Why Service Teams Are (or Aren't) Investing in AI [New Data]

Customer service matters. A lot. It has a tangible impact on brand loyalty and consumer perception. For example, a survey of 1,500 US adults revealed that 45% would never shop with a brand again after two bad service experiences.

Organizations are always looking for ways to augment customer service and help teams provide better support. Enter AI.

This blog will look at the state of AI in customer service, why teams invest or don't invest in AI, and best practices to build your team's AI strategy.

Table of Contents

• The State of AI in Service
• Benefits of AI in Customer Service
• Why Teams Invest in AI
• Why Teams Don't Invest in AI
• How to Build Your Team's AI Strategy

The State of AI in Service

What do the Industrial Revolution and AI have in common? According to 2023 HubSpot data, 57% of business professionals say that AI will rival the industrial revolution when it comes to the impact on human productivity. That's no mean statement.

Of customer support specialists, 86% feel that AI/automation tools will “completely transform” how they do their jobs in 2024, and 84% say that AI will be instrumental in helping businesses meet customer service needs. 

Service professionals who leverage AI/automation have a number of tools to choose from, the most used being AI chatbots that respond to customer service requests and generative AI tools that help write responses to service requests. When it comes to chatbots, 90% of organizations say that these tools are effective in responding to customer service requests. 

It’s worth noting, however, that attitudes toward AI in customer service vary. Data from our 2023 survey found that 40% of customer service reps are eager to use AI in their roles. A larger portion (49%) say their staff remains neutral — neither eager nor hesitant, and 77% of customer service professionals who don't presently use AI in their role don't want to start.

The diversity of opinions makes sense. Given AI’s rapidly changing role, it’s difficult for organizations and employees to know exactly how it will be applied. As a result, concerns have emerged around issues with personalization, customers' preference for human interaction over AI, worries about becoming overly dependent on AI, and fear of job security.

Now, let's understand why customer service teams decide to invest in AI or not.

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Benefits of AI in Customer Service

AI offers multiple benefits for customer service teams, including:

Increased Personalization

Surveyed leaders say 78% of consumers want more personalization than ever before. This personalization can take many forms — whether it’s a targeted email with customer-specific deals or offers or a customized online shopping experience that showcases relevant products and services.

As data volumes rapidly increase, however, personalization presents a challenge. In fact, just 47% of leaders say that customers get a “very personalized” experience with their company. AI offers a way to streamline personalization efforts by taking on the tasks of customer data collection, curation, and comparison. Eighty-six percent of survey respondents believe that AI will completely transform the customer experience, and 62% of leaders plan to increase their investment in personalization at scale.

Improved Issue Resolution

Issues happen — it’s how companies handle them that keeps customers coming back, or sends them somewhere else. While businesses know the value of speedy resolution, both ticket volumes and consumer expectations make this challenging.

Consider that 75% of leaders say the number of tickets and service requests is higher than ever before, and 82% percent of customers expect these issues to be resolved immediately. With 72% of businesses reporting that customer service takes too long for the modern user, it’s clear there’s a disconnect between expectation and action.

Companies using HubSpot’s AI-enabled CRM report significant benefits to issue resolution: 64% say the platform has reduced the amount of time customer service spends resolving tickets and issues, and 72% say it has sped up ticket resolution time.

Enhanced Omnichannel Experiences

Customers expect companies to be available anytime, anywhere, and on any channel. These omnichannel experiences are critical to keep customers coming back. I can personally confirm that if I have to explain my issue or request again and again across multiple channels, I’m considering a new provider.

According to the State of Service data, 79% of service leaders say that customer service needs to be available across all channels. To help achieve this goal, 65% of companies plan to increase their investment in omnichannel strategies, and 38% of CX teams will start offering omnichannel support in 2024. 

Reduced Complexity 

More data across more touchpoints means increased complexity for organizations. Consider a customer who engages with companies on social media, conducts product research on e-commerce sites, and ultimately makes a purchase in-store. While each of these touchpoints represents an opportunity, it also increases complexity — data must be collected, stored, and analyzed to provide usable insight. 

