Home / Blog / Data & AI / The impact of artificial intelligence on the customer service industry
_The impact of artificial intelligence on the customer service industry
author
Jacek Gralak
Portfolio Director
6 August 2024
Reading time: 15 minutes
Customer service, though often underestimated, is an important department of modern companies, responsible for maintaining and strengthening customer relationships. In recent years, a revolution in customer service is taking place due to the implementation of numerous AI solutions. The support of AI enables organizations to realize efficient, personalized, and responsive customer service, enabling them to build strong relationships in a competitive market.
But let’s face it, customer service isn’t just about keeping customers happy – it’s also about juggling endless phone calls, emails, and complex customer requests. Behold AI: the superhero of customer service. With artificial intelligence at your side, customer service processes are transformed from clashing chains into a well-oiled machine.
AI in customer service automates routine tasks, analyzes customer data, and anticipates customer needs.
This allows companies to respond to service inquiries faster and more accurately, increasing customer satisfaction. What’s more, AI tools can operate 24 hours a day, 7 days a week, providing continuous support and ensuring that customers get help whenever they need it.
Integrating AI into customer service not only improves operational efficiency but also helps companies gain deeper insights into customer behavior and preferences. Using these insights, companies can tailor their services to the unique needs of each customer, fostering loyalty and long-term relationships. The future of customer service is largely AI-based customer service tools.
Sounds interesting? Read our article to learn how implementing AI in customer service processes can help your business.
Use of AI in customer service
1. Agent workforce scheduling
AI combines information about support agents (customer service teams), such as preferences and skills, with historical information about customer inquiries from various channels. This data is used to plan and track and forecast demand (how many inquiries there will be on what topic) in real time. Companies implementing agent scheduling performed by AI can achieve optimal staffing levels, reduce operating costs, and increase employee satisfaction. This requires a careful integration process, but customer service tools streamlined in this way will yield long-term benefits of smoother processes and better labor and resource management.
2. Chatbots for self-service
Natural language processing (nlp) and natural language understanding (NLU) make AI interact with customers via text or speech, identifying and addressing their intentions. For example, customers seeking information can do so via text (AI chatbots) or verbal queries (voice assistants). By adopting this technology, customer service chatbots and voicebots can provide immediate support, fasten response times, and increase customer satisfaction. While initial setup and training may take some time, the result is a scalable 24/7 customer support solution that significantly reduces the burden on support team.
How do chatbots work?
Voicebots in contact centers and AI chatbots are revolutionizing customer service processes. With advanced NLP, algorithms that enable them to understand customer questions and respond in real time, they offer instant answers to customer inquiries.
3. Customer emotion detection
AI technologies analyze the emotional state of customers using computer vision, audio/voice input, sensors, and logic. Retailers, for example, can use a camera to analyze facial expressions to determine which products are most appealing to customers. Companies using this technology gain valuable insights into customer preferences and behaviors, allowing for better personalization of the customer service experience and effective marketing strategies. The use of AI in customer service to interpret customers’ emotions raises questions expressed with the question: “what are the ethics of customer service interactions?”. Does AI in marketing used in this way cross privacy boundaries and violate moral principles? These are questions that society is watching and analyzing on an ongoing basis, with the development of AI in customer service and other areas of life.
Despite the need for investment in advanced infrastructure and the considerations mentioned earlier, the potential for increasing customer engagement and satisfaction through AI in marketing is enormous. The fact is that the impact of customer service on a company is skyrocketing, both in the B2C and B2B industries.
4. Journey analytics for NBA Maps
Another example of AI in marketing and business is AI used to monitor and analyze customer behavior across a company’s various channels (website, apps, social media, call centers, etc.). AI systems interpret how customers use the various live channels; they model and predict where the customer’s journey might stop.They then suggest ways to interact, such as offering a coupon or consultation. This analysis of customer data positively impacts the quality of service, increases conversion rates, and enhances customer loyalty. Although the analytics setup is usually complex, the benefit is a smooth and satisfying customer journey, which translates into a strong relationship.
5. Customer segmentation
AI algorithms can also segment customers according to the information they obtain for analysis, e.g., by demographic, geographic, psychographic, and other data, operating in real time or offline. Segmentation makes it easier to offer services tailored to the customer’s needs/situation – AI can identify regular and new customers, for example, and the offer will be different for both groups. Using this approach, companies can tailor their marketing efforts and offerings to the specific needs of each segment, which can boost agent efficiency and increases audience satisfaction.
*AI in marketing means reliable customer service only when AI cues are put to good use by human agents.
