AI customer experience is emerging as one of the dominant trends in customer service – this article will explore what it is and why so many companies are adopting AI to improve their CX. Good customer experiences help people feel good about a purchase and a brand. This positive experience influences them to come back in the future. The more efficient and personalized the experience is, the more likely companies can turn a first-time customer into a long-term loyalist and advocate.
Traditional businesses are now competing against innovative, digital-native upstarts that have grown customer bases by prioritizing the customer experience (CX). Good CX is no longer an option: 2/3 of companies compete on customer experience, up from just 36% in 20101. Consumer-facing companies across industries are using Artificial Intelligence (AI) to enhance the customer experience.
What Is AI Customer Experience?
AI customer experience is a holistic view of how customer experience is augmented by artificial intelligence. AI customer experience leverages technology like machine learning (ML), deep learning, and natural language understanding (NLU) to automate all the little interactions that make up a customer’s experience. The key difference between “AI customer experience” and “AI customer service” is that AI customer experience is not limited to rapid resolutions to customer questions and issues.
How AI Customer Experience Works?
One example of how AI augments customer experience is via an AI-powered chatbot. An AI chatbot can function digitally through messaging platforms like WeChat and Facebook Messenger, email, and on voice assistants like Alexa and Google Assistant. The biggest benefits of AI customer support are eliminating wait times historically present with human-only support, helping customer service reps work more efficiently and automating mundane tasks so human agents can focus on complex issues. The result is happier customers who turn into long-term loyalists and reduced customer service costs.
How Does AI Improve the Customer Experience?
AI can enhance the customer experience in many ways. It streamlines processes and automates and simplifies everyday tasks. According to Gartner, “58% of consumers will use AI to save time, and 56% said they’d use it to save money. The more time they save, the more likely they are to purchase a product, and the more money they save, they’re likely to return to your business to buy again.2”
Using AI to enhance the customer experience pays off in many ways:
- Customers who rate a company as delivering a “good” customer experience are 34% more likely to purchase more and 37% more likely to recommend3
- Companies with a customer experience mindset drive revenue 4-8% higher than the rest of their industry4
- Companies that lead in customer experience outperform laggards by nearly 80%5
7 Examples of How AI Transforms Customer Experience
Companies are deploying AI to create much better customer experiences in these seven key ways.
- Create Hyper-relevant Digital Ads
- Power Personalized Search
- Help Customers Find The Best Price
- Provide Immediate Answers To Questions
- Anticipate And Prevent Issues
- Empower 24/7 Support Across Every Channel
- Eliminate The Hassle Of Returns
According to Joanna Coles, the former chief content officer of Hearst Magazines, “People hate advertising.” This is because, according to Marc Pritchard, the chief brand officer at Procter & Gamble, ads are often irrelevant and sometimes “just silly, ridiculous or stupid.6“
Advertisements are not going anywhere, but the experience is ripe for change:
- 91% of people say ads are more intrusive today than 2-3 years ago7
- 83% of people agree with the statement: “Not all ads are bad, but I want to filter out the really obnoxious ones”7
- 25.8% of internet users were blocking advertising8
To address the challenges with digital ads and make them less intrusive, brands are harnessing AI to show hyper-relevant ads. Machine learning helps companies anticipate if a person is likely to click on an ad – based on online behavior, customer profiling, and audience segmentation.
For instance, predictive targeting allows companies to adapt ads to an individual customer and recommend products in an ad based on thousands of signals. These algorithms improve over time to provide increasingly personal ads.
AI is being used to help customers discover the most relevant products and streamline the online user experience. This is driven by the fact that 80% of consumers are more likely to purchase from a brand that provides personalized experiences9.
Personalized search is typified by Netflix. The streaming company has rights to 13,612 titles10. To help customers more quickly find something they want to watch, Netflix’s AI crunches huge amounts of data to present a different home screen to each viewer. The recommendations are based on past viewing behavior and granular audience segmentation.
Online shopping is another example of personalized search enhancing the customer experience. eCommerce companies are using AI to surface highly relevant products from expansive online catalogs. Wayfair, for instance, has 37,173 coffee mugs. AI-powered search provides a better user experience by eliminating the need for people to scroll through multiple pages to see the few products they might be interested in. AI-powered personalized search will only become more pervasive as 71% of consumers feel frustrated when a shopping experience is impersonal11.
AI is also helping customers find the best prices so they can be confident that they are getting the best possible price based on predictive intelligence around price fluctuations. For example, Hopper is a highly-regarded startup in the travel space that heavily relies on AI to provide an exceptional customer experience. The company “offers travelers flight recommendations based on highly accurate pricing predictions, uncovering price drops and exclusive deals relevant for the traveler.”
Netomi offers AI for customer service, providing instant resolutions to simple everyday queries like order or flight status, refund policy and requests, and other FAQs. Advanced customer service AI platforms can integrate with back-end systems like CRM and shipping platforms to provide personalized resolutions to an infinite number of customers at the same time. This frees up customer service reps to focus efforts on high-impact, complex customer situations – providing better customer satisfaction (CSAT) across the board.
Companies are also using AI for proactive customer service, which allows them to anticipate and solve customer problems and issues before customers are even aware. Examples include alerting a customer when a package will be arriving late due to weather delays, offering early check-in to a customer whose flight arrived early or proactively educating a person on how to care for a product. For instance, HP lets a customer know when their printer ink is about to run low and provides a frictionless way to repurchase compatible ink. This eliminates user frustration – improving customer effort score – and the need for a customer to reach out themselves to a company to resolve an issue.
There’s an increasing number of channels where customers expect to receive customer support. Human-only agent teams are expensive and hard to staff to manage multiple channels, around-the-clock. AI helps companies scale support across email, chat, voice, messaging, SMS and voice platforms. This allows customers to get the support they need on their preferred channels. Without AI, it would be cost-prohibitive to have truly omnichannel support that customers expect i.e., immediate, personalized, meaningful.
Returns are a part of the online shopping experience. Over 30% of all online purchases are returned. Although retailers have made efforts to make the return process as seamless as possible over the last few years, returning an item is still frustrating. AI helps improve the customer experience by anticipating when a return is likely based on items in a shopping cart or user behavior. For instance, if a person has multiple sizes of the item or has checked the size guide and return policy within the same session, it could indicate that a person is unsure of what size to buy. AI-powered chatbots are preemptively intervening to help the customer find the best possible selection to avoid frustrating and costly returns.
The Final Word
AI is drastically improving the customer experience, delighting customers across the customer journey. And the result of adopting AI for CX is not just happier customers, but also a better topline: 84% of companies that work to improve their customer experience report an increase in their revenue12.
Would you like to learn more about how AI can improve your customer experience? Our CX experts would love to chat.