing and industrial businesses that don’t invest in mastering the full B2B2C journey will set themselves up for obsolescence.
It’s always been easy to look at B2B2C sales as a game of two halves: manufacturers aim to create a great product, while the distributors’ goal is to sell to end users. But we now live in a world where over 50% of customers will switch to a competitor after a single unsatisfactory experience. What does that mean for manufacturers that rely almost entirely on independent dealers or affiliates to manage customer relationships? It means that they’re taking an enormous risk.
While the full consequences may not be seen for a couple more years, we believe 2024 will be a make-or-break year for manufacturers. Those that begin the work of architecting more holistic journeys—designed with the end customer in mind, spanning awareness to post-purchase—will create a competitive advantage. Those that continue to take a business-as-usual approach will start to lose market share as buyers shop around for a better experience.
In short, it’s imperative to provide a seamless customer experience, no matter what you sell or how you sell it. Manufacturers that depend on dealer networks face unique, and sometimes nuanced, challenges in their pursuit of better CX—but that’s no excuse not to work more closely with distributors to drive progress. Evolving customer expectations have made it necessary to take ownership of the full customer lifecycle.
Consumers will accept nothing less than hyper-responsiveness across the shopping journey—and brands that can’t deliver will be left in the rearview mirror.
It’s nothing new for customers to expect the brands they buy from to be responsive; in fact, almost two-thirds of shoppers expect a response within ten minutes to any marketing, sales or customer service inquiry. What is new is the widespread assumption that brands today will deliver hyper-responsiveness across the full buying journey, from incorporating trending topics into campaigns to activating the latest social commerce capabilities. Immediacy is a key component of relevancy, and if your customers aren’t already demanding that you operate in the perpetual now, they will soon.
Some organizations are swift by nature, while others struggle to react quickly. For those in the latter category, it will be essential to put structures in place that empower teams to function more nimbly. Is your product team ready to launch a new feature based on requests coming in through social media? Is your marketing team equipped to promote this new feature via quick-turn campaigns? If not, another company will be happy to deliver what people are looking for.
Experience-focused loyalty and membership programs will play a key role in helping companies maintain growth in the face of uncertain consumer spending.
Despite the general volatility of the last few years, consumer spending has mostly remained robust. However, many are expecting that to change in 2024. Climbing interest rates, mounting credit card debt and depleted savings could all play a role in a possible spending slowdown.
As a result, brands across industries will feel the pressure to manage costs while simultaneously retaining their current customers. To achieve the former, many marketers will de-value the currency and rewards customers can earn via points-based loyalty programs. Unsurprisingly (and somewhat ironically) this will jeopardize their pursuit of the latter.
Others, however—those motivated to maintain a healthy balance sheet without sacrificing long-term gains—will find success in the deployment of loyalty/membership programs that promise utility and convenience. These kinds of exclusive experiential benefits—which don’t carry the same liabilities and deliver higher perceived value—will be far more effective than ever-diminishing discount offers. Great experiences, after all, are what keep people coming back for more, especially when money is tight.
Smaller brands that deliver on a growing demand for XR-enabled shopping experiences will see uncommon growth.
Extended reality (or XR) is an umbrella term that covers virtual reality (VR), augmented reality (AR) and mixed reality (MR)— technologies that major brands have been using lately to create novel shopping experiences. Nike, for instance, has made it possible to “try on” pairs of shoes virtually. Meanwhile, IKEA has empowered customers to digitally place and remove pieces of furniture in their homes. Consumer response to these kinds of offerings has been extremely positive, with 61% preferring retailers that offer AR experiences.
Until recently, XR-enabled shopping experiences have been the exclusive domain of global companies—ones with the necessary resources to develop custom apps leveraging sophisticated technologies. New tools from vendors like ThreeKit and Zakeke, however, are making it possible for smaller brands to get in the game.
This is great news for organizations looking for ways to punch above their weight, because demand for XR is only going to grow. In fact, we predict that it will increase dramatically in 2024. Accordingly, those that take advantage of available tools to deliver next-gen shopping experiences will be rewarded with a greater share of wallet.
ESG will die as a marketing tactic—but having a genuine purpose will remain an existential necessity.
ESG—an acronym for environmental, social and corporate governance—has become something of a catchall term that refers to an organization’s responsibility to do right by the planet and its people. As Deloitte puts it, “Investors, regulators, as well as consumers and employees [are demanding] that companies should not only be good stewards of capital but also of natural and social capital and have the necessary governance framework in place to support this.”
