[June 12, 2019]

Gartner Identifies Five Challenges to Growth and Adoption for Virtual Customers

The proliferation of Internet of Things (IoT)-connected devices and artificial intelligence (AI)-enabled virtual personal assistants (VPAs) gives rise to a new way to serve customers and a new, virtual customer to serve. However, five challenges to growth and adoption must be overcome before this emerging trend becomes reality, according to Gartner (News - Alert), Inc.

"We are still several years away from creating autonomous virtual customers that can function with minimal human intervention," said Tiffany Fountain, vice president and team manager at Gartner. "However, existing capabilities suggest virtual customers will become a greater presence in purchase and service activities. Before this becomes reality, customer service and support leaders must understand how these virtual customers behave and what implications they may have for the enterprise."

Before intelligent virtual customers are developed and deployed at scale, the following five challenges to growth and adoption will need to be addressed by customer service and support leaders:

Challenge 1: Technology Capacity and Capability

There are two key domains of knowledge that must be mastered for a virtual customer to be truly autonomous and a realistic substitute for a human customer: the depth of a customer's preferences and the breadth of factors that may influence a customer's actions. Without each, the virtual customer is unable to navigate required trade-offs. Another challenge is machine-to-machine communication. These system compatibility issues will slow the pace of deployment and acceptance with virtual customers.

Challenge 2: Data Privacy Regulatory Environment

Another key challenge to virtual customers is the current regulatory and operating environments. Most organizations face a lack of clarity in legislation and internal policies, not to mention insufficient technology to ensure privacy rights are upheld. Organizations will need to ensure a virtual customer is authentic, appropriately permissioned to act on behalf of the customer and can interact with other organizations' channels and technology. In addition, organizations will need to decide if they are comfortable with devices interacting with their sales and service channels, and whether they are willingto accept personally identifiable information (PII) from third-party virtual customers.

Challenge 3: Determination of Legal Liability

Legal liability is a major barrier to adoption for virtual customers. When it comes to failed transactions, organizations will need to establish policies for determining liability and what the adjudication and settlement process will be for a failed transaction. On the other hand, in the case of crimes, organizations and legal institutions must also determine if user data collected by VPAs is protected under constitutional law.

Challenge 4: Brand Strategy

Gartner predicts that 75 of the top 100 global consumer brands will lose 20% of their brand equity value due to decreasing brand loyalty and the increasing influence of digital gatekeepers that virtual customers are likely to exacerbate. Organizations will need to explore how to keep control of the relationship with the consumer without having direct contact. The key will be in how organizations engage virtual customers' algorithms in place of engaging human customers' emotions.

Challenge 5: Human Acceptance

Growing distrust in technology is a major challenge to overcome for the growth of virtual customers. Gartner research shows that an increasing number of consumers would trade convenience for the assurance of data privacy. It will be imperative for organizations looking to deploy virtual customers to consider ways to foster human trust and confidence.

Additional details on the adoption and growth of virtual customers and the impact on customer service leaders and their organizations are available to Gartner for Customer Service & Support Leaders clients in the report "When Things Become Customers: What Customer Service Leaders Need to Know About Emerging Virtual Customers."

About Gartner for Customer Service & Support Leaders

The customer service and support function is vital to maintaining customer loyalty and influencing brand perceptions. Gartner for Customer Service & Support Leaders provides indispensable insights, advice and tools needed to achieve service and support leaders' mission-critical priorities, specifically improving the customer experience while managing costs. Gartner's research, advice and best practices equip customer service and support leaders to design an optimal service channel strategy; measure and reduce customer effort; and hire, develop and retain high-potential frontline talent.

About Gartner

Gartner, Inc. (NYSE: IT), is the world's leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries - across all major functions, in every industry and enterprise size. To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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