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Top Trends for AI in Customer Service
Written by: Sean McAlindin
Sean McAlindin, a business and arts writer, has a decade-long experience in music and culture journalism and recently ventured into business writing.
Edited by: Sallie Middlebrook
Sallie, holding a Ph.D. from Walden University, is an experienced writing coach and editor with a background in marketing. She has served roles in corporate communications and taught at institutions like the University of Florida.
Updated on October 30, 2023
Top Trends for AI in Customer Service
We’ve all seen the headlines. AI is coming for us – whether we like it or not.
While sensationalist writers would have you believe that automated, intelligent beings are going to take all our jobs and bring about the impending economic apocalypse by next week, that simply isn’t the truth.
It’s valid that advancements in artificial intelligence need to be approached with caution – but safe, effective AI is now being used in many aspects of business, especially customer service. As anyone who works in customer service will tell you, current developments in AI are already complementing their workflows and making their jobs easier and more productive in many ways.
In this comprehensive guide, we will look at the top trends in AI in 2023 and discuss their potential benefits to your business. We’ll also look at some successful examples of AI in customer service and explore where this technology may go from here.
Using advanced machine learning algorithms, artificial intelligence is able to personalize interactions, handle routine questions and tasks, organize and draft emails, and streamline many aspects of customer service.
Next-generation analytics are providing businesses with real-time insights that promote data-driven decision-making to stay ahead of market trends and anticipate future customer service issues.
AI paired with virtual reality and natural language processing is providing consumers with ever-evolving options for finding and learning about new products and services.
As time goes on, AI will be used to guide consumers through all aspects of their buying journey with unprecedented levels of personalization and insight.
Commons Uses For AI In Customer Service
AI is now transforming business operations in customer service across the board. While advancements will continue to be made over the coming years, here are some of the most common and practical cases uses for AI in customer service today.
1. Personalized, automated service
AI has revolutionized the way businesses interact with their customers by creating increasingly personalized customer service experiences on all levels. Through advanced software engineering algorithms, AI can analyze vast amounts of customer data to understand individual preferences, behaviors, and needs. This valuable information allows businesses to tailor their customer service interactions to meet the specific requirements of each client.
AI-powered chatbots and virtual assistants are at the forefront of creating personalized customer service experiences. These intelligent systems engage in natural conversations, understand customer inquiries and feelings, and provide accurate and timely responses with a level of insight beyond human capability. By analyzing customer data in real time, AI can offer personalized product recommendations, answer frequently asked questions, and resolve common issues without intervention from a customer service representative.
Furthermore, AI can actually predict customer needs by reviewing historical data and buying patterns, allowing it to suggest cross-selling opportunities, anticipate potential problems before they occur, and proactively offer solutions.
AI algorithms can also assess current customer opinions through sentiment analysis – identifying any negative experiences that could be hinted at by social media interactions, online correspondence, and browsing history – and directing customer service reps to take action. In these ways, AI can significantly improve customer satisfaction while reducing the operational costs associated with customer support.
2. Smart email
Another popular way to use AI in customer service is with smart email. These AI-powered extensions utilize natural language processing (NLP) to automate and enhance email-based customer interactions.
NLP is a type of machine learning that enables computers to interpret, understand, and respond to human language. With NLP-powered smart email, businesses can provide timely, personalized, and efficient responses to customer inquiries.
Smart email systems read incoming emails to understand the content and context of the messages. This technology accurately interprets customer intent, extracts relevant information, and identifies key issues or requests. It categorizes emails and routes them to the appropriate departments or individuals, helping to reduce response times and ensure that customer inquiries are handled promptly.
Smart email systems possess the capacity to draft email responses based on what needs to happen next to best assist the customer. By reviewing customer data, order history, and previous interactions, these systems generate personalized and contextually relevant responses to each individual, addressing their specific needs and concerns.
In a clear example of their growing intelligence, AI systems are designed to learn from historical data, improving their accuracy and response quality over time. This level of insight and personalization enhances the customer experience, fosters a sense of being heard and understood, and, in time, can lead to the perception of a real relationship with the customer.
In addition to handling customer inquiries, smart email systems can also automate routine tasks such as order tracking, returns, and refunds. By integrating with backend systems, AI accesses relevant data and provides real-time updates to customers, minimizing manual effort and streamlining processes.
3. Intelligent chatbots
AI is now being used to improve chatbot communication with customers, something that’s been a turn off to many consumers since its creation. We’ve all had a frustrating conversation with a phone bot or chatbot, haven’t we? I can still recall many times I was left screaming into the phone, pleading to speak with a representative, as steam blew out of my ears.
Fortunately, the communication powers of these robots are only getting better. While they still have a long way to go, advances in natural language processing and deep machine learning are rapidly improving their ability to understand the nuances of language and comprehend the human voice. As AI becomes more widely adopted, these tools will continue to evolve at an exponential rate because they learn from their interactions and improve over time.
Essentially, intelligent chatbots are computer programs that use AI to simulate human conversation. They are used to answer customer inquiries, provide assistance, troubleshoot issues, make product recommendations, and even process orders, all without the need for human intervention. This eliminates long waiting times and reduces the workload on human customer service representatives, letting them focus on more complex issues that require a personal touch.
