The Benefits of AI in Customer Service
There have been several defining moments in the last 30 years that have transformed the way businesses, and in turn, customer service teams operate. Access to the internet moved operations online, introducing email, chat and VOIP channels. The rise of social media and customer reviews heighted the importance of customer-centricity and altered service philosophy.
Generative AI will be the next agent of change, shifting how customers get their information, and evolving the nature of work for customer service team members.
This article will discuss what AI in customer support looks like, the benefits of AI in customer service, and how it can help online retail brands deliver exceptional experiences.
AI in Customer Service
For some, AI in customer service has negative perceptions, therefore doubt in its widespread and long term adoption. This is understandable.We’ve all tried contacting a brand, only to find them hiding behind a bot with no real way to talk to a human. We’ve had chatbots completely incapable of answering even the most basic inquiries. We’ve typed our questions only to be stuck in endless loops, or in dead ends, because someone, somewhere, didn’t set up the chatbot dialogue correctly. On the business side, we’ve invested in chatbots with the hope of reducing the cost of our service operations, only to require a full-time person managing the technology for so-so success. No wonder the use of AI in customer service has a bit of a reputation to overcome.
But this past year has introduced advancements far more sophisticated than before. Unlike machine learning, which looks for keywords and matches the keywords with a prewritten response; or natural language processing which looks for the customer intent and provides a prewritten response, generative AI can understand the intent, and create its own response based on the information it knows. This creates a more accurate and a more natural experience. It also requires far less effort to maintain. Team members can just upload documents into the system instead of building out flow after flow.
Historically, AI was most used in a chatbox experience, but generative AI’s conversational capabilities can be leveraged on email, voice, and social media, making it channel agnostic. It also handles the automation of tasks such as the tagging of a customer service inquiry, and the summarization of a phone call - manual and time-consuming processes that were handled by service agents up until this point. AI in customer service can include interactive help centers to better serve customers, and dynamic knowledge bases to empower service team members. All of these developments can contribute to elevated experience and smoother operations.
A Look at the Benefits of AI in Customer Service
Faster Response Times
The amount of time people are willing to wait for a response from customer service continues to go down. Long gone are the days of getting back to an email within 24 hours, and having that be the gold standard. Today many online retail brands aim for 4 hours, while the customer expectation sits closer to 2 hours.
Today’s customers expect an order cancellation within a few minutes. They expect a refund as soon as their package is scanned. They want a replacement order for their damaged goods on the way, right now. These inquiries come at night. They come on weekends. They come on holidays. It doesn’t matter whether your company is open or closed; these are the customer expectations, making the concept of “business hours” somewhat meaningless.
Closing the gap between what the customer wants and what the brand can realistically offer is challenging. Dedicated employees, or even an outsourced contact center, available 24 hours a day, 7 days a week, and across all communication channels is not financially feasible for many up-and-coming ecommerce brands. Even if the contact center is staffed 24/7, there’s the obstacle of responding to all urgent inquiries within the required timeframe to meet rhe customer expectation. Depending on your service level goals, that can really inflate your staff, and therefore your costs.
There’s also the quality of life for service agents to consider. Rising customer demands and pressure to meet them quickly, and across all hours of the day, makes the job as a customer service representative more difficult now than ever before. When service teams are unable to meet these demands, customers may not express themselves… as their best self. Stress, service fatigue, and burnout are common, and contribute to the average customer service team member remaining in the role for an average of two years.
This is where the benefits of AI in customer service come in. Today’s chatbots don’t just offer information; they take action. With API connections, minimal integrations, and much of the work completed on the vendor’s end, chatbots can now cancel orders, edit orders, file returns, issue refunds, and resend lost orders, taking on many of the urgent and transactional tasks previously performed by agents. Instead of waiting for the business to open, or an agent to become available, these actions can be completed on the customer’s watch instead of the brand’s.
Personalization at Scale
Creating a personalized experience for customers has been a significant priority for many businesses. It’s been proven to reduce customer effort, increase customer engagement, improve customer satisfaction, and gain customer loyalty and retention.
But personalization today doesn’t just mean using your customer’s name in marketing emails. Consumers expect brands to know where the consumer is in their relationship together and predict their wants and needs based on that information. If the customer is contacting your customer service team, they expect the agent to already know how many products of yours they own, that they spoke with someone on your team yesterday, that they left a negative review for on your latest product launch, that their NPS score is down from last year, that the order expected to be delivered today still hasn’t arrived, and that they’re signed up for marketing emails but not texts.
While platforms with system integrations show this type of data to customer agents today, it would be challenging for a human to see and interpret all that information in an instant, and to speak to that customer with all that data in mind, using the appropriate tone, only offering communication that makes sense in that moment, without the consumer needing to share a story.
This is another one of the benefits of AI in customer service functions. A sophisticated AI chatbot can identify what may be occurring for the customer at the moment and suggest solutions to the problem with little time and effort on the consumer.
In addition to responding to customers in a personalized and efficient way, AI can proactively communicate with customers. We all know that it’s better for the customer experience if the brand reaches out to a customer about a problem before they reach out to you. Unfortunately many companies don’t honor this best practice due to lack of bandwidth.
Proactively notifying the customer often requires someone to run an export of those impacted, the work to be divided up amongst service agents, and those agents to send an email one-by-one in between incoming service volume. It’s a manual effort and it’s seldomly getting done.
Modern AI solutions can “read” when there’s a hiccup in the user journey and send those emails on the company’s behalf.
Cost Control
Everyone can provide customer service, but not everyone can provide amazing customer service, and those that do, know it doesn’t come cheap. There’s the cost of hiring quality people, paying them a living wage, investing in technology, processing reshipments, issuing discounts for service recovery, and so on.
It’s not uncommon, as part of an online store’s growth journey, to hit a wall at some point. You don’t have a budget to bring on more staff, but you need the help, and you don’t want to sacrifice the quality of service that your brand is now known to provide.
This is where AI can be a benefit to your customer service pillar. By automating common actions like order cancellations, and simple inquiries that are easy to self-serve, you can save your agents for more complex scenarios or for customers who really prefer a human touch. With the right solution and a strong implementation, results can occur overnight, delaying your timeframe to hire for months, or in some cases, years.
Enabled Agents
As industry chatbots began to leverage GPT technology, a shift in the customer service agent workflow occurred. Rather than leverage their internal help center for product information, they began using the same chatbot as their customers. The information was generated faster than they could look it up, and it was straight-to-the-point. One of the best benefits of AI in customer service, the Agent Co-Pilot was born.
Co-Pilots are internal-facing AI solutions that can have a range of capabilities, from serving up knowledge base content, to sharing historical tickets with similar topics, to improving the agent’s tone of voice, to crafting the customer response. Teams that have adopted Co-Pilots have improved their average tickets per hour and reduced their time to onboard. With its ability to really enhance the agent experience, some brands have found it increased their employee retention and ability to recruit.
Conclusion: Embrace the Revolution
The benefits of AI in customer service are clear: faster response times, deeper personalization, cost savings, improved agent experience, and more. But beyond that, AI is about creating better, more meaningful interactions with your customers. It’s about using technology to enhance the human touch, not replace it.
Incorporating AI into your customer service strategy isn’t just about keeping up with the times—it’s about staying ahead of the curve. By leveraging AI, you can deliver exceptional service that scales with your business, keeps your customers happy, and drives long-term success.
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