Over the past decade or so, many brands have leveraged ESG-related commitments in their marketing, touting “greater good” principles as a reason to believe. Unfortunately, amid pervasive greenwashing and waning corporate support for DEI programs, many consumers have come to distrust such campaigns, viewing their promises as hollow. As a result, we predict that 2024 is the year ESG will cease to be an effective marketing tactic.
Of course, that doesn’t mean that consumers will suddenly stop expecting the brands they buy from to do good in the world—far from it. Instead, they’ll want to see a “show, don’t tell” approach. In other words, shouting from the rooftops about your company’s responsible practices is more and more likely to earn you skepticism, while simply demonstrating such practices will help build trust and loyalty. Consider a brand like Trader Joe’s, which enjoys tremendous brand love. The grocery store chain avoids Styrofoam in product packaging, composts or donates unsold food, and partners with relevant nonprofits to help those in need—all without making much of a fuss about it.
Social platforms will continue to become more specialized, and channel success will depend on knowing when, how and why audiences are using each one.
It’s a common misconception that the age demographics of users are the biggest differentiator among popular social media platforms. Facebook is for Boomers now, many claim, while TikTok is for Gen Z. In reality, more than a quarter of Facebook users are under the age of 25, and nearly 64% of TikTok users are over the age of 25.
What’s true is that people of all kinds use many different social platforms for varied reasons. Some rely on Instagram to stay in touch with friends, others to discover new products. Many turn to TikTok for entertainment, but others have made it a shopping destination. What’s important for brands is to understand how their customers use each one, and then leverage this knowledge to develop a channel strategy that improves the overall customer experience.
If you know that most of your customer base chooses Facebook to connect with family, for instance, you can avoid running ads there. And if you discover that large portions of your target audience take advantage of social commerce, you can save yourself the mistake of not showing up there at all. Remember, the goal is to deliver relevancy at each touchpoint. We recommend investing in research that empowers you to act on audience-specific insights. In 2024, your brand’s social success will depend on it.
Streaming platforms will reinvent themselves as “digital amusement parks,” creating new opportunities for advertising.
In the last year or so, we’ve seen a tremendous amount of consolidation in the streaming industry. Facing dwindling subscriber numbers—and, consequently, reduced production budgets—the major players have been relying on acquisitions to create the right mix of content to sustain the interest of paying customers. In such a top-heavy industry, however, there are only so many mergers that can take place …
That’s why we predict that streaming is going to burst from its traditional confines in 2024. What other kinds of entertainment can be built into existing brands and platforms? Hulu already offers live sports—why not include an in-app sports betting feature? What about video games? Or shopping? Buy your favorite character’s latest look before the episode is over. There’s clear potential for growth beyond the limits of linear video content.
Why does this matter? Because the reinvention of such a culturally dominant industry will almost certainly open new and innovative approaches to marketing. Relevant in-program sale notifications? New flavors of sponsorship opportunities? We don’t know exactly what the new streaming landscape will look like, but brands prepared to respond swiftly and strategically will reap the biggest rewards early.
M&A activity will pick up again, and a focus on CX integration will be the biggest determinant in which acquisitions are successful.
As BCG reports, concerns about high interest rates, geopolitical instability and economic recessions have all contributed to a recent downturn in M&A deal activity—which hit its lowest point in a decade during 2023. However, overall volume is projected to pick back up in 2024.
What are the implications for businesses striving to grow in the short term via acquisitions? Well, the process of successfully bringing a new entity into the fold will be as tricky as ever—trickier, actually. As we noted earlier, recent research shows that more than half of consumers will switch allegiance to a competitor after a single poor experience. Given such heightened expectations, the pressure’s on for post-merger organizations to ensure new and existing aspects of the customer experience—from communication channels to payment processes—are integrated well.
The solution? A rigorous focus on journey mapping and experience strategy. Today, successful mergers begin with a deep understanding of all significant customer touchpoints. Without detailed blueprints, you won’t be able to see how the pieces can come together in a way that delivers on the wants and needs of your customers.
Whatever comes to pass in 2024, one thing is for certain: brands dedicated to delivering relevant, seamless and customer-centric experiences will be the best equipped to weather storms and seize opportunities. Follow us for more insights to help your brand drive CX success.
Here’s to going bold in the year ahead.