How AI Will Reshape Customer Service: The Winners and Losers

How AI Will Reshape Customer Service: The Winners and Losers

Last updated on: April 25, 2018

The Robots are Coming

Actually, they're already here. They have been for several years.

Over just the past decade, we have seen artificial intelligence technology enter the mainstream. Chatbots alone are projected to grow faster over the next 5 years than the rise of websites between 1996 and 2001.

But chatbots are just scratching the surface.

Artificial intelligence technology (AI) will soon live at the heart of all types of software, operations, and entire business models.

We’re still in the early years of AI development and deployment, but adoption is rapidly expanding. AI is a new frontier for many businesses, and it’s becoming more accessible—and easier to implement—every day.

According to a report from Harvard Business Review, between 34 and 44% of companies are already using AI to help manage security, workload, and compliance in the IT department.

Even still, the rise of AI across other departments looms large. We know that artificial intelligence will have far-reaching and substantial effects on many facets of the business. Perhaps none more profound than customer service and customer experience. Let's explore how AI will reshape customer service in more detail.

AI Will Usher in a New Wave for the Customer Service Industry

Most notably, two seismic shifts that will redefine both the functional business role of support/service and customer expectations:

  1. Proactive support will become the standard. Companies providing only reactive support will quickly be seen as outdated and ineffective.
  2. Firms will focus on customer experience as a holistic strategy. Rather than attempting to rectify issues as they arise, the role of service/support will be to deploy tools to detect problems in real-time or eliminate problems before they occur.

It’s important to understand the massive shifts that are currently in progress and what change they will bring to your business and your industry. Most importantly, it’s critical for companies to understand the benefits and then move quickly toward a plan to implement these emerging tools and technologies.

These trends are already underway and firms that are slow to adopt AI as a central part of their service strategy will soon fall behind industry competitors.

How AI Will Reshape Customer Service

It’s no secret. Technology is upheaving—has upheaved—many departments, teams, and systems across pretty much every business function in the last two decades.

From the advent of the internet and online commerce to the explosion of search engines, social media, and mobile devices. Things are in flux.

But many experts predict that the next great transformation will come with advances in artificial intelligence.

Many products and services aimed at customer support—like our platform—already integrate AI as a core product functionality. This trend will continue and it will introduce many big changes to customer service operations and teams.

In particular, there are four major trends emerging from the rise of AI in customer service and support.

1. Superhuman Support Teams

Even the best-laid support strategy is vulnerable to human limitation.

Agents and technicians can only respond to so many requests, answer so many questions, or solve so many problems in a given day.

But that is changing.

Increasingly, world-class support operations rely on a mix of human interaction and computer-powered support to provide exceptional care and service to customers. This relationship between personal contact and the speed and efficiency of computer technology allows customers to get answers quickly and enables agents to provide better, faster support.

The combination of an excellent human support team with the power of AI leads to truly outstanding results—improved service, lower costs, and a better experience. But even enabling superhuman support teams is just the beginning for AI.

How Human Agents & AI Work Together With current technology, there are a number of specific use cases for how support agents and AI or automated systems work together.

Interested? Learn more about how AI chatbots can help your agents succeed.

2. Machine Learning Algorithms Drive Proactive Support

Imagine that you’re using a piece of software and you can’t figure out how a certain feature works. You flip back and forth, but you just can’t quite get it. But, then, a message pops up—it answers the exact question you had before you even asked it.

Seems incredible, right? This is the power of proactive support.

Advanced machine learning algorithms can monitor customer activity and identify issues before they arise.

By analyzing hundreds, thousands, or millions of customer records, behavior logs, and support requests, these algorithms learn and predict which customers are most likely to experience specific issues—and when.

In response, such a platform can deploy support messages, reminders, and tips to customers in anticipation of their upcoming needs.

Rather than providing support in response to a customer inquiry (reactive), support teams can build and deploy playbooks that identify customer needs and provide answers before they even ask.

This is a shift to proactive support.

What would require an army of on-call agents poring over logs can now be accomplished with technology that already exists. Best of all, it provides customers with an exceptional experience that feels seamless and magical.

3. Omnichannel Support Becomes Non-Negotiable

As proactive support strategies take hold, providing an omnichannel customer support experience will become the norm.

It’s possible to use technology to collect input from support AI and push out active messages and notifications to users in real-time, across various channels. These messages may arrive via text message or email, but they could also be in-app messages, push notifications, or even letters.

This may feel like science fiction, where every customer’s needs and wants can be anticipated and answered without the need for humans at all. But, even with sophisticated AI and technology integration, the human support team still plays an important role in the entire process.

In an operation powered largely by AI, the role of the support team is to manage and deploy these tools. It’s to shape the customer experience from the top-down, developing specific strategies to help along the way.

4. Emphasis on Customer Experience Rather than Customer Service

Customer service is characterized by responding to customer inquiries—solving problems as they arise. As discussed, AI will allow support teams to shift from reactive support to proactive activities that help meet customer needs without prompting.

What this means is that there will be less time, energy, and money spent on serving customers directly. Many of their issues will be resolved proactively, reducing the number of inquiries and support requests.

So what will the support team spend their time doing?

Customer experience management.

That is to say, the service team will be responsible for understanding the customer journey as a fluid process from initial awareness and then taking steps to actively shape that experience to be as seamless and enjoyable as possible.

This will require a shift in thinking, skills, and organization. But firms that are able to make the shift will recognize enormous benefits in the form of industry-leading customer experience that improves customer satisfaction and retention while also lowering costs.

