Key points:
- Pitcher Partners published the latest Business Radar report, focusing on the rise of customer expectations
- A panel of experts from the network firms came together to unpack key findings and answer audience questions
- While AI provides a range of opportunities for businesses, the quality of data used and consideration of impactful use cases play a big role in success.
Recently, our experts Chris Hanna, Partner, Pitcher Partners Adelaide, Joshua Haque, Director, Pitcher Partners Perth, and Sudha Viswanathan, Partner Pitcher Partners Melbourne, unpacked the key findings from the latest Business Radar report with a focus on rising customer expectations in an engaging webinar. The audience had some questions for our experts, and their insights are below.
Q: What are the biggest technology capability gaps in the middle market, and how are leading organisations using AI to close them?
The biggest challenge is trying to place AI over poor data or broken systems and expecting it to solve everything. If the underlying information is unreliable, AI will only produce unreliable outputs faster and with more confidence. Leading businesses are taking a more measured approach. They are establishing a single source of truth, improving data quality and reviewing the process changes needed before pursuing AI use cases. Rather than experimenting everywhere, they are clear about the outcomes they want and focused on the areas where AI can create real value.
Q: Are businesses using AI and other technology platforms to solve problems, but then running into trouble with integration?
Yes. A common mistake is to buy technology as soon as a problem appears, without considering how it will integrate with existing systems or how business processes need to change around it. Technology is rarely the complete answer. Off-the-shelf products can solve specific problems, but they may not always be cost effective, particularly if a business only needs part of the functionality. Leaders should first consider whether they are getting full value from systems they already have. Many software providers are adding AI and other capabilities to existing platforms, and many organisations only use a fraction of what they have already purchased.
Training and knowledge transfer are also important. When a system is first implemented, the people who received the original training may not stay in the business. If that knowledge is not passed on, newer staff may not understand what the technology can do. High staff turnover can quietly erode margin by reducing the value businesses get from their existing tools.
Q: How can businesses address customer expectations efficiently when a customer service centre is located overseas?
For offshore customer service models, businesses need to invest time on the ground. While providers may say they have done it many times before, there is real value in having someone from the business train offshore staff, understand the day-to-day issues and build capability directly. A rotation system for staff visiting offshore centres can help improve efficiency and keep the service aligned with customer needs.
From the customer’s perspective, the experience should feel seamless. If a business chooses to operate a lower cost service model, customers should not feel a negative impact. If a customer contacts the business during local business hours, they should not be told the relevant offshore team is closed without being offered another practical option, such as a call back at a convenient time.
Businesses also need a clear feedback loop. Customer feedback should help identify where service gaps are appearing, particularly where offshore support affects response times, handovers or customer confidence. Leaders should regularly review the experience from the customer’s point of view, because it can be easy to lose that perspective from inside the business.
Q: What is the role of suppliers in responding to customer expectations?
Suppliers play an important role because customer pressure often flows through the supply chain. If customers are focused on price, that message is usually passed from frontline businesses to their suppliers. But the better conversation is about value. Frontline businesses and suppliers should work together to explain and defend the value proposition, including the quality, service and inputs that sit behind a product or service.
Suppliers are facing the same challenge as their customers. They cannot simply absorb ongoing price reductions, so they need to consider how to improve quality, speed and responsiveness without undermining their own margins. Strong supply chain management becomes critical, particularly when businesses are trying to keep operations under control and maintain positive customer outcomes.
Where response times are a priority, businesses may also need to review supplier options and consider whether a broader supplier base could help improve turnaround times.
Q: If AI is replacing more frontline customer interactions, how do organisations ensure they do not lose the human connection that builds trust, loyalty and great customer service?
The answer depends on the type of customer interaction and the value proposition of the business. For some industries, personal service is central to trust and loyalty. AI or bots may be useful for lower value or after-hours interactions, but businesses need to be clear about where human connection matters most.
Customers are becoming more comfortable interacting with AI when the experience is useful, transparent and appropriate. They should know when they are dealing with a bot and not be led to believe they are speaking with a person. As the quality of AI interactions improves, businesses can offer a mix of service options, such as 24/7 AI support for simple queries and human support during set hours for more complex or high value conversations.
The key is to decide which interactions require expertise, empathy and trust, and which can be handled effectively through automation. Premium products, complex services and sensitive decisions often still need a human conversation.
Q: How do leaders avoid investing in technology that does not solve the right problem?
Leaders need to be clear about the underlying problem before they invest. Many businesses start with a broad view of what is wrong, then add technology without first mapping the business requirements, workflows and process changes needed to reach the desired future state. That can lead to technology being treated as the whole solution when it is only one part of the answer.
A useful first step is identifying the actual pain point rather than the perceived one.
For example, one of the time-consuming components of what we do is to take all of the work that we’ve done.
And to appropriately summarise it for our customers in a bill.
And so a technology solution might be to say, okay, we can put AI on top of this and we can automate everything and it’ll spit out a nice bill that we can send to our customer and our customer will be happy.
But the challenge is, if the person right at the start of that process who does the work doesn’t capture their time correctly and or put it in with the appropriate narrations, technology is not going to solve that problem. Technology is not going to be able to automate and give you a bill that the client understands
The issue is not the lack of automation, but the quality of the information being captured at the start of the process.
Technology can make processes faster, but it cannot fix poor inputs, unclear ownership or inconsistent behaviours on its own. Businesses need to review the people, process and data issues first, then choose technology that supports the right change.
Q: What should businesses do if customers are demanding faster service and lower prices?
Businesses need to decide whether those expectations can be met profitably. If a market expects faster service and lower prices, but the business cannot deliver both without eroding margin, it may need to reconsider whether that is the right market to serve.
The focus should be on differentiating through value. Not every customer will value the same level of quality, service or expertise, and that is acceptable. Businesses should be prepared to explain why their offer is worth the price rather than competing purely on price.
