While in the past, companies would focus solely on lowering the cost or increasing the quality of their products to oust their competitors, the landscape today is much different. Today, companies compete on customer experience. A recent research study found that customer experience is now the top priority for businesses in the next five years, beating product and pricing. And there’s no mystery behind this shift – the numbers support it. A whopping 86% of buyers say they are willing to pay more for a great customer experience.
The availability of Big Data coupled with advanced AI algorithms has played a considerable role in facilitating this shift from customer service to customer experience. Of course, offering robust customer service is essential in the digital economy, but the companies that thrive leverage the latest tools to become truly customer-centric. With this in mind, let’s look at the ways AI-driven approaches improve customer experience.
Customer Service vs. Customer ExperienceThe terms ‘customer service and ‘customer experience’ are often used interchangeably. However, while related, there are distinct differences between the two. Customer service has a fairly narrow scope. It’s concerned with providing assistance to customers as needed, whether that’s through calls, email, social media, and so on. By contrast, customer experience (CX) is concerned with the entire customer journey. Customer experience includes customer service, but it also includes all other customer touchpoints like your blog, website, live chat, social media.
Offering exceptional customer experience, not just customer service, is critical in the modern world. The internet has made it easier than ever for consumers to find many options for any one product or service. By focusing on the customer’s experience from the moment they first interact with your brand, you’re more likely to attract new customers, keep existing customers, and strengthen brand loyalty.
The likes of Netflix, Amazon, and the other tech giants, which offer hyper-personalized and convenient experiences, have shifted customer expectations. Consumers today are far less likely to persevere with a company that makes them work to buy a product. They’re also unlikely to give their money to a company that doesn’t “get them”. In other words, companies that fail to adapt to this desire for streamlined, personalized experiences risk getting left behind.
Challenges in deliveryIf offering excellent customer experiences was easy, every company would be doing it, and doing it well. However, most of us can think back to several frustrating experiences with companies we’ve had in just the last month. So, what exactly stands in the way of offering a great customer experience?
Data and data analysis: We’re creating more data today than ever before. In fact, in 2020, we created an eye-watering 2.5 quintillion (18 zeros!) data bytes daily. For businesses, data is the key to understanding customers better and obtaining actionable insights. However, not every company is collecting data in the right way or using it for analysis.
Adapting experiences to individuals: Customers are unique; therefore, their experiences need to be unique. What works for some customers won’t work for others. Determining how to tailor the customer experience to different customer segments can be challenging. For example, do you segment customers based on buying habits? Income? Age? Next time you’re watching Netflix at someone else’s house, pay attention to the thumbnails because they’re likely different from what you see. Netflix’s artificial intelligence algorithm learns what kind of images you respond best to.
Measuring CX improvements: Making changes to improve the customer experience is excellent. Still, you have to know whether those changes have had a measurable impact on customer retention, sales, and acquisition.
Filling the CX Gaps with AI
While many companies understand the value of focusing on customer experience, exactly where and how AI fits into the equation is often unclear. Could companies make significant CX gains without AI? The simple answer is no.
Artificial intelligence excels in many areas where humans struggle. For example, people aren’t great at working with massive datasets like weblogs and extracting valuable information from them. Human bias is also a considerable factor that can hold us back. For example, we often start with an assumption and find data to support it. By contrast, AI can find patterns in customer data that we didn’t even know to look for.
Lastly, AI is great at working at scale and closing the gap between what consumers say they want vs. what they actually want. For example, you could implement CX changes by conducting extensive customer surveys. However, while this method would likely improve CX in some areas, it would fail in others. Why? Because you’re only capturing the opinions of people willing to sit through a long survey, and these are likely people already invested in your brand. It doesn’t tell you enough about how to improve the experience for the average or dissatisfied customer.
Below are the top three tangible use case of AI to improve Customer Experience.
Leveraging What You Know About Your Customers
Have you ever bought a product and then got an ad for the exact same product just a few days later? It’s amusing when this happens for products you buy very infrequently, like a mattress. AI models, Big Data, and customer data analysis help eliminate janky experiences like these through the creation of customer personas. Armed with these personas, you can reach the right customers with the right products and at the right time.
Suppose a customer calls customer service after spending 20 minutes browsing your website looking for a solution to their problem. Without AI, the agent might run through a long list of questions to get to the root of the problem. This gets the job done, but it’s needlessly time-consuming and costly, not to mention frustrating for the customer. But what if the agent is presented with a probable topic the customer is calling about? And perhaps even the relevant material to solve the problem that second? This is something AI can do in a matter of seconds.
Eliminating the Need to Contact Customer Service
With an AI-driven customer-centric approach, customers have less need to contact customer service at all. Think about it – how often do you contact Netflix or Amazon? Rarely; because everything just works. The experience on these platforms is simple, intuitive, and yet rich in features. AI helps achieve this by providing you with insights like how much time users spend searching for a solution before contacting you, what areas of the site are most confusing, and where friction points exist.
What’s the Verdict?
While in the past, there was some debate about how big of a role AI would play in business, now that debate is over. In a world where customer experience is now the top priority for businesses, AI provides the answer. It transforms numbers in a database into actionable insights that improve customer loyalty and, ultimately, drives sales. If you’re not already investing in AI, now’s the time to start.