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D/2017/45/352 – ISBN 978 94 014 4521 4 – NUR 802 Design: Karl Demoen Translation: Ian Connerty © Steven Van Belleghem & Lannoo Publishers nv, Tielt, 2017. LannooCampus Publishers is a subsidiary of Lannoo Publishers, the book and multimedia division of Lannoo Publishers nv. All rights reserved. No part of this publication may be reproduced and/or made public, by means of printing, photocopying, microfilm or any other means, without the prior written permission of the publisher. LannooCampus Publishers Erasme Ruelensvest 179 box 101 3001 Leuven Belgium www.lannoocampus.com
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TABLE OF CONTENTS INTRODUCTION The third phase in digital evolution 13 Customers The Day After Tomorrow 14 The structure of Customers The Day After Tomorrow 17 Feedback 17 Bringing the book to life via Augmented Reality 19
CHAPTER 1. CUSTOMER EXPERIENCE IN THE THIRD PHASE OF DIGITALIZATION Success today? Process – Measuring – Culture 22
The talking Kone lifts 39
Social media pushes customer experience
ISS uses algorithms for better and more efficient service 39
into the boardroom 24
Algorithms direct decisions 40
The customer relationship is the TOP priority
A new customer journey 42
for companies 25
Process – Measuring – Culture is no longer enough 45
The third digital wave: Connectivity, Artificial Intelligence and Automation 27 The opening shot? DeepMind beats the Go world champion 30 From Go to poker to dogfights to business impact 32 From stupid to smart in five years time 33 We are reaching the point of convergence 35
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THE DAY AFTER TOMORROW MINDSET CHAPTER 2. FROM MOBILE FIRST TO AI FIRST
An expert speaks: Joeri Van den Bergh 88
Faster adoption and higher impact
50
Invisible technology leads to magical experiences
51
The best service level ever
91
The AI-first mindset
55
1. Faster than real time: from reactive to proactive service
92
AI is necessary for governments to meet their
2. Hyper-personalization:
financial targets
57
How a single self-driving car can reduce traffic jams
59
3. Unparalleled ease of use (‘convenience’):
Trust in machines > trust in people
60
from average to individual customer a world without a manual
95 99
The six fields where AI will offer added value in customer relations
62
AI = Data
67
From supervised learning to non-supervised learning
69
CHAPTER 4. THE DAY AFTER TOMORROW MODEL
Weapons of mass influence
70
The Azure Window
112
From perception to real value
71
The Day After Tomorrow
113
Too enthusiastic or too scared
73
Towards the new customer relationship in The Day After Tomorrow
Jeremiah Owyang about the evolution
Customer 2020 at the KBC
117
towards automation 75
The next phase for Booking.com
118
Lemonade, a very tasty insurer
119
Knab moves into the insurance world
121
Three starting points, one philosophy
121
CHAPTER 3. IT’S NOT THE TECHNOLOGY, IT’S THE CUSTOMER
6
116
Solutions to get around The Day After Tomorrow stalemate 122
It’s not about the technology, it’s about the customer
82
The expectation of Today versus The Day After Tomorrow
123
Car central or citizen central?
83
Play offensively
124
The explosion of expectations
85
Customers The Day After Tomorrow in Efteling
124
A devilish dilemma
86
Four axes of investment on the road to The Day
The real Customer of The Day After Tomorrow
87
After Tomorrow
128
CUSTOMERS THE DAY AFTER TOMORROW
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THE DAY AFTER TOMORROW INVESTMENT AXES CHAPTER 5. THE DATA LEVER
CHAPTER 6. NEW USER INTERFACES
The limitations of segmentation
134
A virtual assistant for students
154
The power of context
135
Social media are too slow!
154
Who is reading who?
135
Real-time is the new minimum
155
From security to knowledge
136
Blue is my favourite colour as well!