This technology has become increasingly popular in customer service and sales because it enables companies to provide immediate support to their customers without having to hire more staff. Additionally, intelligent chatbots can work around the clock, which means customers can receive help at any time of the day or night.
4. Next-generation analytics
On a process level, AI-powered chatbots provide instant responses to customer queries and complaints, regardless of the time of day, using intuitive analytics. However, the real power of analytics lies in the big-picture perspective it can provide on your overall business processes.
By analyzing customer feedback, social media activity and real-time sentiment, AI can identify areas of brand strength as well as customer dissatisfaction. AI-generated insights are used to segment customers groups, personalize customer interactions, recommend relevant products or services, and even plan future marketing campaigns.
With the help of advanced machine learning algorithms, AI can effectively analyze huge datasets to identify patterns, trends, and insights that lead to better customer service. The information gleaned from this behind-the-scenes work helps business leaders make well-informed, data-driven decisions and stay ahead of market trends.
5. Virtual reality
Virtual reality is another transformative technology that has the potential to revolutionize customer service in a big way, as AI and VR are now working together to create a more immersive and engaging customer service experience.
Virtual reality provides customers the opportunity to experience virtual environments, test-drive products, and visualize scenarios to help them make informed buying decisions. For example, AI-guided virtual reality systems are being designed to give customers the chance to test drive and sample products from the ease of their own homes. Just put on the goggles and next thing you know you’re previewing furniture in your home, sitting in a new car, or trying out makeup on your own skin.
By combining AI and VR, companies can take customer service to a whole new level, providing real-time, customized solutions that can improve customer interest, satisfaction, and loyalty. Plus, it’s just plain cool.
6. Improved voice recognition
AI is helping to improve voice recognition systems to interact seamlessly with a variety of human speech patterns. Smart speaker technology is constantly evolving, lending itself as a major boost to the world of e-commerce. Essentially, these voice-activated bots are virtual assistants that help customers find products online using voice search to make their shopping process easier.
55% of households are projected to own some sort of smart speaker device by 2023. (Invoca)
By eliminating the need for manual input and navigation, voice recognition AI streamlines the customer service process, saving time and enhancing convenience. It empowers customers to seek assistance, place orders, or resolve issues simply by using their voices.
Moreover, voice recognition AI systems can analyze speech patterns, tones, and sentiment, equipping them to provide personalized and empathetic responses. Ultimately, as the technology continues to improve, these AI helpers will aim to develop real, lasting relationships with the humans they serve.
7. Guided selling
With guided selling powered by AI, businesses can enhance sales performance by providing personalized recommendations and guidance to customers in real time. AI analyzes customer data, engagement patterns and behaviors, and uses the insights to identify the products your customers are more likely to buy. This is especially effective with longtime, loyal customers with a proven track record of buying from you.
AI assists a sales team in lead generation and qualification by identifying potential prospects to predict their likelihood to make a purchase. It can offer sales coaching, suggest upselling or cross-selling opportunities, and assist in achieving sales targets by setting manageable goals.
AI algorithms can provide accurate sales forecasts by analyzing historical sales data, market trends, and external factors, allowing businesses to optimize inventory and make informed decisions. At the end of the day, AI-powered guided selling helps businesses deliver a more personalized and engaging buying experience, while also improving overall sales performance.
Real-World Examples of AI-Powered Customer Service
To help you get an idea of how AI is being used on the cutting edge of the customer service industry, let’s take a look at some standout examples of AI-powered customer service from recent years.
1. Delta Air Lines – Facial recognition to streamline flight boarding
First unveiled in 2019, Delta Air Lines has partnered with the U.S. Customs and Border Protection and TSA to develop a first-of-its-kind biometrics boarding program. Available to customers traveling directly to an international destination out of certain U.S. airports, this curb-to-gate facial recognition technology offers flyers a streamlined experience through all stages of their travel.
According to third-party customer research on the concourse in Atlanta, 70% of customers found the curb-to-gate facial recognition experience appealing, and 72% reported that they prefer facial recognition to standard boarding. The program has been so successful, in fact, that Delta has expanded it to airports in other major cities, including New York, Los Angeles, and Boston.
2. Domino’s Pizza – A helpful chatbot
Domino’s “Dom” is a chatbot that goes beyond the call of duty. This voice-controlled pizza ordering assistant not only answers frequently asked questions, it also simplifies the ordering experience by memorizing customers’ previous orders.
Best of all, Dom monitors the status of each pizza as it’s being made and when it’s sent out for delivery, providing customers with real-time updates so that they’re never stuck wondering when their munchies will be appeased.
3. The Muse – Hyper-personalized emails for recruiting
The Muse, a popular employment and recruiting site amongst Millennials, took its marketing strategy to the next level by partnering with Blueshift, a marketing automation platform provider.
Together, the two companies use predictive analytics to create hyper-personalized email campaigns based on user actions and attributes. These complex, multi-triggered campaigns targeted different user interactions across multiple sections of The Muse’s site and across its catalogs, generating a 200% increase in visits to targeted pages.
