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The Impact of AI on Customer Experience

BY -

Phil Strazzulla

January 11, 2021

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Artificial intelligence (AI) has transformed how companies do business and proven to be worth the investment. Companies are increasingly finding more use cases to leverage AI in their business strategies, including those for customer experience management. A 2019 Gartner study revealed that the number of enterprises implementing AI grew by 270% since 2015, with even more companies adopting it today. 

These companies have already seen quantifiable improvements in customer experience, including an increase in customer lifetime value, and reduced churn rates. You too can improve customer experience with AI-powered tools and here are a few ways how: 

24/7 Instantaneous Customer Support With Chatbots and Virtual Assistants


An AI chatbot chatting with customer
(Source)


When it comes to customer service, the ro(bots) have really taken over. An MIT Technology Review Insights study surveyed 1,004 business leaders from different countries and found that customer service is the leading area of AI implementation in companies today compared to other departments. Another study by Servion Global Solutions has estimated that by 2025, as many as 95% of all customer interactions will be supported by AI solutions.

Many companies today have automated their customer support operations with Chatbots, which are AI-powered virtual tools that simulate human interactions with customers. Chatbots help businesses increase productivity and customer satisfaction by facilitating self-service. According to a Harvard Business Review study, as many as 81% of customers prefer self-service options due to the convenience of finding the answers they need online at any time, without needing to contact customer service reps during business hours.

Another AI-powered technology that has changed customer experience is virtual assistants. We are already familiar with a few virtual assistants developed by the world’s biggest tech companies, including Google Assistant, Siri by Apple, Alexa by Amazon, and Cortana by Microsoft.  

To provide speedy support, businesses integrate virtual assistants with their apps and webpages to interact with customers, answer questions, and complete tasks. Virtual assistants can also help businesses achieve higher profitability by identifying and acting on cross-selling and up-selling opportunities.

Predictive Personalization of Customer Experience


AI helping to personalize customer experience
(Source)


With the help of AI and machine learning algorithms, it is easy to anticipate individual customer needs and generate recommendations based on their previous behavior patterns. We are already experiencing this our everyday lives: 

  • Online shopping: Predictive analytics allow businesses to assess the inventory of each shopper, suggest the right items they’re low on, and deliver them to their homes. Amazon is one of the leading online shopping platforms that have successfully implemented AI to make their customers’ shopping experience more personalized. 
  • Social Media and Streaming Services: Everyone at this point is familiar with how social media and streaming services are providing users with personalized experiences. Instagram and twitter suggest content based on the user’s likes and viewing history, Netflix and Hulu recommend TV shows and movies based on the user’s most-watched genres, and Spotify suggests music as well concerts and performances based on the user’s streaming history. 
  • Self-driving and parking cars: Autonomous vehicles use deep learning, a subset of machine learning, to sense and navigate the environment around them. They also take into account the user’s most common routes and configuration preferences to optimize daily commutes and trips. This innovative technology is already in use today in cars made by Toyota, Volvo, Audi, Mercedes-Benz, and Tesla.

Real-Time Analytics for Continuous Optimization of CX Strategy 


Analyzing AI metrics to optimize CX strategy
(Source)


Traditional analytics methods simply don’t cut it when working with big data. With the help of AI-enabled customer journey analytics, businesses can collate and organize large amounts of customer data left behind at different touchpoints. This data is then automatically analyzed with accurate speech/text analytics and natural language processing (NPL) tools to uncover sentiment, gain a better understanding of customers’ likes and dislikes, curate the right messaging, and convey it at the right time. 

Businesses also benefit from AI-powered anomaly detection techniques that allow them to stay ahead of the customer, identify risk areas that they can focus their marketing efforts on and make the most out of their resources. 

​Final Thoughts

As industries increasingly get more competitive, businesses have to keep up with the latest trends and innovations to optimize their operations and stay ahead. The possibilities are endless with what AI and machine learning technologies can do for a business and it’s only going to get better from here.

There are several customer experience management solutions that pack powerful AI and machine learning tools to deliver exceptional experiences, drive revenue growth, and decrease operational costs. If you are in the market for one, check out our detailed review of the best customer experience management solutions, both web-based (SaaS) and on-premise to make the right decision.

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