AI in Customer Service: How It Improves Support & Experience

Artificial intelligence, or AI, is transforming every aspect of doing business. And customer service is no exception.

Imagine a world where customer inquiries are answered swiftly, accurately, and at any hour of the day. A world where customer support agents are empowered with real-time insights to provide personalized solutions. A world where excellent customer service costs decrease while customer satisfaction soars.

This is the world that AI in customer service is creating.

Here, let’s delve into the world a little and see how AI is changing customer service for businesses, key statistics, and what advantages and future possibilities it brings.

What is AI in customer service?

AI in customer service pertains to the use of artificial intelligence in everyday customer support operations to automate tasks, streamline workflows, provide personalized assistance, and improve overall customer experience. An example of AI in customer service is the use of AI-powered chatbots to give personalized answers to customer queries in real time.

Top 9 benefits of using AI in customer service

The benefits of AI in customer service that your business can reap include quicker resolution of customer queries, personalized and automated customer engagement, increased cost savings, better ROI, and boost in customer satisfaction.

It’s for these reasons that organizations across the globe are bullish on using AI for customer service. The Global State of CX 2024 report reveals 28% of customer experience practitioners saw a positive impact on customer loyalty through their use of generative AI for CX, while 39% recorded a positive impact on company profits.

Here are 9 key benefits of using AI in customer service:

1) Providing round-the-clock service

AI-powered customer service solutions never sleep. This means your customers get help whenever they need it—day or night, weekdays or weekends. A study notes that 51% of customers expect businesses to be available 24/7 to meet their expectations of convenience and accessibility. AI makes this expectation a reality, without overburdening your team. What’s more,by integrating AI-driven chatbots, you can extend constant support across all time zones. To sum up, 24/7 AI-powered support reduces wait time for your customers, and frees up your human agents to handle more complex issues.

2) Driving down overhead costs

AI dramatically lowers costs by automating routine customer interactions. For instance, AI chatbots can handle thousands of queries simultaneously without salary hikes or overtime pay. Juniper Research reveals in a study that chatbots will be responsible for cost savings of over $8 billion per year. When used effectively, AI doesn’t replace jobs—it removes repetitive tasks, enabling businesses to allocate resources where human creativity truly matters.

3) Delivering personalized customer support

According to McKinsey and Company, 71% expect companies to deliver personalized interactions, and get frustrated when this doesn’t happen. So, to delight customers who have such high levels of expectations at scale, AI helps.

With AI, personalization goes well beyond merely addressing customers by their name or recommending generic products; it involves dynamically adjusting content, offers and recommendations based on the customer’s past interactions, location, demographics and even current context. Such precisely tailored customer experiences that’s powered by AI will foster deeper connections, increase engagement and ultimately drive customer satisfaction and loyalty.

4) Enabling immediate responses to customers

AI can provide immediate responses to common customer inquiries, reducing friction and frustration. In fact, Bank of America’s virtual financial assistant, Erica, answers queries from clients within 44 seconds on average. This is impressive, considering the AI assistant handles over 2 million customer interactions per day. So, implementing AI in customer service can help in providing immediate recommendations to customers, leading to higher customer satisfaction and shorter resolution times.

5) Improving accuracy and reducing human error

AI reduces the likelihood of human error by automating repetitive tasks. In industries like finance and insurance, where one mistake like miscalculation can have far-reaching consequences, implementing AI in customer service can significantly improve service quality. AI can handle processing of complex and voluminous data, scanning and analyzing thousands of documents quickly and accurately, without missing a detail. This level of consistency is unattainable through human effort alone.

By minimizing errors, AI builds greater customer trust, especially in areas like a miscalculated insurance payout or a missed financial anomaly. Reliable, error-free service enhances brand reputation, making customers feel more secure.

6) Providing seamless multichannel service

AI easily integrates across various customer service channels—email, social media, live chat, and more—to ensure consistency. Customers don’t need to repeat themselves, no matter how they contact your brand.

Why is this important? A survey shows that 71% of consumers expect consistency across all online channels, yet only 29% say that they receive this.AI’s omnichannel ability offers you a seamless, holistic view of the customer journey, which, in turn, leads to better-informed decisions and smoother service.

7) Ensuring scalability in customer service

AI scales effortlessly with your business. Whether your system needs to handle 100 or 10,000 customer queries, AI can respond with the same level of efficiency and speed. For customer support teams, AI can help triage support tickets, prioritize urgent issues, and offer self-service solutions at scale, allowing human agents to focus on high-value interactions.

Here’s an example. Bolt, a leading checkout technology platform, encountered significant obstacles in scaling its customer support operations effectively. But once they implemented DevRev, the AI-native support capabilities helped them streamline internal support processes to reduce manual tasks for agents and elevate customer experiences. DevRev’s platform is designed to grow with Bolt’s expanding operations, providing a scalable foundation for future growth.

8) Anticipating customer problems in advance

AI can predict problems before they occur, making proactive customer service possible at scale. Predictive analytics, powered by machine learning, allows AI to analyze vast amounts of data, identifying patterns that signal future customer challenges. For instance, customer service teams can anticipate customer churn with AI-driven predictive support that involves analysis of product usage data, customer feedback, and support interactions. Based on these data-driven insights, agents can proactively take steps to ensure your customer churn rate doesn’t go up.

9) Augmenting human support agents

AI agents will enhance—not replace—human support agents. These AI-powered agents will assist with answering FAQs, routing calls, and providing agents with real-time information, which can reduce the volume of support tickets.

For instance, solutions powered by generative AI can pull information from a number of sources like knowledge base articles, past conversation history, and support tickets to provide accurate responses instantly to customers. The AI agent can even decipher what a user’s goal is and understand what actions it needs to take to successfully complete it. With AI taking care of basic inquiries, human agents can focus on complex, emotionally nuanced cases that require empathy and critical thinking.