6. Human-in-the-loop AI Training
AI challenges sometimes involve algorithms themselves and require human involvement. HITL stands for Human in the Loop, and refers to improving the performance of algorithms based on human input. With input from human agents, AI systems learn, are tested, and when they adjust and stabilize performance, AI customer service becomes personalized and tailored to the needs of the company and its customers. Contact center performance indicators peak, service outsourcing is no longer necessary, the organization gains better financial results, and strengthens its position in the market.
*HITL intention training is related to the area of Machine Learning meaning machine learning.
7. Hyper automation for fulfillment
AI methods are being incorporated into task- and business-oriented technologies, including automation practices such as:
robotic process automation,
workflow automation,
integration of platforms and intelligent business process management packages.
Example: customer service centers can optimize the process from order to shipment. Companies implementing hyper-automation streamline operations, reduce errors, and increase overall productivity. While the initial investment and integration process can be intensive, the long-term increase in productivity and customer satisfaction is significant.
8. AI-based customer routing
Predictive analytics determines the best-matched resource for customer queries using agent personality classification and behavioral pairing based on historical data. The agent can be selected based on the customer’s purchase history, providing a more personalized and efficient interaction. This approach optimizes resource allocation and improves customer service.
9. Knowledge graphs for chatbots
Knowledge graphs store information about a chatbot’s domain, such as entities (people, products, prices, and places), improving the accuracy and speed of answers. This helps chatbots answer complex domain-related questions. Companies using knowledge graphs enhance the capabilities of their customer service chatbots, providing more accurate and contextual answers. Creating and maintaining knowledge graphs requires significant resources; however, the improved customer interactions and satisfaction make it a valuable investment.
10. Offer personalization
AI uses the behavior, customer history, and stage of the customer journey to present offers in real-time, improving conversion and order value, i.e., addressing the toughest customer service challenges. This kind of AI automation is often embedded in promotions or personalization engines, especially for product offers. By personalizing offers, companies increase sales and improve customer satisfaction. It’s worth noting that although implementing such AI systems requires detailed customer data and robust AI algorithms, the resulting increase in conversion rates and customer engagement is highly beneficial.
11. Intelligent postcall wrap-up
Text analysis, text summarization, speech-to-text conversion, domain models, and rule-based methods all improve the work of call centers and customer service departments. With these features, building an AI assistant becomes standard. The aforementioned capabilities help support team summarize a conversation with a customer, capturing the most important information from it, and the algorithm turns it into tasks to be performed. The technology helps reduce the time customer service teams spend on administrative tasks, allowing them to focus more on customer interactions. Companies implementing this solution are improving agent productivity and record-keeping accuracy. Despite the need for advanced AI tools and integration, the efficiencies gained in post-conversation processing make this a worthwhile venture.
12. Predicting customer lifetime value
Historical data on spending, abandonment of the purchase decision, cost of sales, and support provided allow predictive models to be developed to forecast future revenues and/or profits for each potential customer. This helps guide sales efforts, offerings, and actions to maintain good customer relationships. It’s a way to efficiently allocate resources and maximize the value delivered to the customer.
13. Real-time agent advisor
The aforementioned text analytics, speech-to-text conversion, and rules-based methods help agents in call centers improve performance. An agent trainer (AI) listens to calls in real-time and provides instant support or recommendations as needed. AI can help improve agent performance, increase customer satisfaction, and reduce training time. Although it requires sophisticated real-time analysis tools and continuous monitoring, the immediate support and guidance provided to agents greatly improve call center operations, increase customer service availability, and quality.
14. AI-Based PII Redaction
AI uses natural language processing, named entity recognition, part-of-speech tagging, and rules to identify and redact personal information from recordings of customer interactions or text sessions with agents. The technology ensures customer data privacy and regulatory compliance. Companies leveraging AI in marketing, including PII (Personally Identifiable Information) redaction, can protect customer information, reduce legal risk, and build trust. The importance of data privacy and compliance makes such processes essential.
15. Speech sentiment analytics
AI uses speech-to-text conversion and text analytics to extract contextual information from recorded or real-time voice interactions, including topics, emotional engagement, product opinions, and customer sentiment. Data analytics in customer service allows companies to better understand customer needs and improve their services. Implementing speech analytics can improve customer service and provide valuable business insights.
16. Agent passive voice biometrics
Voice biometrics extracts the features and characteristics of an agent’s voice to ensure that the employee is serving the call center. The technology provides security and authenticity in the remote working model. Companies using passive voice biometrics can maintain high security standards and trust in their remote operations.
*Outside of consultant’s working hours, the company can include voicebots in the call center that serve customers for the rest of the good part.
17. Virtual agent onboarding assistant
Together, chatbots and AI guide new agents through their first month on the job, integrating with employee systems; answering common customer questions and following up on specific training procedures. This approach streamlines the deployment process, reducing the burden on trainers and ensuring consistent training quality. Companies deploying virtual assistants for onboarding speed up agent preparation and improve training efficiency.
