How to Improve Customer Experiences with AI & Chatbots

AI & chatbot technology

Companies today often grapple with delivering a standout customer experience. For many, the solution lies with artificial intelligence and the ability of AI to run chatbots. Focusing on AI as a way to boost customer experience can help brands not only deliver on promises but also stand out from the competition.

The idea of AI and chatbots transforming the customer experience (CX) has been around for a while, but recent advances in machine learning offer opportunities for companies to glean new data and insights about their customers and thus level up the customer experience.

The basics of AI and CX

AI technology can help create outstanding CX. It’s worth getting beyond the buzzwords to understand how incorporating artificial intelligence can support better customer experiences.

Customer experience matters more than ever

Customer experience takes a holistic view of how customers engage with a business during their buying journey. It’s the total of every touchpoint and interaction a customer has with a company, from visiting its website and in-store experiences to post-purchase and customer support. It’s a wide-ranging term meant to encompass both customers’ actions and how they feel about a business.

Trying to measure consumer feelings can be difficult. However, getting a handle on how customers feel during their interactions with a company is vital. Research shows that if a customer has a bad experience with a brand, they will generally leave. Nearly one-third say they will find another brand after one bad experience, and 74 percent of customers are likely to buy based on customer experience alone.

Customer loyalty is no longer solely about a company’s name or products. Today, it includes customer experience, especially personalization and automated services. Over 70 percent of customers want personalized interactions from the brands they use, and 76 percent get frustrated when that doesn’t happen.

In addition, automation and speed play critical roles in the customer experience, especially for younger generations. One study found that Gen Z customers will happily turn to AI-powered tools to get information and help — as long as it’s immediate.

The future is AI

Artificial intelligence makes it possible for machines and systems to learn and perform tasks and automations like humans. Using sophisticated algorithms and machine learning, systems and devices can improve and learn through repetition. AI can quickly scan through incredible amounts of data, learn to respond to behavioral cues, identify patterns, and pick up irregularities. Plus, unlike a conventional worker, AI-based systems and tools don’t need a break, which can allow these systems to run continuously.

People use AI every day. Asking Siri for directions, getting a movie suggestion from Netflix, and having a robo-advisor help pick one’s investments all require AI. AI matters for business because it can enable formerly manual tasks to be performed quickly and reliably at scale. It doesn’t remove humans from the equation. Rather, it supports process automation, which can handle many conventional customer service and support issues, allowing humans to tackle more extensive tasks.

Financial services firm PwC predicts AI will transform the productivity and GDP potential of the global economy, contributing nearly $16 trillion to the global economy by 2030. PwC also suggests AI will help drive increased personalization over time. Clearly, AI is a critical tool for brands to use, and companies are getting the message. A survey of CIOs found that nearly half of them already deployed or plan to deploy AI and machine learning technologies within the next 12 months.

How AI can enhance customer experiences

The increasing importance of customer experience puts more pressure on brands to get it right. Unfortunately, that means they’re also one misstep away from a customer deciding to move on. Businesses need to develop a strategy that keeps customers’ experiences and their wants at the forefront. The good news is that technology can help.

AI and chatbots transforming the customer experience is nothing new. The first chatbot was created in 1966 by scientists at MIT. Named ELIZA, it would pick up on keywords in a chat and ask open-ended questions to mimic human conversations. Although chatbots are far more sophisticated today, the scientists then hit on something key about AI and CX: Friendly engagement. Advances in machine learning have made chatbots more able to respond in a way that demonstrates they understand the consumer’s needs, and are less like automated assistants.

Research suggests around 40 percent of requests to chatbots are emotional, not informative. When so much of the consumer experience hinges on how customers feel when interacting with brands, seemingly minor changes can have an outsized impact. AI can assist current customer engagement strategies in several key ways.

  • Data-driven insights: Because AI tools can analyze customer data so quickly, those insights can be used to generate more personal interactions through content, recommended products and services, and customer support interactions.
  • Streamlined workflows: AI-powered chatbots can be the first line of support for potential issues at designated touchpoints. Having customers’ basic requests covered — and not clogging up current workflows — gives teams more time to focus on more complex tasks.
  • Predictive behavior: Between psychographics, location, and other buying data, AI tools can identify patterns in customer behavior and thus predict what they may do next. This allows companies to tailor the messaging, products, and services that customers see to their demonstrated needs and interests.

If the goal is to streamline workflows so that team members can deliver personalized interactions to their customers, AI can make that possible. In this way, the deployment of AI tools like chatbots can help improve business sales and drive growth. For example, research from Intercom found that chatbots increased sales by 67 percent, sped up customer support response threefold, and improved customer support satisfaction by 24 percent.

AI in the wild

While chatbots and other similar tools are often seen in eCommerce contexts, many B2B companies are utilizing AI to help boost CX as well. Here are two examples:

  • Printer giant Epson worked with Conversica to develop an AI-powered automated email assistant, which created human-sounding emails to follow up with enterprise leads. The emails led to a response rate of 51 percent, a 240 percent increase from Epson’s previous baseline, and a 75 percent increase in qualified leads.
  • Technology vendor ServiceMax utilized AI to provide a more personalized journey for website visitors, helping them move down the sales funnel and become leads. The organization used Demandbase’s Site Optimization solution to tap into customer behavioral data and predict the next page they would visit. ServiceMax was able to reduce page bounce rate by 70 percent and improve both time-on-site and pages-per-session by 100 percent.

Getting started with AI and CX

Improving customer experiences can help increase customer satisfaction and retention, which can positively impact a company’s bottom line. As customer experience becomes more of a competitive advantage for brands, firms must start building a strategy around CX. Here are some ways AI can help.

Put the customer first

Research shows that customer-centric companies have seen a 60 percent boost in profit compared to companies that don’t put the customer first. In a CX-focused world, customers have to be at the forefront of every strategy. AI tools can help businesses connect with their customers throughout their buying journeys. AI can also provide insights into customer analytics, predicting user interactions so firms can develop engagement strategies for specific touchpoints along the way.

Focus on personalization

Today’s customers want to feel like they are getting an individualized experience from brands. AI tools and technology can help companies sort through data and develop real-time customer insights. That information can enable companies to deploy their marketing teams more effectively and spend their dollars more efficiently.

Boston Consulting Group found that companies who master personalization see growth between 6 percent and 10 percent. That sort of lift can dramatically improve revenue, and it helps customers stick around because they’re getting the benefit of personalized marketing.

Boost customer support

A firm’s relationship with its customers goes far beyond a completed transaction. Customer support teams play an increasingly critical role in ensuring customer experience is up to snuff. Here’s where AI and CX can come together in the form of chatbots and streamlined workflows. Many businesses lose customers due to long wait times for support. Chatbots can answer upward of 75 percent of customer FAQs, dramatically reducing waiting time while offering 24/7 support.

How low-code development can help

Low-code can help businesses deliver on their customer-focused strategy by enabling them to create and deploy apps and tools quickly to meet customers’ needs. With low-code, firms don’t have to spend months testing and iterating ideas with their IT team. Instead, professional and citizen developers can create hyper-personalized tools with ease to help brands stand out.