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AI for Customer Service: Challenges, Benefits, Examples

20th Nov, 2023
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    AI for Customer Service: Challenges, Benefits, Examples

    Customer service specialists have encountered intense challenges in recent years. How can we accomplish more with fewer resources in light of shifting budgets and increased client expectations? The use of artificial intelligence in customer service holds the key to the solution. Customer expectations have increased significantly, with 72% of consumers saying they value faster service and 78% of service agents saying it is getting harder to strike a balance between speed and quality.

    Although customer service has long used predictive AI, the promise of generative AI is drawing a lot of attention as it evolves. Artificial intelligence is developing at a rapid pace, and this could significantly change the customer service industry. These improvements are meant to promote corporate success, increase operational effectiveness, and boost consumer experiences. In this post we will look at the use of AI in customer service, examples of artificial intelligence in customer service, AI tools for customer service and much more.

    AI in Customer Service

    AI for customer service, also known as AI customer support, uses AI technology, like chatbots and virtual assistants, to improve and automate various elements of customer care and support. Customer service leaders can seize a variety of opportunities that can progress their businesses, increase their influence, and promote professional development by adopting AI and utilizing its potential. The customer service industry is going through an exciting period with limitless opportunities for success. Modern consumers expect real-time responses. When they reach out for support or information, they want quick and accurate answers. Delays can lead to dissatisfaction and impact brand reputation.

    96% of consumers worldwide say that while determining whether or not to remain loyal to a company, customer service is an important factor. Real-time service for customer support platforms can only be enabled with artificial intelligence. Today, customer service has improved as a result of developing technologies, such as conversational AI powered by machine learning and natural language processing, and we are just getting started. Additionally, new technology may change how customer service solutions are created. To keep pace, employees are being actively trained by businesses in Data Science training programs to adapt to the evolving customer service and AI scenario.

    Challenges that AI in Customer Service Address

    A variety of issues that both organizations and customers encounter with traditional customer care are addressed by AI for customer service. The following are some major obstacles that AI assists in overcoming:

    1. Putting client requirements first

    Prioritizing customer requests was the biggest problem facing customer service leaders in 2022. It can be challenging to sort through incoming inquiries to determine which ones need the most immediate attention as businesses struggle with an increase in support requests. Numerous AI systems examine the keywords and emotion in incoming requests to find those that are of high importance before prioritizing the requests according to their urgency. Reps can instantly address high-priority issues when requests are filtered.

    2. Saves time and automates client service

    Reps do numerous jobs of varied complexity, so things accumulate and solving them might be difficult. Artificial intelligence has the ability to automate operations, so they happen immediately without the involvement of a human. While some solutions, like chatbots, can do complete jobs on their own, others take on minor chores to prevent people from being overworked. On average, reps reported saving 2 hours, 11 minutes per day when responding to customer requests using generative AI, and 2 hours, 20 minutes per day when responding to customer requests with chatbots – nearly 5 hours back for reps who use both.

    3. Long Wait Time

    Long wait times for assistance are one of the top complaints of customers. They demand prompt service, and the longer they wait, the angrier they become. Because tools may be programmed to respond to queries on their own, AI and automation can assist support teams in dramatically reducing the amount of time clients must wait to receive assistance. For instance, a machine-learning chatbot can instantly exchange return information with a consumer instead of making them wait in a long phone line.

    4. Lack of Personalization

    Although 54% of consumers say they want individualized service, it can be time-consuming to monitor specific customer data and purchasing patterns. Through automated consumer data collection and record keeping, AI in customer service enables customization and aids teams in creating comprehensive customer profiles. One of the major advantages of adopting AI based customer support in their jobs, according to service industry professionals, is personalization.

    How Can AI Improve Customer Service?

    The way organizations approach customer experience is quickly changing due to conversational AI for customer service. Companies are reinventing how they interact with and satisfy their customers by utilizing cutting-edge technology. Many businesses are investing in training programs to give their employees the knowledge and skills to successfully harness the potential of artificial intelligence in their customer service operations. The Artificial Intelligence course eligibility criteria are quite inclusive, allowing individuals from diverse educational and professional backgrounds to enroll and enhance their AI skills.

    Let us explore the various ways that AI is transforming and improving the landscape of customer experience.

