5 customer service trends to watch in 2023

The past couple years have been challenging for many customer service organizations. Meeting customers’ rising expectations and adapting to their evolving needs within a volatile economic landscape has been a herculean effort. Businesses are investing more in measuring the impact of their customer service, and the investment is paying dividends. In fact, it’s becoming more about the total customer experience and transforming the business models to create effortless experiences for both customers as well as employees. By 2026, Gartner predicts that 60 percent of large enterprises will use total experience to transform their business models to achieve world-class customer and employee advocacy levels.¹ This growing acknowledgment is a positive indicator that service is finally recognized as a core business value driver as support teams became pivotal in retaining customer loyalty and winning new customers throughout the COVID-19 pandemic.

But are service organizations ready to face challenges and equipped to provide this level of service at scale? Customer service leaders are turning to modernizing technology and digitization, such as Microsoft Dynamics 365 Customer Service, to provide high-quality customer service experiences.  

Five trends to modernize customer service

1. Recognize and quickly connect with customers

Modern customer service means showing up for your customers on the channel of their choice. Customers increasingly expect companies to offer a robust service experience right in their favorite channel. With each social channel representing diverse customer segments, engaging across these channels offers countless opportunities to deliver excellent service.

• 63 percent of customers expect companies to offer customer service via their social media channels, and 90 percent of social media users have already used social media as a way to communicate with a brand or business.²

The Omnichannel for Customer Service add-in for Microsoft Dynamics 365 Customer Service offers a wide variety of social engagement options for customers to engage on their preferred channel. Now with 2022 release wave 2, we’ve added Apple Messages for Business to our list of social messaging apps. This rich messaging can be used to generate interactive content and experiences that all take place within the messages application. And remember, when you enable agents to respond using the customer’s channel of choice, it drives brand engagement, creates a positive experience, and builds customer loyalty.

When engaging on social, always remember that you are not interacting with just one customer issue, but a wider audience that may not have context around a customer’s challenge. With an increasing number of eyes on you, it’s crucial to respond with precision, empathy, and quality.

2. Help customers help themselves with self-service

Intelligent self-service empowers customers to conveniently secure answers when and how they want, and this online, anytime support option is growing in popularity with customers. Business-to-business (B2B) and business-to-consumer (B2C) customers are likely to search for an answer to an issue within a knowledge base, online community, or portal before reaching out to a customer support agent. These critical self-service capabilities free up your agents to focus on high-priority, complex issues, and drive customer satisfaction.

• In a McKinsey survey of customer care leaders, nearly two-thirds of respondents who successfully decreased their call volumes identified improved self-service as a key driver.³

AI-powered chatbots are leading the charge in intelligent self service. Bots serve as the first point of contact for customers, alleviate customer frustrations from long wait times, and provide around-the-clock, immediate online support.

With the right service solution, bots can be deployed as conversational interactive voice responses (IVRs) equipped with natural language processing. A direct benefit of this intelligent, human-like conversation experience, paired with around-the-clock availability, is increased resolution speed. A quick response to a problem can be the difference in keeping a customer or having them pivot to a competitor.

• By 2027, chatbots will become the primary customer service channel for roughly a quarter of organizations, according to Gartner®.⁴

AI and machine learning advancements continue to make bots even more powerful and more efficient in understanding and conversing with customers. The use of bots in customer service is likely to expand as the technology becomes more and more democratized.

3. Personalize and drive brand loyalty

Customers want businesses to quickly recognize them as individuals and tailor their customer support experiences. Personalization isn’t only about knowing your customers and their histories, it means being able to understand and accordingly respond to their sentiment in real time. The ideal solution creates interactions based on each customer’s profile, which uses their current and past interactions and user data to customize the experience. It can be as simple as greeting a customer by their name and pulling up their order automatically by an email address or phone number, or it can mean taking the first step and implementing proactive customer care.

This trend in personalizing customer service demonstrates the value of the relationship to the customer, enhancing CSAT and strengthening loyalty, while significantly impacting the company’s bottom line.

• 63 percent of consumers expect personalization as a standard of service and believe they are recognized as an individual when sent special offers.⁵

• 80 percent of customers are more likely to make a purchase when businesses provide a customized experience.⁶

4. Improve agent productivity

• In the past two years, customer service leaders have seen a dramatic shift in the number of employees working from home—up to 85% of their workforces in some cases.⁷

With agents working from more places than ever, they need new ways to find experts who can help them solve customer challenges. The right data at the right time is key to empowering agents to meet customers’ needs quickly and accurately. However, as omnichannel customer profiles grow, agents need tools that proactively surface insights that matter in the moment.

Advancements in AI technology, especially natural language understanding, enable real-time analysis of conversations and the ability to surface real-time insights and knowledge. Agents can be alerted to similar cases and successful resolution steps, along with knowledge suggestions customized for the current context. All of these capabilities help agents solve customer issues more quickly, improving resolution rates and customer satisfaction.

5. Optimize with automation and run your business lean

Many customer service leaders are making it a priority to transform their departments from cost centers to growth centers. At the same time, they face continuous pressure to keep costs down.

Unifying tools onto a single, cloud-based platform reduces redundancy and enables cost flexibility to meet changing business conditions. If that platform has an open architecture and no-code/low-code development capabilities, the time and cost of development can be dramatically reduced—putting innovation within reach across the organization.

Building tomorrow

These are just a few of the trends in customer service, but one thing is for sure: customer service is evolving rapidly. The real challenge is being able to serve customers wherever they are and making sure every customer interaction is captured and available in a single profile for the support agent to use in resolving customer issues.

Microsoft is listening. We’re continually adapting and innovating to provide service leaders with the tools you need to consistently deliver exceptional customer service. We continue to invest in features like self-service, bots, social engagement, and agent productivity tools that bring value to you, your customer service organization, and most of all, to your customers. Our goal is to build intuitive, sophisticated, easy-to-use tools that enhance your service delivery and empower your service representatives to exceed customer and organizational expectations.

Our service product roadmap is filled with new features and innovations that will take your service experience to the next level, differentiate your brand, and ultimately help you rise as a leader in your industry.

Learn more

Learn more about Dynamics 365 Customer Service, watch our Modernize the Service Experience guided tour, and check out Apple Messages for Business.

---

End notes

¹Gartner webinar, The Total Experience Strategy for Better Retail Digital Interactions. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

² 180+ Social Media Marketing Stats You Can’t Ignore (2023), Dreamgrow.com.

³ The state of customer care in 2022 and beyond, McKinsey, 2022.

⁴ Gartner Press Release, Gartner Predicts Chatbots Will Become a Primary Customer Service Channel Within Five Years, July 27, 2022. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

⁵ Consumers expect personalization, reveals report, Retail Customer Experience.

⁶ New Epsilon research indicates 80% of consumers are more likely to make a purchase when brands offer personalized experiences, Epsilon Research.

⁷The state of customer care in 2022 and beyond, McKinsey, 2022.