Global State of

Customer Service
Sophistication
Leveling Up To Deliver a
Modern Service Experience

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 As Vince Lombardi once said, “It takes months to find a
customer and seconds to lose one.” Known predominantly
as one of the greatest football coaches of all time, Lombardi also
served as a general manager, where his business prowess and
understanding of the customer dynamic came to life.

In today’s fiercely competitive landscape, businesses can’t afford

to take Lombardi’s words lightly. Nor can they ignore the need to
Introduction consistently deliver exceptional customer service experiences to
consumers demanding faster, more efficient 24/7 support.

That’s largely because of the growing Organizations recognizing the growing But where should they start? To answer
alignment between customer service and complexity and consequence of the that question, Microsoft introduced
brand loyalty. Research shows that 96 service relationship and looking to bridge the Service Sophistication Model, an
percent of customers will leave without the divide have sought out new tools online assessment focused on helping
warning due to poor customer service.¹ and technologies to help improve service organizations worldwide assess their
Think of the dynamic as follows: Quality delivery for both the customer and the current level of service and explore
and value represent input variables, employee. This includes everything from how they would like to transform. The
brand trust and customer satisfaction omnichannel engagement to self-service, model aims to provide respondents with
serve as intervening variables, and brand automation and AI-enabled technologies personalized guidance on improving their
loyalty becomes the output variable. that can assist agents in faster resolution customer service level of sophistication.
and increase customer satisfaction.

¹ Janine Hunt. “Guest Post: The Shocking Percentage of Customers Who’d Leave Your Business Due to Bad Service – and What You Can Do About It.” Shep Hyken Blog, 2022,
https://hyken.com/customer-loyalty/shocking-percentage-of-customers-whod-leave-your-business-due-to-bad-service-and-what-you-can-do-about-it/. Accessed April 2023. 2
A review of the Global Interest With a Majority of The 2022 model showed 65 percent participation from
North American and Western European respondents,

aggregated data Respondents from North America traditionally the leading markets for CRM software,
followed by 26 percent form APAC Eastern Europe and
since the model was and Western Europe South America, and 9% Other.

launched in July 2022

shows a proactive
interest in the topic
from a variety of
organizations. Broadly,
the characteristics
of those that chose
to participate in the
assessment are as
follows:

65 % North America
and Western
Europe 26
% APAC Eastern
Europe and
South America 9 %
Other
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Businesses of All Sizes
Professed Customer
Service Needs
15% 11% 11% 11%
Financial services Retail Healthcare Public sector

20% Small businesses (less

than 100 employees)

Even Distribution Among Industries

52% Mid-size (100-5,000
employees)
Respondents were distributed somewhat equally across industries. Financial services led the

25% pack at 15 percent of respondents, followed by retail, healthcare and the public sector at about
Large enterprises (5,000 11 percent each.
or more employees)

The participation across the board illustrates that the interest in creating a more robust customer experience isn’t limited to a particular geography, organizational size, or industry. And while many of these organizations
represent different service levels of sophistication, respondents had a singular objective of empowering their service employees and delivering value to the customer that results in long-term relationships with the brand.
Most importantly, the participating companies’ interest in improving customer service provides an opportunity to spark a conversation that can stimulate change – one that can transform and uplevel their service in
today’s evolving customer service landscape.
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Understanding the challenges
and opportunities in customer
service across the globe
Modern-day customers expect ease and speed at every touchpoint. They want to interact with Many of today’s organizations recognize the increasing closeness of customer service and brand
trained, knowledgeable staff who are empathetic to their needs, they want a seamless journey loyalty. That’s why many are looking to evolve from their current service models to contemporary
that shows the company is integrated across channels. They want a personalized approach that service offerings more closely aligned with the needs of today’s customer, as we observe with the
anticipates their needs, and they want to feel empowered through self-service options that give following findings based on the 2022 assessment:
them control.