    1. AI offers a customized user experience

    By utilizing AI and ML technologies, which assist in collecting and analyzing social, historical, and behavioral data, brands can get a much more accurate image of their clients. By consistently learning from the data it analyzes, AI in customer support is able to forecast customer behavior, in contrast to traditional data analytics technologies. Due to their ability to produce material that is incredibly relevant, organizations are able to maximize sales opportunities and enhance consumer satisfaction. AI-driven tailored search improves the likelihood that sales will rise and even enables buyers to instantly purchase their favored goods.

    2. Faster customer problem resolution is possible with AI

    When customers make a purchase, their immediate expectation is not necessarily complete satisfaction, but rather, they anticipate prompt and efficient service. Over 90% of clients have identified swift customer service as a critical factor in their overall experience. In response to this growing demand, companies have adapted by establishing customer care support centers, where chatbots play a pivotal role. Chatbots are purpose-built to gather user preferences and purchasing behavior data, allowing them to tailor their responses accordingly. Their ability to anticipate user needs, provide seamless experiences, and proactively address potential issues has become indispensable in ensuring customer satisfaction.

    3. Real-time decision-making and predictive behavior analysis

    Due to its capacity to quickly analyze vast amounts of data, AI for customer service uses predictive analytics to produce real-time insights that guide the interaction between a customer and a brand. Predictive engagement is what this entails, and AI is excellent at knowing when and how to reach out to each customer. You may effectively market to your customers by using real-time decisioning. One example of real-time decisioning is offering other UI elements to ad blockers. Another illustration is the use of customized recommendations to give clients more pertinent content. Artificial intelligence and real-time data may be used by brands.

    How is AI Used in Customer Service?

    In order to improve and streamline many elements of client interactions, artificial intelligence is employed in customer service. To make sure that its workforce stays up to date on the most recent developments in artificial intelligence, a lot of companies are investing in training programs. Ed tech platforms such as KnowledgeHut Artificial Intelligence course eligibility requirements cater to both beginners and experienced professionals, ensuring a wide range of learners can benefit from this program.

    Let us look at a few ways how AI is used in customer service:

    1. Give Customers Round-the-Clock Assistance

    Customer support representatives can offer quick, round-the-clock assistance thanks to the deployment of AI-powered chatbots. This suggests that even if customer care agents are not accessible, customers can contact your business day or night and get help right away. They can offer standardized answers to inquiries or self-service resources like help center articles to assist clients in finding answers or completing simple tasks. As businesses develop and enter global markets, always-on customer support is crucial to guaranteeing a quality client experience.

    2. Streamline Processes

    As previously said, AI for customer service streamlines the work of human agents by resolving basic issues, freeing them to concentrate on complex instances that call for human expertise, empathy, and attention. AI chatbots can handle common consumer questions and tasks, like answering frequently asked questions, detecting abandoned shopping carts, and assisting customers with the checkout process. If a chatbot runs into a problem it cannot fix, it can easily pass the consumer along to a human representative for additional help. The client experience is enhanced overall because of this work delegation.

    3. Gaining Information about Customers

    Customer support teams can learn more about their customers by using AI customer service software. This information helps agents decide how to handle a conversation. Agents won't need to switch between apps to find the information they need because every important detail is stored in a single workspace.

    4. Boost Agent Effectiveness and Output

    Artificial intelligence (AI) operates tirelessly without the need for rest, breaks, or fatigue. It remains available around the clock, consistently delivering high-level performance and output. Unlike human counterparts, whose tasks often take the maximum amount of time to complete, AI accomplishes these tasks in record time. It empowers your workforce to effortlessly complete their duties, without the burden of exhaustion. This makes the integration of AI into the workplace indispensable. Moreover, it assists employees in everyday task management and the development of interpersonal skills.

    5. Create Tickets Automatically

    Customers may find it difficult and occasionally confusing to submit support tickets. Customers who need assistance frequently look for a chat widget, a "Contact Us" form, or a business email address they can use to send their inquiries and grievances. By allowing users to submit inquiries through a chatbot widget that is intended to divert repetitive customer support tickets and create tickets for those that can't be handled automatically, AI can assist in automating ticket generation. This procedure can be streamlined by AI, which benefits both the agents and the clients.