Winners: Leaders in AI Will Win at Customer Experience

It’s clear that AI will—and already is—reshaping the way that customer service teams operate.

What may be less apparent is how these changes will translate into direct business value for firms that adopt AI. For some executives, it may still seem like a technology that’s neat but has little or no immediate impact on day-to-day business.

Of course, this isn’t the case.

AI is creating real value, both for businesses and for consumers. It’s enabling new operating models that are more efficient and also leading to a higher level of service that leads directly to higher customer satisfaction, retention, and revenues.

Taken together, it’s clear that the winners—those who stand to gain the most from AI technology—are the firms that are quick to embrace and integrate new tools into their strategy. Not only will they see incremental improvements across a range of business functions, but they’ll be able to provide a superior customer experience as a whole.

AI Saves Money

There’s no mystery about the cost savings that come with using AI to power customer support operations.

Issues will be resolved in less time and with less effort, meaning that existing support agents can handle more requests. This may also mean that your firm needs to hire fewer front-line support agents in the first place. That money could then be net cost savings or invested in other areas of customer support operations.

In total, IBM estimates that chatbot technology alone is already saving companies about $20 million per year.

But this figure will balloon to $8 billion per year by 2022.

Better Service Means Better Experience

One thing should be clear: implementing AI as part of the customer service strategy should lead to a higher level of service.

And, as you may expect, most customers want—or demand—better service. So, at the most basic level, AI technology enables firms to help more people in less time, reduce frustration, and improve satisfaction.

AI technology enables firms to help more people in less time, reduce frustration, and improve satisfaction.

But beyond simply improving quality, companies that leverage technology will also be able to invest more time and resources into actively managing the customer experience in a holistic way.

These firms can dedicate support team time toward better understanding customer needs and anticipating—and answering—their questions throughout the entire customer lifecycle.

As a result, firms that embrace AI and restructure their customer service teams to take advantage of emerging technology will not only provide better service in less time and at a lower cost but also have more time and money to invest in the overall customer experience.

Higher Customer Satisfaction, Retention, and Revenue

Fifty-five percent of customers say they would be willing to pay more for a better experience.

This is telling.

Not only can customer experience leaders expect to achieve higher customer satisfaction and retain more customers, but they can also command premium pricing in exchange for providing a seamless experience.

This creates a “triple whammy” and underscores the importance of investing in customer experience as a whole and AI technology to bolster those efforts.

How AI Will Reshape Customer Service by the Numbers: The Good, The Bad and The Ugly

Losers: Laggards Will Lose the Customer Experience Battle

Firms that fail to incorporate AI meaningfully will face much the same fate as those that missed the wave of other major technology innovations.

As AI becomes more commonplace across all industries, holdouts will see a severe decline in customer experience, which will reflect in declining customer loyalty and revenues.

Not only will laggards not enjoy AI benefits, but they will find that traditional support operations no longer meet customer expectations. Combined, these forces will pressure businesses to adopt new technology.

The question then becomes: is it too late?

As AI-driven customer service transitions, firms that resist or slow down adoption will face looming challenges. These forces may motivate action but could also prove insurmountable for those who wait too long to adapt.

Less Customer Patience

As more firms deliver on-demand answers via automated systems or nearly-instantaneous responses from agents backed by computer algorithms, customers will increasingly expect this service level.

Much like fast-food customers now expect quick service, they will develop expectations for AI-powered service and support. Customer satisfaction will decline rapidly for firms that fall behind.

Lower Tolerance for Errors and Issues

While customer experience leaders focus on identifying and mitigating customer issues proactively, laggards respond reactively.

There will be a higher number of issues, errors, and complaints. Customer tolerance for situations requiring support will decline. They expect the seamless experience delivered by industry leaders.

According to a report from thinkJar, 67% of customers who churn cite poor experience as the main motivation.

So customers will leave companies unable to offer the seamless service competitors provide.

Reactive Support Interactions Become Increasingly Difficult

As customer expectations shift, front-line agents forced to deal with increasingly unsatisfied, confrontational, or hostile interactions will find individual interactions more difficult.

This will negatively impact overall performance and lead to worsening work conditions for front-line agents with little power to correct underlying issues.

Customer Service, AI, and Employment

It may seem that customer service agents will be losers as more of their work is automated and jobs become obsolete.

Although this might become reality, it’s not an immediate threat to most employees.

Like many industries, customer service will see changes in staffing. More efficient support operations will require fewer on-the-phone agents.

This could mean net cost savings or investment in better areas of customer support operations.

The Bureau of Labor Statistics estimates that demand for customer support representatives will grow about 5% by 2026, which aligns with average growth in other sectors.

What it does mean is that every member of the customer support team will have more time to focus on customer experience strategy, shaping interactions, and understanding customer needs.

In summary, individuals who previously held front-line support roles might be better utilized in creative or strategic positions focused on understanding the customer and shaping technology deployment.

The most immediate impact from AI reshaping customer service is the need for employee retraining and a shift in team structure.

The Future is Already Here

While much of the data used here is forward-looking, it’s important to realize that much of the technology—or, at least the foundation—already exists in the marketplace.

Boomtown's software allows B2B support teams to utilize the power of AI, bots, proactive service, and omnichannel support. This technology is available today, and competitors may already be using or developing strategies that provide them with a significant market advantage.

It can seem daunting, but AI strategy is critical to the future of business.

The future is already here - it's just not evenly distributed

The important thing for firms is to identify opportunities and build a strategy around these trends now. It will become increasingly difficult for firms to catch up, and those that start early with AI will reap the greatest rewards in smarter, better, and faster service.