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Call centers represent
primary channel for
customer service, with 15 %
omnichannel engagement
47
Voice + Web

making strides
%
E N G AG E M E N T

38
Voice dominates as the primary engagement channel, with many Voice only
CHANNELS
respondents indicating they currently manage their customer service
relationships via a call center and static website with FAQs. At the same
time, omnichannel is making strides, with nearly 40 percent of respondents
%
indicating their support and/or use of digital channels to round out their
customer service offerings. A seamless omnichannel experience can
meet the customer on the channel of their choice and readily address Omnichannel
their concerns effectively and effortlessly. Nearly 60 percent of the market
that just uses voice or a combination of voice and web can level up to
omnichannel engagement.

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36 %
Based on the assessment
participation, there appears to
Agent numbers high,
be a continued reliance on agent
support. More than 36 percent of reflecting continued call
center approach
respondents had more than 100
customer service agents.

and an opportunity for

35
N U M B E R O F AG E N T S ( % )
automated self service
30
When assessing customer service sophistication within organizations, it’s also useful
to consider the number of agents versus the overall number of employees in the
25 organization.

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While agents can be great experts, it may make sense for businesses to focus on self-
service options, offloading the agents’ time for more complex scenarios. For companies
looking to take their customer service to a new level, implementing digital channel
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support, automated self-service support via virtual agents such as chatbots, web portal
knowledge resources, and providing personalized support across those channels can
10 help enhance the level of sophistication and overall customer experience.

5 It may be more practical to focus on technologies that can help those agents be more
productive and knowledgeable. This includes AI-powered case management and
collaboration tools that can help elevate employee effectiveness and empowerment by
0
offering a more holistic view of the customer and their interactions with the company.
0-10 11-100 101-1000 1000+
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Manual routing still practiced, with automated and AI-powered
routing adoption gaining ground
Routing to the right agent for first-time resolution
is a critical aspect of exceptional customer service.
Respondents indicated that routing is done
manually by 40 percent of companies. However, 50
many are working toward more knowledge-driven
solutions, with 32 percent deploying some form of
pre-defined routing rules, 16 percent leveraging

16 12
40

40 32
an automated routing approach and 12 percent
engaging AI-based solutions.

It’s promising to see that many organizations

30 % % % %
are looking to upgrade their routing methods,
moving across the spectrum toward even more Manual Pre-defined rules Automated AI-based
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AI-based options. These modern approaches
can help organizations achieve a higher level of
sophistication and improved agent productivity.
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Intelligent unified routing across channels can
provide a seamless customer experience, and
considers factors beyond just agent skills and
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availability, and includes factors such as customer
preferences and behavior. This helps agents avoid
tedious transfer calls, allowing them to focus on
more relevant issues within their wheelhouse.

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Organizations care about enhancing agent productivity, growing
from a siloed to a holistic knowledge-drive approach

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While respondents indicated that about 44 percent of their agents are

% working with only basic information, there appears to be a trend toward

more knowledge-based, holistic and AI-assisted agent support. In fact,

60
60 percent of companies participating in the assessment indicated their

%
Knowledge based

commitment to increasing agent productivity using a knowledge base,

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modern case management and collaboration tools – with 27 percent

% providing access to information; 19 percent offering a 360-degree customer

view and 12 percent furnishing advanced capabilities such as next-best
Holistic action, AI recommendations and collaboration.
of companies participating in
the assessment indicated their

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commitment to increasing agent It’s no secret that increased productivity is bolstered by a complete view
productivity using a knowledge
base, modern case management
% of the customer and their journey. Witnessing more companies move
toward providing their agents with the information needed to help improve
and collaboration tools. the customer experience is a favorable development. Those organizations
AI-assist
interested in upgrading to next-level service should be focused on
empowering the agent with a 360-degree view of the customer, a multi-

42 %
session workspace, modern case management and collaboration tools to
enable a seamless and personalized customer service experience. After all,
an empowered agent can grow in the role and become a resourceful and
Basic information
motivated brand champion. A frustrated agent is likely to seek opportunities
elsewhere.
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Manually generated
46
% still manually generating insights from

insights prevalent in silos

historic support data and customer
feedback.