156
Google retail lab
137
Solving the shortage of doctors
157
Ali-ID: the power of Youku Tudou and Alibaba
138
A world full of micro-bots
158
One Football: Youku Tudou on a smaller scale
139
The end of ‘search’?
159
‘Our gut feeling is worthless’: marketing has become
The evolution of interfaces
161
a science
141
From complex to simple
162
A fundamental shift in value creation
143
Customer-friendly mobile interfaces push satisfaction
Netflix as the king of consumer science
145
and conversion at Belfius
162
‘In God we trust; all others bring data’
147
From simple to automated
164
Planet Labs turns insurance into a science
147
Buy the best cakes in San Francisco - automatically
165
Ant Financial Services: the data lever in a classic industry
149
Smart contracts using Blockchain
166
Investing in the data lever
150
A robot as financial adviser
167
Vanguard grows thanks to robot advice
168
From automated to augmented
168
Google Lens!
170
A world without screens
171
Towards augmented customer experience
171
An automated world with perfect timing
173
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CHAPTER 7. FIGHTING THE COMMODITY MAGNET
CHAPTER 8. INTELLIGENCE AUGMENTED
The platform as a marker of trust
176
Artificial intelligence is more dangerous than
The commodity magnet
178
nuclear weapons
194
The strongest commodity magnet ever
179
Open AI
195
The super AI myth
195
Marketing: influencing the consumer and influencing the algorithm
181
Robots steal our jobs, but less quickly than we think
199
The marketing department for The Day After Tomorrow
183
Feeling threatened by automation? Learn new skills!
200
Four strategies to beat the commodity magnet
184
Bottleneck occupations? Send in the robots!
201
New and renewed expertise
191
Intelligence augmented
203
The scaling-up of human skills
203
The starting point: customer service
204
Intelligence augmented in all phases of the customer experience
206
Investing in intelligence augmented
207
Cyborgs! 208 How far along are you?
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THE DAY AFTER TOMORROW CONSEQUENCES CHAPTER 9. ORGANIZATIONAL MODELS FOR THE DAY AFTER TOMORROW
CHAPTER 10. ETHICS IN THE DAY AFTER TOMORROW Society in The Day After Tomorrow?
244
By Peter Hinssen, founder and partner at Nexxworks 213
A world of limitless ambition
244
The greatest comeback ever!
245
How successful companies are preparing
Not just ambitious billionaires
246
for The Day After Tomorrow’
214
Homo Deus
246
Patterns of The Day After Tomorrow
216
A world full of technological filters
248
PATTERN #1: The remote silo
216
Fake news? You ain’t seen nothing yet!
249
PATTERN #2: The separate entity
219
The current privacy discussion is the wrong discussion
250
PATTERN #3: The ‘catapult’
221
Brands with convictions
251
PATTERN #4: Customer co-creation
222
Explicit ethical choices
253
PATTERN #5: The portfolio organization
224
How far can technology go?
254
PATTERN #6: The accelerator
227
Towards a collaborative model?
255
PATTERN #7: The corporate garage
229
PATTERN #8: The network organization
231
FINALLY…
PATTERN #9: Integral disruption
234
Dream of the future, but use what is available today
256
THANK YOU!
257
PHOTO CREDITS
259
NOTES
261
PATTERN #10: The pollutants strategy The Day After Tomorrow canvas
237 239
Today 240 Tomorrow 240 Day After Tomorrow 240
TABLE OF CONTENTS
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INTRODUCTION
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An eight-year-old boy is sitting eating a cheeseburger with his
Google Translate is getting better every day. Artificial intelligence
sister in a McDonald’s in Ohio. Just as he pops the last bite into
is helping the translation tool to work faster and more efficiently.
his mouth, the police arrive to question the two children. “Have I
Google Translate can now translate from Japanese to English
done something wrong?” the boy asks the policemen politely. He
and vice versa; and also from Korean to English and vice versa. So
certainly doesn’t think so. As far as he can remember, he followed
the next logical question is this: can the computer teach itself to
all the rules of the road perfectly when he drove here in his dad’s
translate from Japanese to Korean and back again? The obvious
car. “So where did you learn to drive, kid?” asks one of the cops.