86% of business leaders say that AI will completely transform the customer experience, and 84% say it will be instrumental in meeting the needs of modern consumers. In addition, 65% say that leveraging AI and automation is more effective for scaling service than hiring more customer service representatives.

Why Teams Invest in AI

1. Helps Better the Customer Experience

Of customer support specialists, 71% agree that AI/automation tools can help them improve the overall experience customers have with their company.

Think about it. Consumers expect instantaneous (or at least quick) responses to their issues. Would you like to wait around for a company's business hours for an answer to a basic query?

Of course not.

Well, AI is your friend, then. Two of the top three biggest benefits of using AI/automation tools in a service role — according to customer service professionals who use AI — focus on improving the customer experience.

It makes customer service available 24/7 and helps customer service pros respond to support requests faster, thus reducing average handling time.

And here's what they feel are the top AI tools that significantly improve the customer experience with regard to customer service:

• AI tools that offer proactive customer support (anticipating issues and addressing them before they arise).
• Generative AI tools that help write responses to customer service requests.
• AI tools that train customer service representatives by simulating customer conversations.
• AI chatbots that respond to customer service requests.
• AI tools that collect and analyze feedback from customers on their experience.

2. Positive Return on Investment (ROI)

Of customer service leaders, 76% whose companies have invested in AI/automation tools say that their organization has seen a positive ROI (29% very positive and 47% somewhat positive).

Granted, the data doesn't suggest whether the investment (and returns) is exclusive to customer service or is across the board. However, seeing positive results using AI likely spurs confidence and investment.

And the data indicates that expenditure on AI in customer service remains steady (and also continues to grow). Only 7% of customer service leaders plan to reduce their investment in AI/automation tools over the course of 2023.

3. Saves Time and Makes Employees More Productive

We've all heard the adage "time is money." Here's how AI helps customer service professionals take control of their time:

• Customer service pros estimate they save an average of 2 hours and 11 minutes a day by using generative AI to write responses to customer service requests.
• In 2023, 80% of customer support specialists agree that AI/automation tools can help them spend less time on manual tasks such as data entry and scheduling meetings, and 78% agree that such tools can help them be more efficient and spend time on the more important parts of their role.

Leaders in the field recognize this benefit too. Of customer service leaders whose companies have invested in AI/automation, 69% find that such tools make their employees more productive.

The State of Customer Service Report

Unlock essential strategies for exceeding customer expectations and driving business growth in a competitive market.

• Exclusive insights from worldwide CRM leaders
• Analysis of modern customer behaviors
• Closer look at the AI opportunity in CRM
• Strategies for staying agile in 2024 and beyond

Download the Report Learn more Download the Report

Download Free

All fields are required.

You're all set!

Click this link to access this resource at any time.

Download Now

Why Teams Don't Invest in AI

1. The Importance of Human Connection

The human versus AI debate is ongoing across multiple industries, and customer service is no different.

The top two points behind why customer service professionals don't use AI/automation tools in their role revolve around the human factor.

Today, 44% say that consumers prefer to interact with a human over AI, while 36% say that AI-powered customer service isn't as personal as service from a human.

2. Challenging to Integrate With Existing Systems

Customer service teams already have an established tech stack and processes for handling support and service tasks. Adding AI to the mix will likely involve additional investment, training, and time.

Of customer service professionals who use AI, 32% say that one of the biggest challenges with such tools is that they're difficult to integrate with existing data or systems.

3. A Mix of Other Factors

Difficulties and hesitations with AI in customer service — among reps who both use and don't use this tech — include:

• They don't want to become overly reliant on AI tools.
• They find AI tools too expensive.
• It can be hard to maintain a personalized experience.
• AI tools sometimes produce inaccurate or biased information.

How to Build Your Team's AI Strategy

There are a lot of moving parts to consider when creating an AI strategy for a service team. But we've got you covered. Here are some best practices to get started.

1. Understand whether AI is right for your customer service team (and to what extent).

Don't simply rush into implementing AI because everyone's talking about it. First, invest time in research to determine whether AI is the right move currently for your service team and, if yes, what the scope would look like.

