Customer Experience 3.0 is here. Digital transformation removed the… | by Alex Klein

Experience 1.0: centered around human employees

Perceived value = Partnership – Control

Experience 1.0 was based in the physical world — with interactions centered around human employees.

In this model, human employees partnered with customers at every step along the way — functionally and cognitively — to support the holistic experience.

However, perhaps naively, in Experience 1.0, we had relatively little control over the interaction. We had to balance our checkbooks rather than just logging into an online platform; we had to wait for stores to open to make a purchase, and we had to save receipts to keep track of our order history.

In this era, the perceived value was defined by how well human partnership offset the consistent lack of control in the physical world.

If a company wanted to create differentiated value for customers, it had one option: increase human partnership across the journey.

Experience 2.0: centered around digital interfaces

Perceived value = Partnership – Control

Then the digital world emerged. Companies salivated at the cost-savings and operational efficiencies that could be gained by removing the human partnership layer and replacing it with digital interfaces and interactions.

Thus, we went through two decades of digital transformation to take every physical storefront, workflow, and interaction and replicate it in a digital environment.

A new value equation emerged. In this era, the perceived value was defined by how well a digital interface could offer the control needed to offset a lack of human partnership.

In this era, if a company wanted to create differentiated value for customers, it had one option: improve the digital experience to increase a customer’s control.

This has led to our enthusiastic focus on adding functionality to support more tasks and needs, and removing any sign of friction along the way.

It’s also worth contextualizing that the sub-eras within Experience 2.0 — first digital applications, then web, then mobile–allowed us to further increase real-time control in order to offset the lack of human partnership.

Experience 3.0: centered around AI partners

Perceived value = Control + Partnership

Now, a new paradigm has emerged.

GenAI, and the advancements in large language models, have given us the power to communicate with computers in natural language. On top of that, they are proving to be shockingly valuable as cognitive as thought partners.

This advancement accomplished something that traditional AI models couldn’t: it has laid the foundation for a synthetic partnership layer to be built back into every product/service, mimicking the human support layer that digital transformation removed.

Instead of customers being alone on their journey, left to navigate an app or interface solo, customers will be continuously supported by an AI partner.

In fact, you can see the new paradigm emerging through the basic functionality of today’s AI ‘companions,’ ‘agents,’ ‘co-pilots,’ ‘assistants,’ or ‘navigators’.

In this era, perceived value will be defined by how much synthetic partnership is added to the digital experience.

In this era, if a company wants to create differentiated value for customers, it will have one option: increase the functionality, or “skills,” of an AI partner to solve more customer needs.

So what does a 3.0 experience look like? Let’s paint the picture.

In a fully-realized 3.0 experience, the customer is consistently supported across their journey by their AI partner. Or, according to Bill Gates, “you won’t have to use different apps for different tasks. You’ll simply tell your device, in everyday language, what you want to do.”

This doesn’t mean that the AI partner can solve every customer need along the way; it simply means that there is a consistent partnership/that the customer doesn’t get ditched for sections of the journey.

This becomes clearer with the launch of Sierra this week, a platform for companies to create and deploy personalized agents.

For example, imagine if a Delta companion helped customers buy tickets and navigate the airport…but then was useless once the plane landed. That’s more of a 2.5 experience.

The same logic applies to UX as well. (A fully-realized 3.0 user experience doesn’t mean that the AI partner can perform every task; merely, that it doesn’t ignore any of the core goals.)

I like referencing Glyphic as an example of an early-stage 3.0 experience. Glyphic offers an AI sales copilot to support a sales rep throughout the journey.

The copilot doesn’t solve every customer need throughout the sales journey, but it is actively present, offering partnership throughout the end-to-end experience — from prepping for the first call, to offering insights after the deal is closed.

Many companies feel tremendous pressure to join the AI ‘arms race’, so they’re shipping arbitrary functionality — rather than strategically planning for a new experience paradigm.

I’m not against rapid experimentation; however, I believe a company’s AI initiatives should be grounded in a deeper strategy and vision.

Or, as said by Jeff Goeth, “If an idea, regardless of how shiny, new or powerful, isn’t going to make your customers more successful, wait. Wait until you have a better sense of where AI can help solve real problems in your product.”

In fact, Design’s first job in Experience 3.0 is to lay the foundation to strategically reinvent the CX/UX, which is made up of four things:

1. Define a 3.0 Strategy: Look across the entire experience and remind yourself of the moments where your customer feels most alone, has to do the most work, or has to make the hardest decisions. Pinpoint the right customers needs to solve with the unique capabilities of an AI partner.
2. Illustrate a 3.0 Vision: Vividly paint a picture of your fully-realized 3.0 experience, highlighting key moments where the AI partner will support your customer. This vision should focus on the end-to-end experience, helping people feel the power of a fully partner-based experience.
3. Outline the roadmap: Backcast from the vision to sequence the path for implementation. You may want to focus on one section of the journey at a time, until the full journey is supported.
4. Blueprint MVP features: Define your MVP features. These are the first needs that you will solve with an AI partner. Design a feasible and reliable AI solution. Document key requirements, technical considerations, and risk mitigations to prepare for a proof of concept.