way to do this is to translate first from Japanese to English and
“Me? On YouTube, of course!”1
then from English to Korean. However, artificial intelligence software discovered that it was more effective to develop its own
A murder trial is going nowhere. The defendant protests
intermediary language for this intermediary step, a language
his innocence, but there are no witnesses to sup-
that gave much better results than English. But the
port his story. His only chance for acquittal is his
developer of this intermediary language was not a
Amazon Echo – the virtual assistant that more
human engineer. The computer, Google DeepMind,
and more consumers are using to make their
decided for itself that this was the best route to
lives easier. The device is effectively the world’s
follow.3
first computer with no keyboard, and people have quickly started to use it for everyday tasks
Children learning to drive with YouTube. A machine
like checking the news, buying products or listen-
testifying in court. Computers that can think and
ing to music. The interface is operated by the us-
learn for themselves. Ten years ago, it would have
er’s voice, but it is not just the owners’ words that
sounded like science fiction. Today, it is reality. In
are registered by Echo; the device also picks up
just ten years, YouTube has grown to become the
every other spoken word within its range. In this
second largest search engine in the world. Amazon
ground-breaking case, the police asked Amazon
Echo is the most popular gadget of the moment:
to release the data from the defendant’s Echo,
more than 10 million American families currently
in the hope that this might move the murder
have this virtual assistant in their living room.4
trial forward. Initially, Amazon refused, but later
Google DeepMind is widely regarded as the smart-
changed their mind, at the explicit request of the
est computer in the world. And this is just the tip of
defendant. So, the key witness in the trial became
the iceberg.
a machine. Not a person.2 12
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The third phase in digital evolution
companies to identify and solve their customers’ problems before they even know that it is a problem. Faster than real-time customer service is quickly becoming the new norm. The level of personalization of products and services is also increasing rapidly, based on a dramatic improvement in the quality of data
All signs are pointing in the same direction. We are at the start of
management. Last but not least, user interfaces are becoming
a new phase in digital evolution. The first stage was about mak-
more intuitive than ever before, with the way we operate devices
ing information available via the internet. The second phase was
and software changing beyond recognition in recent years.
about mobile technology and new forms of communication. The third phase will be about automation and artificial intelligence.
To make all these benefits available to their customers, companies are now making the strategic shift from ‘mobile first’ to ‘AI
In this book you will be offered far-reaching insights about the
first’. Initially, it will be unclear to some why certain brands are
influence of this third phase of digitalization on customer rela-
successfully improving their customer service, while others are
tions. What impact will artificial intelligence (AI) and rapidly-ad-
not. The reason being that, in most cases, artificial intelligence is
vancing levels of automation have on the relationships between
invisible technology. A website (phase 1 of digitalization) and an
businesses and customers? That is the core of this book.
app (phase 2 of digitalization) were investments that were highly
For customers, we are entering a period where we can expect
visible to everyone – customers and competitors. The unseen
an unrivalled quality of service. Smart technology now allows
nature of AI means that businesses that are quick to embrace it
INTRODUCTION
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can quickly gain a significant competitive advantage. Customers
When Digital Becomes Human (2014), my third management
won’t understand it. It will simply seem as though company A
book, focused on the initial shift from phase 2 to phase 3. It is the
has better staff than company B, but in reality, the staff in com-
period in which digital transformation became the buzzwords, as
pany A are being assisted by smarter software. In the first part of
companies asked themselves how the relationship between peo-
this book I will describe in detail this transition from ‘mobile first’
ple and machines could be enhanced. Three years later (2017), the
to ‘AI first’.