There are various factors that can influence this decision, such as:

• The nature and size of the customer/prospect (B2B vs. B2C/individuals, SMBs, or enterprise accounts).
• Customer expectations.
• The average number of customers/prospects your team has to handle.
• Budget and cost for implementing AI solutions.
• The time needed for set-up, training, and execution.
• Predicted ROI.
• General attitudes toward AI (within the overall organization and among reps).

Some teams might choose not to use AI (or to harness it sparingly), and that's okay.

Veranika Kavaliova, Help Desk Manager at ScienceSoft, says, "We have more of a boutique support, with dedicated human help for each customer…

"If we were to use AI tools somewhere, it would be for our engineers to help them in their work while still keeping interactions with users as human-to-human."

Kavaliova continues, "For example, we may introduce data-driven case resolution when an AI-powered system analyzes customer data from multiple channels and provides agents with tailored recommendations based on those insights.”

Remember: It's vital to identify what works best for your team.

2. Determine your goals and uses.

Each service team will have different aims with AI.

Tim Clarke, Senior Reputation Manager at Rize Reviews, says it's important to think about what specifically you hope to accomplish with AI-powered customer service.

"Is it to speed up service, boost client satisfaction, or both? Once you have these objectives in mind, you may establish priorities and create a plan of action."

After this step is complete, there are several ways you can leverage AI — beyond the humble chatbot — to meet your customer service goals. This includes:

• Behavior prediction
• Request routing and prioritization
• Sentiment analysis
• Anomaly detection
• Augmented messaging
• Multilingual support

You can read more here to help you select the best AI applications for your team.

3. Implement on a smaller scale (before a full rollout).

When it comes to putting strategy into action, slow and steady is the way to go — at least at the beginning. Why?

Abhi Bavishi, an AI consultant and automation expert, narrates an example.

"A company I worked with started implementing an AI-based chatbot to automate their support process without adequately testing the solution."

He continues, "This led to several issues, including a mismatch of customer expectations, incorrect responses, and the frustration of not being able to connect with live agents. The company had to revamp their entire strategy.”

Starting small will help you avoid a major fall. You can also iron out the unavoidable wrinkles at a low cost.

4. Keep your AI strategy measurable.

An AI strategy that isn't measurable is like driving in the dark without any headlights on. How can you ascertain whether to remain on the same track or adjust your course?

Sudha Bala, Head of Customer Success & Support at TheLoops, believes that any AI strategy a customer-facing team employs should follow this guiding principle:

"Will you be able to easily identify improvements that you or other teams can action?"

Talking about the benefits of a measurable AI strategy, she adds:

"Real-time contextualized insights measure the entire support picture: the customer's communication and outreach, the team's response, and the product issues/mishaps so that all teams understand how to address the root of the problems and prioritize them before it's too late and avoidable churn occurs."

5. Agility is the way to go.

The AI and market landscape is continually changing. What works today might not work tomorrow (or a year from now). So how can service teams keep up?

By "embracing agility," says Mickey Powell, Head of Go-to-Market at Update AI, which offers an AI-based meeting assistant for customer success teams.

He advises:

• "Build a culture around experimentation, improvement, and constant change. Set aside time in team meetings and 1:1's to foster this."
• "Find your champions and empower them. Who is always looking for that edge and willing to try new things? Put them on the forefront of these tools and process changes."

Additionally, understanding how to use AI tools well in customer service is a skill set that can set you (and your team) apart from your peers.

Here's an excellent podcast on leveraging AI and automation to accelerate your career (listen from 03:24 to 8:52).

Click here to listen to the full episode.

Keeping the Spotlight on the Customer in Customer Service

Over 80% of customer service pros feel that by 2025 most customer service professionals will use AI/automation in their roles.

With the rapid growth of artificial intelligence, it's essential to remember that AI in customer service — just like any other technology — is merely a means to an end, which should likely be customer happiness and retention.

After all, the customer is king.

Editor's note: This article was originally posted in June 2023 and has since been updated for comprehensiveness.