The Future of AI in Customer Service [State of Service Data]

Artificial intelligence has transformed the customer service industry for the better.

You can shorten time-to-resolution and maximize customer delight through proactive support. Your customers will never have to struggle to find answers or troubleshoot problems.

All thanks to a strategic approach to using AI in customer service.

However, your customer service strategy has to keep pace with the continuous advancements in AI technology.

That’s why we surveyed more than 1000 service professionals in HubSpot Blog’s State of Service study and documented our ten predictions for the future of AI in customer service.

Let’s break them down.

10 Predictions for the Future of AI in Customer Service

Here’s a data-backed outlook on where AI technology is heading in the customer service industry.

1. Businesses will use AI chatbots more frequently.

One of the most apparent trends in AI-powered customer service is the increased adoption of chatbots.

Research by Grand View Research suggests that the global chatbot market size can reach over USD 27,297.2 million by 2030, registering a compound annual growth (CAGR) of 23.3% from 2023 to 2030.

Several factors are driving the growth of chatbots:

• According to HubSpot Blog research, 36% of surveyed customer service reps found that the most significant benefit of using AI tools was that the tech makes customer service available 24/7. Chatbots can handle customer inquiries anytime without outsourcing or hiring more employees to answer later-day inquiries.
• 30% also responded to the survey stating that AI tools help to reduce average handling time, such as gathering customer information before beginning a conversation with a representative.
• 91% of surveyed customer success leaders consider AI chatbots effective when delivering customer support. 19% plan to invest the most in AI chatbots in 2024, while 13% invest in an online chatbot with a customer support rep.

Chatbots are becoming increasingly sophisticated and can handle many customer inquiries, from simple questions about product specifications to more complex issues like returns and refunds. These diverse use cases mean businesses across various industries can build chatbots for customer service.

2. AI will offer more personalized customer experiences.

Advancements in AI technology will also take personalization to the next level. Respondents in our State of AI report showed resounding trust in AI's ability to offer more personalized messages (50%) and experiences (46%).

Our State of Service report also indicates that 85% of respondents use AI tools to personalize customer communications.

Here’s how.

AI tools can collect customer data, like purchase history, preferences, patterns, and feedback data, to personalize their experience.

These tools analyze insights from this data to create personalized product recommendations and customized customer service interactions to benefit them in the customer journey.

For example, HubSpot's AI tools can assist in drafting content, streamlining workflows, enhancing data analysis, and more. Service reps can benefit from this tool when responding to customers as it can generate messages based on the desired to.

Get started with HubSpot's AI tools for free.

3. AI will have more enhanced predictive capabilities.

Another trend we’re likely to see in AI-powered customer service is enhanced predictive capabilities.

AI tools can predict customer needs and behaviors with greater accuracy, which could improve customer experiences and increase customer satisfaction.

For example, your AI tools can determine when a customer will likely make a purchase based on their behavior and purchase history.

This information can trigger a customer service interaction based on unique needs and solutions, such as offering a discount or a personalized product recommendation at an optimal point of their journey.

Besides, our State of Service data concludes that 91% find AI tools effective for analyzing sentiments in customer service conversations. You can use sentiment analysis data to better train your support reps and share additional support with unsatisfied customers.

4. Companies will improve the quality of their customer service with AI.

AI tools play a pivotal role in enhancing customer service. 92% of CS leaders claim that AI has helped improve customer service response time. That’s just one way companies can deliver better support and keep clients happy.

Since AI chatbots are available around the clock, you can resolve user queries faster by effectively training your chatbots.

You can use advanced training methods to accurately understand a customer request and share the most relevant response. This setup will also reduce the support tickets coming to your team.

Besides improving response times, AI tools will also help companies scale their customer service operations.

For 86% of respondents, AI technology has already created a significant impact in scaling CS operations. You can use AI chatbots to:

• Handle high-volume queries and manage thousands of customers with automated messages.
• Create an integrated setup for your business operations by connecting chatbots with CRM.
• Minimize costs associated with hiring and managing a large workforce globally.
• Continuously improve the quality of responses over time through self-training.

Put simply, AI technology enables businesses to deliver meaningful support at scale without compromising the quality of their responses.

