January 11, 2021

The Role of Artificial Intelligence in Customer Experience

Business success is no longer reliant on how good your product or service is—a seamless and satisfying experience is a must. And if customer experience is the new battleground for brand differentiation, then artificial intelligence (AI) will be the most powerful weapon in your arsenal.

Put simply, AI leverages machines and computers to mimic the planning and problem-solving capabilities of human beings.

The relationship between artificial intelligence and customer experience has made it possible for consumers to do everything from ordering goods, to booking car rides, to getting answers to their most pressing questions.

While AI technology can help us automate simple tasks, when applied in combination with data and analytics, it can also help us better understand and engage with customers and improve the journey across all touchpoints.

Artificial Intelligence and Customer Experience

Investing in sophisticated technology enables brands to gain a much more accurate understanding of their customer base.

According to Microsoft, “By 2025, as many as 95 percent of all customer interactions will be through channels supported by artificial intelligence (AI) technology.”

Let’s dive deeper into how AI has been tremendously advantageous in making the customer experience better.

Deeper Understanding of Customers

A comprehensive understanding of customers is the first step toward delivering an excellent customer experience, and leveraging AI can help accelerate this knowledge.

AI allows organizations to develop predictive models to better understand what drives customer behavior, reveal their needs and pain points, and offer products/services they can’t find elsewhere.

Real-Time Decision-Making

No matter your industry or niche, you must be in a position to make quick and effective business decisions. Using AI, organizations will be able to quickly identify and act on insights, improve their CX in real-time, and respond to changing needs as they arise.

The merging of customer experience and artificial intelligence can also help prevent fraud and risks and ensure an interruption-free journey.

Prescriptive Insights

Most insights aren’t truly actionable on their own. Traditionally, data needs to be interpreted to help decipher what it means—and determine what to do next. But with AI, you can analyze large unstructured data samples in a fraction of the time it used to take. From there, you can focus on delivering predictive and prescriptive insights.

In other words, this analysis is not just telling you what has already happened; it’s predicting what’s coming next—so support, sales, and customer service teams can save time and get ahead.

Faster Service

The biggest advantage that AI has offered to CX is to make it faster, easier, and more interactive. According to a 2020 MIT Technology Review survey of over 1,000 business leaders from across the country, customer service via chatbots is the leading application of AI being deployed today.

AI-enabled intelligent interactions like chatbots not only pave the way for personalized assistance, but also have the ability to make the entire customer experience more convenient and consistent.

With the rapid evolution of AI’s capabilities in answering simple questions and understanding nuanced conversations, customers can avoid wasting time in reaching out to customer service representatives.

Ability to Reach Customers on Multiple Channels

Before making a purchase, customers learn about new products and services from places like social media, company websites, reviews, etc. In fact, studies show that customers interact at least 7 times with brands across several digital touchpoints prior to completing a purchase.

That’s why an omnichannel approach is so critical. It allows customers to begin their experience with the brand on one channel and seamlessly continue on to the next while maintaining brand consistency and without sacrificing quality.

And according to Aberdeen Group, businesses that provide consistent service quality across multiple channels retain nearly 90% of their customers, compared to 33% retention rate for companies that do not.

Automated Deployments and Testing

Success in the digital age often depends on how well organizations can keep their systems up-to-date. This puts pressure on IT teams to be agile enough to accommodate changes in business requirements.

Luckily, automated testing makes deployment much easier. Not to mention continuous testing also helps improve product quality and allows teams to pinpoint and fix problems faster, ensuring that fewer products slip through the cracks in the first place.

Artificial Intelligence Drives Customer Experience—With a Strong Data Foundation

While this may sound harsh, it is the truth: If you have bad or incomplete data, your AI tools are worthless.

Data is one of the most valuable resources a business can have, but making decisions based on inaccurate information can result in issues like poor targeting and personalization, irrelevant messaging, and even nonexistent email delivery.

And adding AI into the mix will amplify these bad processes, making it harder to correct past mistakes. What’s more, it also wastes a ton of time and resources, potentially causing serious damage to your brand.

This doesn’t mean you should write off AI entirely. You just need high-quality, accurate data that you can rely on to make big business decisions

With the right data, AI-powered predictive analytics has the ability to transform today’s complex supply chain, resulting in lower costs, faster shipping, and better inventory management.

For example, Amazon uses predictive analytics for a unique fulfillment process known as “anticipatory shipping.” Here, AI helps determine which products customers are likely to order. In anticipation, Amazon will send those predicted items to a specific shipping hub to fulfill customer orders much faster.

Regardless of your business model, ensuring that you’re working with accurate, high-quality data involves three key steps.

  • First, the data must be translated into a common lexicon that everyone in your organization understands and uses.
  • Second, all of your personally identifiable information (PII), including name, social security number, date and place of birth, or biometric records, must be uniform.
  • And lastly, you’ll need to use a series of advanced algorithms to standardize all records across all data sources to provide total visibility into the customer experience.

AI Does Not Replace Humans

In addition to starting from a strong data foundation, you can’t expect AI to improve the customer experience if you don’t understand the fundamental strengths that humans and machines each bring to the table.

It’s critical to maintain a human connection and AI tools allow you to maintain a close connection to customers at speed and scale.

That said, data can’t be trusted to make good decisions, infer meaning, or provide the empathy great customer support requires. AI is only as good as the humans it works with.

More broadly, AI goes beyond analytical data. It can help improve the CX as it relates directly to the customers. Cars, e.g., are able to identify whether or not the driver is tired or under the influence based on previous and statistical driving behaviors.

Final Thoughts

Today, artificial intelligence and customer experience go hand-in-hand.

In fact, AI is the key to not just effectively harnessing customer information and gaining their trust but remaining competitive in a crowded marketplace.

Having an AI-powered strategy in place will ensure shorter customer wait times, streamline customer interactions, and enhance customer engagement.

3Pillar Global builds custom software products with a laser focus on customer outcomes. We can help you create value, boost revenue, and grow an army of customers that will stick around for the long haul. To learn more about our services, contact an expert today.

Special thanks to these members of FORCE, 3Pillar’s expert network, for their contributions to this article.

FORCE is 3Pillar Global’s Thought Leadership Team comprised of technologists and industry experts offering their knowledge on important trends and topics in digital product development.

Customer Experience (CX)
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