Customer expectations today are higher than ever. In a Forbes Insight survey, 67% of business leaders agreed that their consumers expect a top-notch customer experience regardless of how and where they interact with the company.
Three-quarters of business leaders also believed that CX excellence is vital to their company’s survival. So, it’s no wonder businesses are increasingly turning to artificial intelligence (AI) to transform the experience customers get.
From hyper-personalized product recommendations to instant replies from social media chatbots, AI is offering new ways to anticipate customers’ needs, solve problems, and foster loyalty.
In this article, we’ll explore the connection between AI and customer experience and the impact it has on customer interactions. We’ll also discuss how your business can use AI to enhance customer experience.
What is an AI customer experience?
AI customer experience refers to companies leveraging artificial intelligence to enhance, automate, and personalize customer interactions. The concept mainly revolves around understanding and meeting customer needs, often before they even articulate them.
To achieve this, AI customer experience relies on AI-powered solutions, such as chatbots, predictive analytics, natural language processing (NLP), and machine learning algorithms.
These solutions enable AI tools to sift through and analyze large amounts of customer data quickly. This helps businesses better understand and serve customers at every touchpoint.
However, an AI customer experience doesn’t just improve individual customer interactions. Consistently providing personalized and quality customer experiences helps your business build strong long-term customer relationships that lead to growth and success.
How Businesses Can Use AI to Revolutionize Customer Experience
As AI technology evolves, so does the number and quality of transformative applications businesses can use to deliver exceptional customer experiences. Let’s look at seven ways businesses can or are already using AI to transform their customer interactions:
1. Customer support team assistance
Customer support teams are increasingly relying on AI.
According to a recent Hubspot survey, 85% of service leaders believe AI will completely transform the experience customers get with their company. With 77% of the customer service teams using AI and getting excellent results, it’s easy to see why they think that’s the case.
Support teams using AI execute all duties in only a fraction of the time they’d use otherwise. For instance, an AI-powered social media chatbot can analyze a query, comprehend the text context, and either reply or route the query accordingly.
The customer service agents use the time they’d have used manually responding to customer inquiries to handle more complex tasks or concerns.
AI can also provide 24/7 customer support, ensuring human agents don’t lose sleep just to answer a customer’s question. Even when the agents are off or on breaks, your chatbot answers the queries they can handle, which is a better option than having customers wait for hours until an agent is available.
You can create a graph RAG (Retrieval-Augmented Generation) to ensure your AI chat assistant always uses the most accurate and relevant data when responding to customer queries. This will ensure customers always receive precise, informative, and personalized answers.
Rather than completely replacing customer support teams, AI helps ease their workload. With repetitive tasks out of the way, your support teams can focus on delivering excellent services. The Hubspot survey showed that 92% of the customer service teams using AI have improved their response time, and 86% have seen higher Customer Satisfaction Scores (CSAT).
Meanwhile, your business will see higher employee retention rates since your agents get to enjoy a good work-life balance.
2. Virtual assistants
Companies like Google, Apple, and Microsoft use AI to power virtual assistants. Alexa, Google Home, or SIRI can handle a wide range of routine tasks based on user input.
They can produce a long list of recommendations and answer a wide variety of users’ questions, from what the weather will be like on the day to more complex questions like how to make money online with AI.
They can also play music, operate smart home devices, place Amazon orders, deliver news, and even call someone from a contact list while users are driving.
These AI-powered virtual assistants can analyze previous interactions to extract key information like main points, action items, and decisions, thanks to AI transcription. This enables them to deliver highly personalized experiences tailored to each customer’s unique needs and preferences.
3. Email verification
AI-powered email verification tools help businesses maintain clean and active email lists. The tools deliver full-featured and secure verification solutions to automate email address verification procedures. They allow you to discover invalid email addresses, including those that have been mistyped.
Check out this report from ZeroBounce, an AI-powered email verification tool. It points out misspelled or invalid email addresses in an email list:
If the cases above were an error on the company’s part, they can correct it before the email is sent. The result is that the email newsletters will always reach the intended audience. Such tools also prevent instances where customers don’t receive important notifications, offers, or customer support follow-ups.
AI email verification yields additional benefits for the business as well. Removing invalid addresses makes sure that your campaigns reach an audience that is more likely to interact with the content. The result? Higher open rates, fewer unsubscribes, more conversions, and a great sender reputation.
AI-powered email verification tools can also be a great asset if you plan to run list-based retargeting ads on social platforms. List-based retargeting is when you try to reengage your email list contacts by showing them targeted ads on a platform like Facebook. The platform will identify users with matching emails and reach them with specific ads that match their interests.
You can segment your list based on various criteria like location, cart abandonment, and past purchases. But, while this type of retargeting allows you to show more customized ads, it will only be effective if the email addresses are active or valid.
4. Consumer behavior analysis
Understanding consumer behavior is essential for creating relevant, engaging customer experiences. You can enhance the experience your customers have across all touchpoints and channels by employing AI to understand consumers.
AI-driven tools analyze vast amounts of data from social media interactions, website visits, and purchase histories to identify trends in consumer behavior, preferences, and buying patterns.