5. Investment in AI for customer service will increase.

If you thought AI was just a fad that would eventually peter out, here’s some bad news for you: AI technology is here to stay. And savvy businesses are gearing up to increase their investment in this tech.

71% of professionals surveyed in our State of Service report claimed they’ll increase their investment in AI chatbots for customer service. At the same time, 73% mentioned they’ll invest more in leveraging AI and automation to deliver a more seamless customer experience.

These numbers indicate a more significant trend: companies are willing to spend more to explore bigger possibilities of using AI in customer service.

6. AI will become a crucial growth lever for businesses.

AI will become a key factor in building an efficient customer service setup. That’s because the right AI tools can reduce dependencies and automate large parts of your support strategy.

That explains why 65% of respondents believe AI and automation offer the best ways to scale customer service operations to supplement business growth.

Here are a few ways companies can leverage AI to build seamless customer service operations:

• Integrate multiple channels in one place to level up omnichannel support.
• Offer multilingual support to expand business reach without hiring staff in different locations.
• Lean on predictive analytics to stay one step ahead of the customers and troubleshoot issues.
• Train new customer support representatives with real-time suggestions and feedback for improvement.

High-growth businesses will use AI to streamline their backend operations and maintain consistency in customer support.

7. AI will fulfill multiple use cases for the customer service industry.

While AI-powered chatbots are among the most popular use cases today, this technology will gradually support many moving parts in your customer success strategy.

Our State of Service data indicates these five use cases companies will prioritize when integrating AI into their CS setup:

• Writing responses to customer service requests (43%).
• Collecting and analyzing feedback from customers (42%).
• Creating chatbots that respond to customer service requests (41%).
• Building self-service tools to help customers find answers independently (39%).
• Offering proactive customer support by addressing issues before they arise (38%).

As the technology evolves, companies can adopt AI across various functions to maximize customer support efficiency.

8. Humans will lean more on AI for delivering customer support.

AI-powered support doesn’t necessarily mean chatbots handling most of your customer requests. AI tools can help customer support teams move with speed and precision.

For example, 54% of respondents depend on humans assisted by AI to resolve complex service tickets. With the right AI tools, you can empower your support reps to respond quickly and accurately.

At the same time, companies want their agents to leverage AI to analyze customer feedback about their service experience. 51% of leads want to combine human expertise with the power of AI to collect critical insights from customer feedback and make strategic decisions.

CS leaders will also leverage AI to support employee training initiatives. AI tools can simulate customer conversations and come in handy when training new customer service reps.

9. AI will make self-service customer support more seamless.

Most people don’t have the time to speak to a customer support agent or write a long email explaining their concerns. They want hassle-free solutions that they can implement on their own. This is another crucial area where AI will prove to be a game-changer.

88% of customer success leaders believe AI is effective when offering self-service resources to help customers find answers independently.

However, the opportunity to use AI for self-serve support will grow in the future with new channels, such as voice-activated assistants, smart wearable devices, and virtual reality experiences.

As an extension of self-service support, AI is also helpful in routing customer tickets to the right representative, as 90% of surveyed professionals agree.

10. AI will transform the approach to modern customer service.

AI will bring disruptive changes in the customer service industry in the coming years. While we’ve seen the rapid adoption of AI chatbots and knowledge base tools, the future holds bigger promises for businesses using AI for customer service.

In fact, 86% of leaders believe AI will completely transform the customer experience they deliver. Another 84% believe this technology will better equip businesses to fulfill their customers' evolving needs.

The bottom line: our approach to customer service will undergo massive changes as AI technology becomes more sophisticated and secure.

AI is Here to Stay in Customer Service

From the widespread adoption of chatbots to the promise of immersive customer experiences, AI is transforming the way companies deliver support.

But what does the future hold for AI in customer service? These ten trends will shape the new approach of the customer service industry influenced by AI.

That said, it’s worth remembering that AI is not a replacement for human customer service reps. Rather, it’s a tool to enhance the speed and accuracy with which you resolve customer requests.

By combining AI with human expertise, companies can create exceptional customer experiences that drive loyalty and improve the bottom line.

Editor's note: This post was originally published in July 2023 and has been updated for comprehensiveness.