18. Visual search for customer sales
Neural network-trained models identify the context and content of images, enabling image search or the application of navigation filters by visual attributes. Customers can locate items similar to an image they have. By offering visual search capabilities, companies are improving the shopping experience and enhancing customer satisfaction. Providing a more intuitive, engaging, and personalized experiences make self-service simpler and more interesting.
The future of customer service is extremely promising, with continued advances leading to increasingly sophisticated applications. Companies are exploring innovative ways to leverage AI in customer service with increasing dedication.
Imagine a world where AI and augmented reality (AR) combine to create interactive and immersive experiences. This would make real-time customer service (such as product installation or troubleshooting) more seamless than ever.
Emotionally intelligent AI systems, capable of understanding and responding to a wider range of human emotions, are also on the horizon. These developments would enable personalized and empathetic interactions with customers.
Example: AI analyzes a customer’s tone and language; detects frustration and then responds with a soothing, supportive tone.
By implementing emotionally aware systems, organizations can build stronger relationships with their customers, increasing loyalty and trust.
In addition, integrating AI with IoT will enable proactive and seamless customer service. AI can use data from IoT-enabled products to predict and resolve problems before they occur.
Example: a smart device alerts the customer service department to a potential failure, prompting a service call or steps to resolve the problem before the customer even notices the issue. This proactive approach will minimize disruption and improve overall customer service, as well as customer experience.
Companies that are ready to embrace the potential of AI in customer service are more likely to stay ahead of the competition by offering cutting-edge solutions that are not only efficient, but also highly engaging and personalized. As AI technology continues to evolve, companies that embrace and integrate innovation will be well positioned to meet and even exceed customer expectations, ensuring long-term success.
What are the benefits of AI customer service?
AI in marketing and customer service processes offers numerous benefits that greatly improve the efficiency and effectiveness of operations. Here are a few reasons to implement AI in customer service:
increased productivity – AI can help with the automation of routine tasks that would otherwise consume valuable time and resources. It allows support agents to focus on more complex interactions, leading to faster problem solving and increased productivity.
data-driven insights and decisions – AI analyzes vast amounts of customer data, providing in-depth insights that facilitate decision-making and enable personalized service. These insights drive business strategies, product development and marketing activities, contributing to growth and profitability.
continuous support – AI-based tools operate 24 hours a day, 7 days a week, providing support to customers. Round-the-clock, real-time customer support ensures greater customer satisfaction, improves contact center performance metrics and brand reputation.
cost savings – building an AI assistant reduces the need for a large number of contact center employees, lowering labor costs and training expenses. It also handles demand fluctuations more effectively, optimizing resource allocation. Also read the article: How will artificial intelligence affect supply chain demand forecasting?
proactive customer service – the predictive capabilities of AI enable proactive, exceptional service, solving problems before they escalate. This approach improves customer service and builds trust in the brand.
improved personalization – data analysis in customer service performed by AI, allows for recommendations and solutions based on customer behavior and preferences, increasing loyalty and sales.
scalability – AI systems handle an increasing number of customer interactions without compromising service quality, providing responsive customer service availability even during peak hours.
improved agent support – AI in customer service provides real-time support for employees, improving agent productivity and reducing turnover rates.
competitive advantage – companies using AI in customer service stand out from the competition, attracting and retaining customers, including those oriented toward sustainability solutions.
better customer service – faster and more relevant responses reduce wait times and increase satisfaction.
AI – changing customer service interactions
AI in customer service is undeniably transforming the industry and call center market, offering significant benefits such as increased productivity, better customer experience and data-driven decision-making. The technology addresses many customer service challenges, providing reliable, top-notch, consistent service. Although machine learning and AI automation are improving efficiency, customer service ethics remains a key element. Companies must ensure that interactions are not only efficient, but also consistent with ethical values. In this context, human staff continues to play an invaluable role, with technology supporting rather than replacing them.
While there are AI challenges to consider, such as implementation costs and data privacy concerns, the advantages of AI outweigh the disadvantages. As AI technology continues to evolve, the future of customer interaction brings exciting opportunities for further innovation, promising even higher levels of personalized support.
Ultimately, the implementation of AI in customer service is not just a technological advance but a strategic imperative for companies that want to meet and exceed customer expectations. AI in customer service is a valuable tool, a modern answer to customer service challenges. It is the automation of contact center processes, reduced customer service costs, email handling, predictive analytics, security, interactive voice response systems, and so on. And in short? It’s simply efficiency. By harnessing the power of artificial intelligence, companies will deliver superior service, drive growth, and ensure their long-term success.
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