as automation drives data

analytics in integrated systems
This breakdown clearly shows an area of opportunity for organizations looking to
plus-up their customer service efforts. The ability to leverage insights can be vitalizing
in terms of activating against customer needs and wants. AI-enabled analytics can
25
% aggregate data analysis to drive process
improvements.

help organizations identify trends in issues and service gaps, leading to the ability to

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prioritize initiatives for maximum impact. Adopting AI-based analytics can significantly
speed up data-driven decisions and improvements to service operations.

While using data received from customers to restructure a workflow or change how a
% generate insights from their integrated
systems for data driven decisions and to
automate workflows.
customer may interact with the company may feel like a large undertaking, it also can
be a fruitful one for organizations interested in taking the step forward.

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In summary, the assessment findings illustrate where the customer service level
currently stands. Additionally, it shows their commitment to improve customer
satisfaction and help organizations reach those goals. % get real-time insights and predictive
analytics to enhance customer and
employee experiences.

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What organizations can do
today to improve service
operations for tomorrow
There is room to evolve when it comes to harnessing the power of
the customer service experience, no matter what the organization’s
current service level may be. Opportunities for improvement can
always be found as we seek to provide an even more personalized,
responsive, intuitive customer experience. And the technology to
help organizations do so is constantly improving, creating a more
congenial starting point for organizations intent on taking the
steps needed to address their unique service demands in a timely
and effective manner.
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To create the optimal customer experience, it’s important to technology, including AI and analytics, knowledge management,
understand customer behaviors, preferences and expectations collaboration and more, to streamline case management, enable
– as well as the latest technology and service solutions available. personalized service with a 360-degree customer view, and
It’s about reimagining the delivery of customer service to craft provide visibility into how the service is performing.
experiences focused on creating positive engagement and
building overall brand loyalty. Microsoft is strategically positioned to provide a unique,
comprehensive service solution that caters to various categories
How can organizations do this? By being both agile and attentive, and a wide range of capabilities. This includes Microsoft Teams
with a mindset focused on a comprehensive, customer-centered to enable unified communications and collaboration, Microsoft
approach to customer service. We’re in a period of opportunity Dynamics 365 to provide omnichannel and CRM capabilities,
and a market ripe for AI and automation. The technology to take Nuance’s CCAI, and Azure cloud.
organizations to the next level is here now, with generative AI
transforming customer service, as is evidence of a solid return Service organizations can maintain their existing contact center
on investment for doing so. infrastructure and enhance their customers’ experience by
leveraging the Microsoft Digital Contact Center Platform. This
Fortunately, this evolution doesn’t have to happen all at one time. platform integrates with partner innovations to provide an open,
It’s more about embracing the need to create value for every collaborative, and adaptable solution designed to provide the
interaction along the customer journey and finding the tools optimal customer experience.
that can offer the connectivity and accessibility to help provide
maximum engagement. That digital transformation can begin For more information on how your organization can build
with the implementation of small changes and applications, with loyalty and deliver consistent, exceptional customer experiences,
the potential to evolve into a cutting edge service solution. It’s visit https://dynamics.microsoft.com/en-us/customer-service/
all about customizing capabilities to each individual business’ overview/.
needs, making the right changes at the right times.
For a deeper dive, check out Microsoft Digital Contact
Microsoft Dynamics 365 Customer Service can help organizations Center Platform documentation, including a link to reference
with this evolution, to optimize service operations, personalize architectures to guide the deployment that can make the service
customer experiences and increase overall productivity. An experience you have in mind into reality. For specific examples
integrated agent experience is the heart of Dynamics 365 of how other organizations transformed their customer service
customer service, which is designed for flexibility based on the experience, take a look at some recent customer case studies for
organization’s unique business needs. It leverages the latest NatWest Bank, Westpac NZ and SHI Cryogenics Group. 12