smiling customer service agent
Explore & Thrive with AI AI customer service

How will Customer Service change with AI?

Understanding how Customer Service will evolve in the AI-era.

And how startups can use this as an opportunity.

Importance of Customer Service

The aim of Customer Service as a business component is to ensure satisfaction. Businesses realize that things are not always perfect, and problems may arise at any step of the business. To handle customer complaints and ensure that customers are satisfied, Businesses employ empathetic listeners, and empower them to actually be able to solve the issue.

Customer service is often thought of as a cost center - a department that is considered necessary for the business, but does not directly generate revenue - instead, it incurs costs. The costs it incurs are that of personnel, technology, and facilities.

It is notable that Customer Service is already one of the most outsourced processes - Functions such as call centers, chat support, and email management are often outsourced to provide 24/7 support, handle high call volumes, and reduce operational costs.

Also notable is another fact - the kind of people hired in customer service. Most companies hire recent graduates with minimal work experience for customer service roles for several reasons: cost, easy trainability, empathy due to fresh attitude and morality.

We have already discussed that the kind of jobs AI will automate first are those which require minimal training. Customer Service business process will attract more and more automation over the coming years.

Today Customer Service is done by humans = costly and non-scalable. So today, focus is on empowering Agents - so that lesser number of agents are able to handle all the tickets.

But AI disrupts this completely. AI is essentially free, and scalable. So focus will shift to making AI systems able enough to be handle tickets all by itself, with escalation to humans only as a last resort.


Overview of current customer service automations.

Customer Service used to be in-person, via face-to-face interactions. Personal skills, relationship building used to be important skills in this field. Problem was that human time spent in personal interaction is not scalable.

With increasing technology, better automation started to be used. Telephone and mails started to be replaced with live chat and email, both of which could include elements of automation using IVR and ticketing.

But automation in Customer Service was still limited, since pre-AI technology was not able to provide proper intelligent and personalized solutions. But with AI, you can expect a disruption in customer service, with bots becoming powerful enough to be able to solve many more cases now, which were not possible earlier. The technology that has changed is in being able to communicate personally with customers at a scale AND being able to understand their problems in detail and take actions specific to each one.




So we're heading towards a new era, one where customer service process isn't optimized for matching customers with available agents, it is to empower your business bot to solve most problems by itself, with humans used only as a last resort. The focus is now on integration of all the solutions with the AI bot.



Customer Service is considered a cost center, and ripe for complete automation by AI.


FAQ

Frequently Asked Questions about AI in Customer Service

What is AI and how will it be used in customer service?

In 2023, after decades of being a non-performing novelty, AI has finally shown that it has reached a stage where it can be relied upon. In business, today AI can be used to make business decisions independently (our BizBot Decisions API is an implementation of that!). In customer service, AI can be used to completely automate the processes of customer support - which are treated as a cost center by businesses, and are often outsourced to reduce costs, or handled by lowly trained fresh graduates. Pre-2023, there was no reliable way to automate them, but now AI will disrupt the process by automating it completely, and relying on humans in only the rare cases. Thus, AI will disrupt customer service by making it almost costless.
How can AI automation Disrupt Customer Service?

In the AI-first era, when competition is tense, every business would try to optimize for customer lifetime value (LTV) using AI. One of the most impactful ways to increase LTV is customer service, and getting repeat orders. Also, it is an area where AI can excel at - helping a customer in distress is a very powerful way to enhance a relationship (excellent User experience), and deepen the understanding of your customer - his needs, motivations and expectations from your business. So customer service generates repeat sales, data and customer insights - all of which are either goals or inputs for better functioning of your BizBot.
Why will Customer Service be most impacted by AI Automation?

Today Customer Service is done by humans = costly and non-scalable. So today, focus is on empowering Agents - so that lesser number of agents are able to handle all the tickets. But AI disrupts this completely. AI is essentially free, and scalable. So focus will shift to making AI systems able enough to be handle tickets all by itself, with escalation to humans only as a last resort.
How will AI change Customer Service Business Process?

No more calls required! Since AI will be able to handle 99% of customer service requests - and learn from the 1% it didn't figure out the first time - in the future, companies will stop giving a toll-free number to talk to a human (or in the even further future, use an AI to handle the toll-free). Instead, users will be redirected to a customer service business bot on their website. This will be a huge cost saving for companies, and will also lead to better customer satisfaction, since the bot will be able to handle all requests 24/7, and will be able to learn from its mistakes.
What are the benefits of using AI in Customer Service?

AI will completely automate customer service, which will lead to the following benefits:
  • Cost reduction: AI will push Customer Service costs to near-zero
  • 24/7 availability: No need to outsource around the globe now.
  • Scalability: AI can service thousands of clients at once.
  • Data: AI converts Customer Service from a cost to Insights acquisition system
  • Personalization: AI can personalize responses based on various data points
  • Customer satisfaction and loyalty: This is the main KPI that AI optimizes for! This need to be done in context of individual customer voice / behavior.
What are the challenges of using AI in customer service?

AI is still in its infancy, and a completely automated customer service system requires atleast a good amount of customer data. That said, the first wave of AI automation in Customer Service will be about empowering the AI to be able to call (resolution) functions based on (decisions) customer requests.
Will AI replace human customer service representatives?

For the last 100 years we are in a technological trend that fewer people can do far more stuff - increasing efficiency. AI is also such a technology - it empowers people to do more. So, in the case of customer service, if today a company needs 500 customer service reps, in the future, they will need 20. But those 20 will still be needed to handle any complicated tasks that the AI is not able to handle. So, AI will not replace humans, but it will reduce the number of humans needed to do the same work.
How can I prepare my company for the rise of AI in customer service?

We would advise you to actively lay the foundation towards an AI-first future, and take active steps, considering the ROI of AI customer service. Contact us to learn more about how our customer service BizBot can help you.
What are some best practices for implementing AI in customer service?

The following are the steps:
  1. Create a proper knowledgebase of all (customer service) cases, and train the AI to be able to understand the proper resolution from the customer description.
  2. Empower your AI by integrating with (resolution) functions, so it can actually resolve complaints by itself
Why would AI-driven businesses focus on exceptional Customer Service?

Customer Service leads to customer loyalty and satisfaction, which leads to repeat business - which is often more profitable than new customers. When the AI is tasked with maximizing business profitability, one of the lowest hanging fruits is to provide exceptional customer satisfaction, particularly when it is AI-driven and costs almost nothing. And in the AI-first era, when competition is tense, every business would try to optimize for customer lifetime value (LTV) using AI, since it is one of the most impactful ways to impact customer LTV, which directly affect profits.
Why are AI bots particularly suited to provide exceptional customer service?

Helping a customer in distress is a very powerful way to enhance a relationship, and deepen the understanding of your customer - his needs, motivations and expectations from your business. AI can do a multi-variate analysis and generate a real-time outcome, helping generate repeat sales, data and customer insights - all of which are either goals or inputs for better functioning of an AI Business Bot.

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