    The Human Factor in AI-supported Service

    AI is excellent at automating repetitive jobs and giving prompt responses, but it cannot take the role of interpersonal interaction. Human agents are crucial when it comes to empathetic comprehension, emotional understanding, and trust building.

    Because AI-enhanced software can swiftly respond to questions on common concerns from several consumers at once, saving up human time and resources, many businesses currently utilize chatbots in some online services. However, despite chatbots' increasing intelligence, the software can still not contextualize data, which is a fundamental necessity for natural-sounding communication. Additionally, they lack the human reasoning required for diagnosing client issues, comprehending potential errors made by numerous departments, and eventually determining a remedy.

    An AI-based cognitive customer service agent can quickly analyze vast amounts of customer data—more than human agents could analyze or comprehend on their own—and highlight the most pertinent details based on the issue, enabling the human agent to respond right away without looking up information from various sources. With this well-rounded strategy, the company's staff can concentrate on resolving difficult issues with increased accuracy and effectiveness – without sacrificing the customized touch that customers desire.

    Human touch remains invaluable in customer service. Technology, particularly AI, should not replace humans but empower them to deliver better service.

    Real Examples of AI in Customer Service

    Across numerous industries, AI has revolutionized customer service. Following are a few examples of AI in customer service in the real world:

    1. The AI Kitchen Management System at Chipotle

    Chipotle started a ground-breaking project in 2022 to use machine learning and artificial intelligence (AI) to streamline its cooking processes. This project's main goal was to develop a kitchen management system that could dynamically alter ingredient amounts and cooking procedures in response to consumer demand. The new kitchen management system tracks ingredient levels in various eateries and tells the crew how much prep work has to be done and when to begin cooking.

    2. The GPT-4 Education Experience with Duolingo

    Recently, the well-known language-learning software Duolingo unveiled a brand-new learning feature driven by GPT-4. Users of Duolingo Max can learn from their mistakes and hone their conversational abilities by using the app's generative AI-powered capabilities.

    3. Netflix's Application in Machine Learning

    It is commonly known that Netflix uses machine learning to create customized suggestions for its users. In more recent times, the streaming service has also been using machine learning to improve its services in accordance with the factors that contribute to successful content.

    Benefits of AI in Customer Service

    By assisting with sales questions, supporting insurance firms with risk assessment, and helping businesses with a wide range of administrative activities, AI is transforming the customer experience. Let us look at the benefits of AI for customer service.

    A. Benefits for the customer

    Artificial intelligence plays a pivotal role in revolutionizing the customer experience by working closely with big data and behavioral psychology. Here are four primary benefits AI offers to your customers:

    • Convenience: Convenience rules the world of customer service. Customers are increasingly looking for quick, easy answers to their questions and issues. Companies using AI for customer service as a potent tool not only boost customer satisfaction but also optimize operational efficiency.
    • AI can anticipate client demands rather than wait for them to contact you with problems or questions. For instance, chatbots can track user interactions and behavior, forecast typical problems, and provide solutions before users even realize they require help.
    • Specific Offers: How AI may be utilized to change consumer behavior is among the most intriguing features of the technology. When behavioral psychology and big data are integrated, artificial intelligence (AI) may effectively target consumers and influence their purchase decisions. Through the integration of psychological profiles with demographic data about prospective consumers, marketers are able to create customized messaging that inspires and influences people to act.
    • Greater engagement: Once a customer has been won over, every effort must be made to keep him interested in the brand. Running entertaining social media contests, providing clients with engaging video content, or keeping them engaged throughout a customer experience are all examples of deeper engagement. Companies are seeing a transformation in the customer experience as a result of AI through personalization, greater engagement, and proactive support.
    • Personalized Service: AI-powered recommendation engines go beyond suggesting products based on past purchases. They factor in the customer's behavior, preferences, and even real-time interactions to recommend precisely what the customer is most likely to be interested in. By applying AI for personalized service, businesses can enhance customer satisfaction, loyalty, and lifetime value.

