2 August 2024
AI in customer experience (CX) involves applying artificial intelligence (AI) technology to all components of a customer journey within a company.
Customer experience has become a valuable use case for AI-powered technologies as customers continue to expect more from businesses. AI technology deployed with this approach can include machine learning, natural language processing (NLP) Robotic Process Automation, predictive analytics and more. Incorporating AI is a major component of any modern digital transformation journey.
AI enhances customer interactions by analyzing and sorting through vast amounts of customer data. The data analysis results in a highly personalized customer experience that addresses customer needs at all touchpoints and ramps up operational efficiency.
The capacity for data and in-depth analysis is what sets AI customer experience apart from other approaches. Its ability to detect patterns, review purchase history and monitor social media behavior enables businesses to tailor customer preferences and interactions, increasing customer satisfaction at the onset.
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Customers today have high expectations for companies to provide an end-to-end experience. Companies need to figure out how to meet those customers’ needs. Business leaders should consider a strategy that keeps them ahead of the curve on implementing new technology and keeping consumers happy.
With AI tools, companies can take large amounts of data and analyze customer behavior and customer engagement. Separately, AI solutions and generative AI tools can build AI-powered chatbots to manage customer support and provide virtual assistants to customers.
AI tech deployment can be risky, but it can have high rewards if implemented well. This includes listening, testing and then capitalizing on the innovation. By implementing AI, a business can capitalize on customer feedback and user experience to personalize interactions with customers and gain trust and reliability.
There are several key benefits to AI-powered customer experience systems:
One of the key benefits of AI tools is its use of machine learning algorithms to gain valuable insights into a customer’s behavior. The technology allows the company to track a customer’s interests and preferences to then tailor recommendations. This personalized approach can increase customer loyalty and sales conversions.
AI-powered chatbots are increasing in popularity as the technology improves. AI routing can now predict why a particular customer is reaching out for help. The chatbots use conversational AI to act as the contact center for customers seeking quick answers to queries and ways to resolve simple issues at any time of day.
One of the benefits of AI is its ability to integrate data from multiple sources, including online, in-store, mobile and social media. This gives customers the option to switch between channels at their leisure without interruption and is more likely to keep them engaged with the business.
Customers provide feedback in many different ways and through many different channels. AI can analyze the text from this feedback and determine the sentiment through sentiment analysis. This action can help a business understand its customers on a deeper level and really understand how a customer is feeling about a product.
Customers today expect real-time action, and with AI a business can modify the customer journey on the spot. AI tools can adjust a website’s content to highlight products that are more aligned with what a customer is searching for at that moment.
Adding AI into customer experience can improve customer relationship management (CRM) systems. An AI-powered CRM can automate tasks, such as data entry and lead scoring, and help sales reps predict which leads are likely to convert. This can help sales teams improve their decision-making process.
Implementing AI into the customer experience area of the business is exciting, but it also produces several challenges.
Fewer human interactions: While AI is an efficient and revolutionary technology, it can lack the human touch that customers might be seeking. A customer likely still expects some level of human engagement and empathy. Overusing AI might result in customers feeling disconnected.
More complex system integrations: Bringing an AI-powered system into an existing customer service system can be challenging and complex. The integration needs to be aligned perfectly so that the customer experience isn’t impacted negatively.
Lack of customer trust: AI systems are exciting, but building customer trust remains a sticking point. Some customers are skeptical about AI-powered interactions and the accuracy of the solutions.
Major businesses have started to harness the power of AI in customer experience and are starting to see its ROI. Below are some examples of how AI in customer experience is changing the way businesses interact with their customers and changing business models to be more aligned to meet consumer needs.
Wimbledon's AI-powered solutions
Wimbledon, one of the best-known tennis tournaments in the world, partnered with IBM Consulting® to create AI-generated insights and world-class digital experiences.
The enterprise-ready generative AI solution delivers prematch summaries and postmatch analysis. Separately, using a model trained and tuned in IBM® watsonx.ai™, the generative AI application extracts and summarizes relevant data and generates stories in natural language.
Starbucks' predictive analytics
Starbucks uses AI to “amplify the human connection.”1 Through its Deep Brew initiative, Starbucks built a set of AI tools to elevate the coffee business and in-store customer experience.
The tool uses machine learning and predictive analytics to personalize marketing messaging, which drives retention and improves workflows. The tool is used on its mobile app to suggest menu items based on a customer’s order history and location, among other factors.
Boots UK's digital transformation
The health and beauty retailer and pharmacy chain needed an infrastructure upgrade to meet the evolving needs of the e-commerce world. Boots worked with IBM to transfer the legacy programs over to IBM Cloud® and worked together by using Red Hat® OpenShift® on the IBM Cloud container platform to build, replicate and test the digital environment.
The modernized infrastructure allowed Boots to handle large sales events, such as Black Friday, and major product launches with ease. In addition, the transformation improved the site’s search function and personalized features to showcase products.
Amazon's recommendation system
Amazon’s AI system has revolutionized e-commerce shopping by making personalized product recommendations to customers. The data-driven system analyzes customer behavior, purchase history, cart history and more to understand their demographics and understand what other customers might be buying.
Amazon uses NLP to extract information on customer reviews and product descriptions.2 Separately, the company uses machine learning and deep learning algorithms to manage its recommendation system. It trains the models on historical data and provides consumers with accurate product predictions through an omnichannel approach.
AI is likely to play a bigger role in customer experience as more advancements arise. Here are some of the predictions for the rest of the year and beyond.
Advancements in other related technologies, such as augmented reality (AR) and virtual reality (VR), will likely come more to the forefront. For example, a customer can create a digital version of themselves to try on clothes in a VR environment before making a purchase. This type of advancement might transform the way a customer interacts and connects with a business.
The current role of AI is to make processes faster and more efficient, but as time goes on it will likely take a more autonomous role in managing CX. The integration of AI in the future looks to become part of the business ecosystem itself, including self-service tools, which will also likely become more prevalent.
Conversation intelligence is likely to gain in popularity down the road as a business’ online and phone channels remain fixtures of the CX journey. With the right tools in place, conversation intelligence gives businesses deeper insight into customer engagement and enhances the employee experience.
Advancements in technology have been astounding, especially in relation to AI-powered tools. But, with these new technologies come more risk and a need to focus on AI ethics and transparency. Customers want to know how a business is using its data, especially for AI processes. Customer trust is key as AI continues to enhance the customer experience.
Footnotes
1 How Does the Amazon Recommendation System Work?, Baeldung, 18 March 2024
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