basic conclusion of When Digital Becomes Human is still relevant: computers should add value primarily through the automation
Customers The Day After Tomorrow
of operational processes while people should focus on the more emotional tasks. People and machines are highly complementary when it comes to offering added value to customers. This will not change in the years ahead. All that will happen is that the role of the machines will become more prominent and the role of the people will be given an even sharper focus. Customers The Day After Tomorrow, as the title implies, is all
My first two books, The Conversation Manager (2010) and The
about customer relationships in the medium-term future. In this
Conversation Company (2012), were both guides for marketing
book, I will make clear where companies need to invest if they
in the second phase of digitalization. The books described how
want to be successful in phase 3. The challenge is to combine
companies could adjust their culture and communication in a
this investment for The Day After Tomorrow with the further
new world of social media and smartphones.
development of evolutions from phase 2. In other words, working to improve customer relations The Day After Tomorrow runs
Today, the second phase of digitalization has reached maturity.
parallel with continued efforts to improve customer relations
That is not to say that it isn’t still vital to continue investing in
today and tomorrow.
mobile and social media communication. The third phase of digitalization has already started, but this does not mean that
This book is not an appeal to end investment in your current
consumers no longer have a need for good communication and
day-to-day relations. On the contrary, it is an appeal to continue
service provision based on technology from phase 2. In fact, it is
investing in today, but also to set aside resources for what your
more ingrained into consumer behaviour than ever before.
customers will expect in the future. A future that will arrive much faster than you think.
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CUSTOMERS THE DAY AFTER TOMORROW
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Today, there is so much hype around so many emerging technol-
To make this as concrete as possible, the second part of the book
ogies that it can be difficult for companies to know where their
describes four axes of investment for the customer relationship
focus should be. The answer is that the most important focus
of the future. Firstly, there is a need to increasingly see customer
should always be the customer, and as this book will explain, if
relations as a science. Data must be used as a lever for developing
you take the customer as your starting point, the specific tech-
new customer benefits, and consequently, the need for data in
nology becomes less crucial.
the third phase of digital development is greater than ever. Artificial intelligence can only work effectively if it has enough data.
INTRODUCTION
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Secondly, there is a need for new interfaces to automate com-
Thirdly, there is the battle against the commodity magnet. Be-
munication and interaction with customers more efficiently.
cause customers will be taking more and more decisions based
Customers are no longer willing to wait an hour for an answer.
on algorithms and the power of the major digital platforms
Real time is the new expected minimum for communication, and
continues to grow, there is a risk that every product will become
it must be via user-friendly interfaces. Reducing the amount of
a commodity where price is the most important factor. As a busi-
effort the customer must make is the priority. In The Day After
ness leader and a marketeer, it is vital to find ways to add value
Tomorrow people will not be looking for a flawless customer
and differentiate to counter this risk.
experience; they will be more interested in an automated or very simple customer relationship.
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Fourthly, The Day After Tomorrow requires investment to im-
Autodesk, etc.) and disruptive rising stars (Planet Labs, Fyusion,
prove the performance of people via technology. How can speed
etc.).
be increased and the number of errors reduced in the most personal manner possible? How can we help our team to meet
The story of this book is based on more than 300 company visits
the wishes and expectations of the customers of the future?
spread across New York, Los Angeles, San Francisco, Silicon Valley,
This fourth axis is focused on ‘augmented intelligence’: enhanced
Seattle, Barcelona, London, Berlin, Dublin, Belgium, the Nether-
human performance with the assistance of technology.
lands, Singapore, Shanghai, Shenzhen and Hangzhou.
In short, customer relations The Day After Tomorrow will use
I have also carefully selected and interviewed nine experts,
data as a lever for additional customer benefits (1), employ the
whose thoughts add further insights to the most important
most user-friendly interfaces (2), succeed in escaping from the
aspects of my story. All the interviews were filmed and can be
commodity magnet (3) and bring in new technology to optimize
viewed on www.youtube.com/stevenvanbelleghem. You will, of
human skills (4).
course, also read their comments and opinions throughout the book.