    B. Benefits for the company's customer support

    Implementing AI in a company's customer support offers several benefits that enhance the customer service experience. Let us look at them in detail:

    • Without adding more workers, customer care teams can manage more tickets thanks to chatbots, intelligent assessment, and workflow automation. AI works in conjunction with the agent to boost output and efficiency while decreasing costs.
    • With AI, you can provide immediate help without requiring an agent and with consistency. If a client handoff is required, AI provides the agent with insights and suggested actions for quicker responses while also providing crucial information and customer context.
    • AI lessens agent burnout by handling laborious tasks, which lightens the pressure on support teams. Agents' work is more satisfying when they can concentrate on activities that fit their skill set.
    • The next big thing in customer service is artificial intelligence (AI), which has the potential to address a common issue for businesses: the overwhelming amount of data. The customer service industry is being revolutionized by augmented intelligence technology, which will make it more effective, efficient, and profitable.

    How to Get Started with AI For Customer Service

    To ensure a seamless integration of AI technologies into your customer support operations, there are a number of procedures to take before implementing AI for customer care. Here is a detailed guide:

    Step 1: Define Your Goals

    The exact business results you want to achieve must be identified if you want to use AI to its full potential for your support operations. Spend some time creating a clear plan that supports the objectives of your company. Secure quick victories that confirm your presumptions to validate the technology. Think carefully about how you can create and preserve the knowledge required for an AI solution to successfully automate issue resolution. Engage your support staff in the process since they have great knowledge of client problems and can help to improve the plan. Even when cost efficiency is a factor, emphasize the advantages of an AI-driven future to win over your audience.

    Step 2: Select the Correct Technology Stack

    There are many opportunities for integrating AI in customer service as the field of artificial intelligence continues to grow. Prioritize, however, strategies that strike a balance between encouraging innovation and offering necessary checks and protections. In order to guarantee seamless interoperability with your current technological stack, look for robust integration possibilities. To create a fully working customer service ecosystem, keep future integration in mind even if you start with a solo AI solution.

    Step 3: Use Quick Wins to validate

    AI experimentation is becoming more and more accessible. If you have the right information, you can deploy sophisticated dynamic AI systems in a matter of minutes. Start keeping track of your achievements to determine which strategies are effective and adjust your plan as necessary. You are now able to explore and take advantage of new opportunities given how simple it is to score early wins.

    Step 4: Manage Information for AI Empowerment

    The knowledge base for AI-driven issue resolution must be built and managed effectively. Include a wide range of customer resources in your support center. Think about including additional openly accessible data sources that an AI solution can use. Put accuracy and quality control first to give the AI system access to the most accurate data about your goods or services. Keep in mind that, despite its intelligence, AI can only succeed when equipped with the best knowledge possible.

    Wrapping up

    The customer service sector is leading a revolutionary era that is being driven by AI developments. Customer service executives may begin on a journey that not only improves the customer experience but also promotes business growth, increases their influence, and empowers their team members by adhering to these four crucial stages. Embrace AI's potential, integrate it into your technological system, evaluate its effectiveness, and build a solid knowledge base. The moment has arrived to realize the incredible prospects that AI for customer service offers and enthusiastically embrace the future of customer service.

    Frequently Asked Questions (FAQs)

    1What is an example of AI for customer service?

    Customer care chatbots are one of the most often used applications of AI in customer support. Chatbots are used by businesses for a variety of purposes, with automating customer service interactions coming in first.

    2Can AI replace customer service?

    Absolutely not!  Experts believe that robots won't ever take the place of people in customer service. Simply put, robots and people have different skills, so savvy firms won't try to replace one with the other instead of figuring out how to use them together to win.

    3What is the role of AI in the customer journey?

    AI plays a crucial role in improving client experiences by making them more individualized, effective, and sympathetic. Businesses all around the world have grown to rely heavily on AI's ability to analyze massive volumes of data, comprehend customer behavior and preferences, and forecast future trends.

    4What is the disadvantage of AI in customer service?

    A chatbot can replicate human speech rather well. While an AI-driven chatbot can undoubtedly replace (and even outperform) a human employee in terms of productivity and resolving customer issues, if the software has not been developed to a high degree, it may not be able to mimic the human touch. Customers demand personalization, but they also do not want to feel as though they are speaking to a machine.


    Ashish Gulati

    Data Science Expert

    Ashish is a techology consultant with 13+ years of experience and specializes in Data Science, the Python ecosystem and Django, DevOps and automation. He specializes in the design and delivery of key, impactful programs.

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