Ultimately, AI agents can work side-by-side with your human agents to make them better equipped to handle customers and elevate support.

Must-know AI in customer service statistics

• Revenue from Generative AI is anticipated to hit $1.3 trillion by 2032, according to Bloomberg Intelligence.
• Harvard Business Review reports that 50% of companies sped up their adoption of AI after the COVID-19 pandemic.
• Chatbots alone are projected to save $11 billion in costs across various sectors like retail, healthcare, and finance, according to Juniper Research.
• By 2025, 70% of digital service workplace transactions will be automated, a significant increase from the current 30%, as reported by Yahoo Finance.

Transform your customer experience using AI in 10 steps

To transform your customer experience management using AI, you need a step-by-step approach. This includes identifying pain points in your support process, setting the right goals, choosing the right AI tools, seeking feedback from customers, and monitoring the AI implementation to check what’s working.

Here are the 10 steps we’ve put together for you to incorporate AI into your customer service:

1) Identify pain points

• Analyze your current customer service processes to identify pain points and areas that can benefit from automation.
• Pinpoint routine and time-consuming tasks that AI can handle more efficiently, allowing your customer service teams to focus on complex issues.

Example: If your customer service team is overwhelmed with repetitive queries, such as account balance checks or order status inquiries, AI-powered chatbots can handle these routine tasks, freeing up human agents for more complex issues.

2) Set clear objectives

• Define clear objectives for implementing AI in customer service.
• Having specific goals, such as faster responses or personalized interactions, serves as a strategic guide for implementing AI.

Example: Define a goal to reduce response times for customer queries. With AI, you can aim for instant responses to common questions, creating a more efficient and responsive customer service experience.

3) Choose the right AI solutions

• Select AI tools and technologies that align with your objectives. This could include chatbots, virtual assistants, sentiment analysis, and machine learning algorithms.
• Consider the scalability and flexibility of the chosen solutions to accommodate future growth.

Example: Select a chatbot with natural language processing capabilities. For instance, a retail company could deploy a chatbot that understands and responds to customer queries about product specifications, availability, and delivery times.

4) Train your team

• Provide comprehensive training for your customer service team to work alongside AI. This includes understanding how AI operates, monitoring its performance, and stepping in when necessary.
• Foster a culture of collaboration between humans and AI, emphasizing that AI is a tool to enhance, not replace, the human touch.

Example: Provide training to customer service agents on how to collaborate effectively with AI. For instance, they can intervene in complex cases where human empathy and problem-solving skills are crucial, ensuring a harmonious collaboration.

5) Seamless integration

• Ensure smooth integration of AI into your existing customer service infrastructure. This may involve integrating AI with your CRM system, communication tools, and other relevant platforms.
• Test the integration thoroughly to identify and address any potential issues.

Example: Integrate AI into your CRM system. If a customer inquires about their order status, AI can seamlessly retrieve information from the CRM, providing real-time updates without requiring the customer service agent to navigate multiple systems.

6) Educate your customers

• Proactively communicate with your customers about the introduction of AI in your customer service processes. Explain the benefits, such as quicker response times and enhanced personalization.
• Create user-friendly guides and FAQs to help customers understand how to interact with AI-powered features.

Example: An e-commerce platform could inform customers that AI-powered assistants can respond quickly and accurately to frequently asked questions, improving overall support efficiency.

7) Monitor and analyze

• Implement robust monitoring tools to track the performance of your AI systems. Regularly analyze data to identify trends, areas for improvement, and customer preferences.
• Use analytics to gain insights into customer behavior and preferences, enabling you to refine your AI strategies continually.

Example: Track customer interactions with a chatbot and analyze data to identify popular queries, enabling continuous improvements to the bot’s responses.

8) Seek customer feedback

• Actively seek feedback from customers about their experiences with AI-powered customer service. Understand their perceptions, concerns, and suggestions.
• Use customer feedback as a valuable source of information for refining your AI strategies.

Example: Include a survey link in chatbot interactions to gather insights into customer satisfaction and areas for improvement.

9) Iterate and improve

• Embrace a mindset of continuous improvement. Regularly update your AI algorithms and processes based on customer feedback and changing business needs.
• Stay informed about advancements in AI technology to ensure that your customer service remains cutting-edge.

Example: If customers express confusion about certain responses from the chatbot, refine the language and responses to enhance clarity.

10) Provide human touch

• Despite the integration of AI, emphasize the importance of the human touch in customer interactions. Train your team to step in when empathy and understanding are essential.
• Maintain a balance between AI-driven efficiency and the personal touch that only human agents can provide.

Example: Emphasize the human touch in critical situations. Let’s say a customer expresses frustration, AI can detect the emotion and seamlessly transfer the conversation to a human agent equipped to handle the emotional nuances of the interaction.

The future outlook of AI in customer service

As the adoption of AI in customer service picks up, it’s important to know what kind of future you would like to create using this technology.

Do you wish to create a future with AI where:

• Customer feedback is effortlessly incorporated into product development?
• Customer interactions, feedback, and product data are all unified into a single source of truth?
• Real-time collaboration between customer support, product management, and development teams is facilitated seamlessly?
• Routine tasks such as ticket routing and issue prioritization are automated so that human agents can focus on empathetic aspects of customer service?

If you answered yes to at least one of the above questions, you should check out DevRev.

DevRev is an AI-native platform that unifies customer support and product development. Its analysis of structured and unstructured data like customer conversations, searches, and session analytics helps you transform customer experience completely. From customer service staff to software developers, DevRev helps in making everyone in the organization customer-centric.

Book a demo now to see how DevRev helps you get all the benefits of implementing AI in customer service.