The structure of Customers The Day After Tomorrow
Feedback I would be delighted to receive your questions and comments. My email address is Steven@VanBelleghem.biz. It is always a pleasure to read your feedback. I hope you enjoy my book Customers The Day After Tomorrow.
Over the past five years, I have had the pleasure of following the
Steven Van Belleghem
evolution of the most innovative companies in the world from the front row. These companies include the biggest names in the
www.stevenvanbelleghem.com
field of technology (Google, Facebook, Amazon, Tesla, Tencent,
www.youtube.com/stevenvanbelleghem
Alibaba, Microsoft, etc.), established market leaders (Cisco, Oracle, INTRODUCTION
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CUSTOMERS THE DAY AFTER TOMORROW
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Bringing the book to life via Augmented Reality This book is about the future. One of the technologies that looks set to boom in the years ahead is Augmented Reality (AR). I will be talking about it a lot in the next few pages. But I want to do more than just talk about it; I want to use it as well. So, this is one of the first books in which AR applications have been integrated. This is what you need to do to bring this book to life:
Download the ‘Aurasma’ app on your smartphone
Create an Aurasma-acount
Look for pages with the ‘Aurasma’ logo (take a look at the cover if you are not sure)
Scan the page or the image with your smartphone
Find me, ‘stevenvanbelleghem’ via ‘Discover Auras’ and follow me on Aurasma
Watch how the book comes to life
INTRODUCTION
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CUSTOMER EXPERIENCE IN THE THIRD PHASE OF DIGITALIZATION
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Success today? Process – Measuring – Culture
tomers to give you a score between 1 and 10 to reflect how willing they would be to recommend your company to others. Whoever gives a score of 9 or 10 is a promoter. If you give a score of 0 to 6, you are a detractor. By subtracting the number of detractors from the number of promoters, you end up with your Net Promoter Score. The central proposition of this book is simple: if you measure your NPS, this single score will tell you whether your company is performing well or not. If the score is higher than zero, your company will grow faster than the market. If the
Before we look forward into the future, I would first like to look
score is lower than zero, you have a problem. The most important
back at the recent history of customer experience management,
impact of NPS was felt in the boardroom. Many top executives
using three seminal books as examples. Each of the three books
now suddenly had a way to measure and interpret how custom-
added fundamental insights to the customer experience debate.
ers saw them. The concept has always had its supporters and opponents, but it is impossible to deny that it had a huge effect
The first is The Disney Way5 (Bill Capodagli, 2001). Since its earliest
on the business world. Customer experience evolved from some-
days, Disney has been a reference for customer experience. This
thing you had to ‘believe’ into something you could ‘measure’. As
book describes the entertainment company’s service philosophy.
a result, it brought customer experience management higher up
In short, it is a story of perfectly designed processes to make
the agenda.
the life of the customer as enjoyable as possible. The first step towards satisfied customers is to make sure that all your transac-
The third influential book was written by Tony Hsieh, the CEO of
tions run smoothly. And if you visit one of the Disney parks, you
Zappos. Delivering Happiness7 (2010) tells the story of one of the
will immediately notice that each and every one of their process-
world’s largest online shoe stores, which is now generally regard-
es is still thought out to the very last detail. They have even set
ed as a leading pioneer in the development of enhanced custom-
up a separate division, the Disney Academy, to share this philoso-
er experience. They first became famous as a result of a number
phy with other companies.
of seemingly extreme decisions, which all worked to the benefit of the customers, but at times appeared detrimental to the com-
22
The second book is The Ultimate Question6 (Fred Reichheld,
pany. However, Tony is convinced that if you choose what’s best
2006). It was this book that introduced the Net Promoter Score
for the customer, you will also be choosing what’s best for the
(NPS). To calculate your Net Promoter Score, you ask your cus-
company. So just how extreme were these decisions? Here’s an
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