AI-Enabled Customer Service: What It Is and Why It Matters

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How can artificial intelligence make life better for human customers? Glad you asked. Actually, cold, unfeeling machines can make your customers feel all warm and fuzzy inside.

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Using AI, customer service reps can improve and scale their customer service efforts. But you should also be aware that AI is a reflection of how the customer service game is changing before our eyes.

How AI Is Coming to Customer Service Operations Near You

A recent McKinsey study identified marketing and sales as one of the top areas that AI will transform. And one big use case for AI will be in customer service, says the consultancy.

It makes sense. AI excels at processing vast amounts of data better and faster than humans. These systems can then extract insights that would take us people a ton of time to find -- or not find at all.

Your customer service operations today probably generate a lot of data. Audio calls. Text transcriptions of those calls. Text chats. Live chats. You name it. McKinsey sees this as rich material for AI systems to process. Done right, this can produce some profitable machine-enabled customer service outcomes.

"Improved speech recognition in call center management and call routing by applying AI techniques allow a more seamless experience for customers -- and more efficient processing," says McKinsey. And it doesn't stop there. Using AI called deep learning, customer service operations are getting more sophisticated.

"For example, deep learning analysis of audio allows systems to assess customers' emotional tone; if a customer is responding negatively to an automated system, the call can be rerouted to human operators and managers."

Emotion recognition is one area where AI can help. Another is personalization.

McKinsey notes that Netflix and Amazon use AI-powered recommendations to delight customers. The AI analyzes your consumption data, then recommends other things you want to watch or buy.

In this way, AI is pushing the boundaries of what customer service is. It's not just about customer satisfaction after the sale (though that's important). It's about creating incredible experiences and offers, time and time again. These experiences and offers are then highly personalized using the power of AI. The more personalized the offer, the better chance a customer walks away delighted. And the better chance your brand scores a sale.

That means AI can turn your actual sales process into a valuable customer service tool by giving consumers even more opportunities to spend money on what they already like.

Take the example of a travel company cited by McKinsey. The company used AI to "micro-segment" customers. Then, the company offered more personalized services, like hotels and plane tickets. The travel company used "product and customer data" to train the AI.

The result?

A 10-15% increase in revenue.

Do you think any of those customers were unhappy to get highly personalized travel deals? (When was the last time you were unhappy to go on vacation on the cheap?)

On one hand, AI can make your current customer service operations better, faster, and more effective at scale.

On the other, it can personalize your marketing content so well that it delights customers. Content becomes a vehicle for offering consumers the best offer for them at the best time.

The Changing Landscape of Customer Service in the Age of AI

Improved customer service and more powerful personalization are all well and good. But they also point to how customer service is changing thanks to AI.

Take the example of Amazon's Alexa chatbot, which shows us how AI is changing the customer service game. Alexa is essentially an always-on brand ambassador that blurs the lines between marketing, sales, and customer service.

Says Yext's Duane Forrester, a voice search expert: "A digital agent will be a game-changing moment in a customer's life, and each company knows they have a small opportunity to get it on the bullseye, and a large opportunity to miss the mark and drive consumers away from their platform. This means these products will be much more advanced than the digital assistants we now live with when introduced."

AI assistants and service tools present huge opportunities to get customer service right. But do them wrong, and you drive consumers into the arms of competing brands. This is all happening because consumer preferences are changing.

We're moving to a contextual world, where consumers search online for personally relevant results in real-time. Voice is ascendant, as consumers make more on-the-fly searches, decisions, and purchases. Online reviews generate tons of data that can tell us much about customers, if only we had the time and ability to analyze these reviews.

In a world of almost limitless data, AI is helping us leverage that data to improve our existing customer service operations. But AI is also being adopted to help brands cope with a fundamentally changed customer service landscape, where everyone expects one-to-one attention -- at scale.

One thing is clear in this brave new world, effective customer service is no longer a job humans can do alone.

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