4. Walgreens – A Covid pandemic bot coach
When the COVID-19 pandemic hit, the Walgreens Boots Alliance (WBA) — a major global pharmacy and healthcare retail provider — knew that it needed to find a way to be more responsive to customers’ needs. This led WBA to partner with Microsoft to develop and deploy AI-powered customer service chatbots across its websites, including Walgreens.com.
Although many of these bots are designed to answer common questions, help customers find the right products, and handle prescription-related matters, their real standout achievement was the COVID-19 risk assessment bot.
This bot employs a chat interface to help customers determine their risk of having COVID-19 based on CDC guidelines. It’s been used by thousands of Walgreens customers, lowering customers’ risk of COVID-19 exposure and reducing the strain on an already overburdened healthcare system.
The Future of AI in Customer Service
The coming years are sure to bring a whirlwind of innovations in AI for customer service. It will be exciting to see what advances and breakthroughs are in store as developers and service providers work to take advantage of the latest trends and technologies. Here are some of the developments we are most likely to see.
Future advancements in natural language processing will enable AI customer service agents to understand and respond to customer queries with even greater accuracy and contextual awareness. They will be able to comprehend complex questions, interpret nuances, and provide more personalized and human-like responses.
Emotion recognition and sentiment analysis will become more proficient at understanding customer emotions through voice tone, facial expressions, and text analysis. This will allow customer service AI to detect frustration, satisfaction, or other emotions and respond empathetically, adapting their tone and approach accordingly.
Enhanced voice assistants will become more sophisticated and natural in their interactions with customers. They will be able to handle complex requests, provide detailed product information, and assist with troubleshooting, all through voice commands.
With advancements in augmented reality technology, AI customer service agents could provide virtual visual assistance. Customers can use their smartphones or VR glasses to share live video feeds, allowing AI agents to guide customers through visual instructions, product demonstrations, or troubleshooting steps.
AI systems will leverage vast amounts of customer data to predict customer needs and behavior with even greater accuracy. This will enable proactive support, where AI agents anticipate and resolve issues before customers even reach out for assistance.
AI customer service agents will seamlessly integrate with the Internet of Things (IoT), enabling personalized support and automated troubleshooting. For example, an AI agent could detect issues with a connected device, initiate remote diagnostics, and guide customers through the repair process.
AI systems will become more proficient in handling diverse languages, dialects, and cultural nuances, leading to effective customer service across various regions and demographics. Real-time translation capabilities will bridge language barriers, facilitating global customer support for anyone from anywhere.
Most importantly, future AI customer service systems will have to prioritize ethical considerations, ensuring transparency, fairness, and accountability. They should be designed to respect user privacy, handle sensitive information securely, and address biases or discriminatory practices. Balancing technological advances with ethical practices that support and enhance the quality of customer service will be essential to maintaining broad support for these powerful, intelligent creations.
By embracing the latest advances in AI technology, customer service departments can gain a competitive edge in today’s dynamic business landscape. Over time, these tools will be increasingly utilized throughout all business types as they continue to improve their abilities and deepen their intelligence.
With AI-powered tools, companies can automate customer service interactions, reduce errors, and respond to customers’ requests more accurately and efficiently. Beyond that, AI provides in-depth analysis and insights into all aspects of your customer service program, effectively leading your team to improved performance.
Choosing to incorporate AI into your customer service structures can result in decreased operational costs, more productive agents, increased brand engagement, and more satisfied and loyal customers. This technology is opening doors to new frontiers in customer service that have yet to be fully explored. As AI continues to advance, it will be exciting to see what the future holds.
While AI can automate certain aspects of customer service, human representatives play a crucial role in handling complex or sensitive customer interactions that require higher levels of empathy and nuanced decision-making. At least in the near term, human customer services reps are still an integral part of any business organization. AI, however, can provide a powerful team member to support your overall customer service program.
AI systems prioritize customer data privacy and security by implementing robust encryption methods, access controls, and compliance with data protection regulations. Quality AI programs ensure that confidential customer information is safeguarded to maintain trust in your organization and your brand.
Yes, AI-powered natural language processing capabilities enable it to understand and respond to customers in various languages. While the technology is always improving, language translation models are working toward seamless communication across different linguistic backgrounds, accents, and regional dialects.
AI systems are equipped with sentiment analysis techniques that can detect customer emotions through text or voice cues. They then adapt their responses to provide empathetic support and appropriate solutions. These technologies are rapidly evolving to expand their understanding of the emotional realm of human experience.
AI programs undergo rigorous training and testing to detect and minimize bias. Data sets used for training are carefully curated to ensure understanding of the customers’ diverse needs and backgrounds, and avoid perpetuating discriminatory patterns, promoting fairness in customer interactions. This “diversity intelligence” is being built into the robots from the ground up.
AI leverages anonymized customer data and employs privacy-preserving techniques to ensure personalization while protecting sensitive information. It focuses on patterns and trends rather than individual identities to maintain privacy. AI protects sensitive personal information to the code of the most recent laws and regulations.
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