For example, AI might help you detect that most customers shop for electronics during holiday sales. As a result, you can adjust your holiday offers accordingly to keep the customer happy and loyal.
You can also use AI to predict future behavior based on past actions. For instance, if a customer frequently buys running gear, AI will help you anticipate their next purchase. This is typically a related product like a fitness tracker or a water bottle.
You can even identify potential issues before they arise. For example, if you detect low engagement rates in a specific customer segment, you can identify patterns that help you understand why. If, say, the issue is your pricing, you can offer incentives like discounts or free shipping before they disengage completely.
5. Personalized recommendations and offers
Personalization is one of AI’s strongest capabilities. AI analyzes customer data and then suggests products, services, or promotions that align with individual preferences. This increases engagement, loyalty, and sales.
For example, streaming platforms like Netflix analyze viewing history to recommend shows and movies that align with a user’s preferences. Such personalization makes customers feel understood and valued. It significantly enhances their experience with your brand or business.
You can also use AI to identify which customers will likely respond to discounts at specific times and tailor offers for higher customer engagement. For instance, you can send a 20% discount on winter wear to customers in colder climates. You can also run customized back-to-school offers for parents and students when schools reopen.
You can even go further and use dynamic pricing, where prices change based on factors like product demand, customer behavior, and purchase history.
Besides that, personalized ads and recommendations have become the norm on social media platforms. For instance, Facebook and Instagram use AI to curate ads and posts that align with user interests, social media activity, and browsing habits, which boosts engagement. You’ll often see targeted Instagram ads of the specific items you browsed on an eCommerce site.
You can also use social media chatbots to offer personalized recommendations based on user interests or preferences. Check out how this Instagram chatbot by Manychat does this.
Keep in mind AI uses machine learning algorithms to improve the accuracy of its recommendations over time. This means the more data it processes, the better it becomes at predicting customer preferences and the more accurate its recommendations become.
6. Provides data-driven insights
Ever wondered how successful businesses always seem to be one step ahead, whether it’s by the products they launch or marketing strategies? It’s not just luck. They are leveraging accurate data, which is where AI comes in.
AI turns the raw data it collects, analyzes, and interprets into actionable strategies. You can use the insights to improve customer experience, streamline operations, and boost ROI. The best part? You don’t even have to be a data expert because AI does all the heavy lifting.
First, AI recognizes hidden patterns and trends that even human analysts might miss. After all, AI analyzes data more effectively and faster than any human could. These insights give you a strategic advantage, helping you stay ahead of the curve and ready to meet your customers’ needs.
In addition, unlike traditional analytics, AI processes your data in real-time. This means you can use data-driven insights to respond quickly to customer needs or market changes. For instance, AI tools can help you track trending topics on social media. You can use that information to align your messaging with current customer sentiment.
You can also leverage AI to conduct sentiment analysis. AI tools analyze customer sentiments expressed in customer reviews, comments, or social media posts and gauge brand perception and customer satisfaction levels at any given point.
This will give you a head start to address any potential pain points promptly before they turn into a full-blown PR crisis. It is also a great way to save on operational costs. For example, identifying and addressing customer pain points beforehand will most definitely reduce the volume of support tickets you get.
7. Enhances security and fraud detection
A 2023 IAPP survey showed that 68% of consumers globally are concerned about online privacy. While the integration of AI into most platforms today is a huge part of this worry, the technology also plays a pivotal role in protecting user data and ensuring a safe experience.
Machine learning algorithms analyze patterns in transaction data, logins, and account activities to detect anomalies. This can help reduce the risk of fraud before it impacts the customer.
For instance, if a customer typically shops from one geographic region, a sudden purchase from another location may prompt additional verification steps to prevent unauthorized access.
This is not limited to eCommerce or banks; even social media platforms like TikTok send security alerts when a new device logs in to your account.
You can also integrate AI into your biometric systems (fingerprint, facial, or voice recognition) to enhance their accuracy, speed, and security. For instance, AI algorithms, especially machine learning models, are excellent at recognizing patterns and unique features in biometric data like fingerprints or facial structures.
Therefore, using an AI-driven solution will help significantly reduce false positives and false negatives.
AI can also process and analyze large volumes of biometric data quickly, which keeps the authentication process both accurate and efficient. As such, AI-powered biometric systems will not only improve security but also provide your customers with faster, hassle-free login experiences.
Final Thoughts on AI and Customer Experience
AI is undeniably transforming how businesses interact with their audiences. Artificial intelligence technologies can provide faster, secure, and personalized customer experiences to boost customer loyalty, engagement, and retention.
You can leverage AI in various ways to enhance customer experience. Key use cases include virtual assistants, chatbots, email verification, consumer behavior analysis, personalized recommendations, data-driven insights, and security and fraud detection.
Keep in mind that as technology evolves, the connection between AI and customer experience will deepen, and the applications will become more refined. As such, any business willing to embrace AI solutions will provide memorable, meaningful customer experiences that exceed customers’ expectations.
But why wait till then? Put your customers’ needs first by integrating AI and customer experience today.
