Lessons from Sci-fi: How to succeed with AI in customer experience

What is an AI customer experience?

Artificial intelligence (AI) customer experience is the process of using machine learning, data analytics, chatbots, and other forms of AI-powered technology to improve and personalize interactions between a business and its customers. 

The goal of AI for customer experience is to improve customer service, engagement, and overall satisfaction by better understanding and responding to consumers’ needs. It’s like traditional CX efforts, only with more powerful tools.

How does AI for customer experience work?

AI can process huge volumes of data quickly using machine learning technology (ML) and large language models (LLMs) such as GPT-4. This enables AI to interpret human language and generate a relevant response to any customer input in seconds. Capable of automated and personalized interactions at scale, AI customer experience software can be used to deliver a variety of timely, tailored, and responsive services that more effectively meet consumers’ needs.

For example, research from IBM shows that AI chatbots can handle 80% of routine support tasks and customer questions, and cut costs by up to 30%.

AI’s data-processing capabilities also enable you to collect, analyze, and leverage customer data. Machine learning can provide insights into user behavior, preferences, or product usage, helping you optimize touchpoints, drive lead generation and scoring, or deliver targeted ads.

Why is the AI customer experience important?

Customer experience is a key battleground for businesses as they try to differentiate themselves, and many now use AI to gain or maintain a competitive advantage. 

One study found that 31% of consumers say they have higher expectations of CX than they did a year ago. People expect their favorite brands to offer the latest services and conveniences — free shipping, anyone? — or they may shop elsewhere. 

With AI in customer experience, you can provide 24/7 tailored experiences and support across channels to boost customer loyalty and satisfaction without adding to labor costs.

12 ways AI can improve your customer experience

AI has introduced many upgrades to the omnichannel CX, so it’s no wonder that businesses of all sizes have leapt to adopt it. With AI spending forecast to reach $243 billion by 2025, here are the most popular ways we’re currently seeing AI improve CX.

1. Provide instant 24/7 customer support at scale

People expect fast customer service across a variety of channels, which can be a challenge for businesses — especially at scale. Unsurprisingly, a recent survey shows that the most common way businesses use or plan to use AI is for customer service.

AI chatbots can provide instant responses to customer queries on your website or mobile app around the clock, even holidays. These always-on digital support agents use conversational AI to engage in natural, human-like conversations with users to answer common questions or provide product information and content on demand.

When a complex issue arises, AI chatbots can seamlessly route customers to human agents while gathering context and information to ensure a swift resolution.

Whether you’re a growing business or a global enterprise, chatbots are a form of AI customer service that give customers a quick, convenient point of contact for queries. This helps you reduce wait and deflection times while increasing resolution rates and customer satisfaction scores (CSAT).

2. Anticipate customer needs

If you’re looking for customer insights, AI can help you understand and predict your audience’s needs using a combination of machine learning algorithms, data analytics, and predictive modeling.

With its robust processing capabilities, AI can be used to identify patterns in customer behavior — frequent purchases, preferred products, browsing times — then segment customers into groups. By training predictive models on historical datasets, AI tools can forecast future behavior and trends with high levels of accuracy to improve decision making.

AI can also feed data and insights to customer engagement tools such as your customer relationship management (CRM) platform, support software, or business communications platform. With a deeper understanding of customers, you can deliver a more tailored and cohesive experience across channels that drives engagement and retention.

3. Power personalization

AI can make personalized recommendations to customers, helping them find the products, services, features, or content most relevant to them.

For instance, platforms like Netflix use AI to analyze users’ historical data, demographics, and browsing habits before recommending content. AI also enhances Netflix’s search functionality, using natural language processing to anticipate common phrases and quicken query input, as well as deliver more accurate search results.

In eCommerce, AI virtual assistants and chatbots give tailored suggestions to help customers find what they want faster without poring over product listings. One study found that 20% of all user intent for virtual assistants is connected to product discovery.

AI-driven personalization can also present returning visitors with targeted offers or cart abandonment reminders. These techniques can improve CX in the near term, while increasing purchasing and customer loyalty in the long run.

4. Resolve issues faster

Timeliness is key in customer service, and AI chatbots are often faster to provide answers and support content than human agents. Of those surveyed by Zendesk, 51% of consumers say they prefer support from chatbots when in need of immediate help. 

Integrating AI chatbots into your mobile app or website lets customers skip the wait for a support agent and get answers fast, helping to reduce ticket volume and increase CSAT scores.

AI for customer service can also include AI-powered callback queues that quicken phone support. Interactive voice response (IVR) systems with conversational AI can suggest a callback request or engage in full human-like conversations to help with troubleshooting or common issues, alleviating frustration and improving phone support for higher rates of customer satisfaction.

5. Enhance security

Machine learning can detect, prevent, and respond to cybersecurity threats and fraudulent activity faster than traditional computers. Unsurprisingly, more than half (51%) of AI-ready companies say they are using AI for cybersecurity and fraud management.

With its robust pattern-recognition capabilities, AI can monitor and identify unusual activity that indicates security threats in real-time. Improved accuracy and response times allow you to be more proactive with cybersecurity measures, and ultimately protect against a wider range of threats. It also reduces the chance of costly and embarrassing false positives.

Critically for CX, AI security tools allow you to create a safer environment for customers that fosters trust and loyalty.

6. Streamline the customer journey

AI can help you optimize key touchpoints across the omnichannel customer journey — website, mobile app, email, social media, and more.

Top of funnel: Virtual assistants and chatbots can engage visitors with content and product suggestions to help them find what they want without poring over service listings. While assisting, AI collects data for lead generation, segmentation, and scoring efforts.

Mid funnel: For returning visitors, AI can generate personalized landing pages, content, and offers based on demographic data or engagement history, guiding consideration and boosting sales.

For service-based businesses, AI chatbots can offer self-serve scheduling right in your mobile app or website. Among healthcare providers, for example, this is a valuable convenience that leads to greater customer success and loyalty.

Purchasing: By identifying friction points with AI-powered analytics, you can remove obstacles to purchase and reduce cart abandonment to drive more sales.

Post-purchase: AI chatbots provide customers with immediate help for order tracking and basic product support, then prompt customers for feedback on how to elevate the experience.

7. Prevent churn

AI can track and analyze customer sentiment across the omnichannel customer journey, helping you spot at-risk users and give them immediate attention to mitigate churn.

AI combines natural language processing with sentiment analysis — a technique that tracks keywords and emotions in customer interactions to categorize feelings and behaviors – to identify users likely to churn. Effectively, this enables accurate, real-time sentiment tracking at scale, allowing you to jump into action before users leave for good.

Sentiment analysis can also analyze customer feedback to discover areas of improvement. It analyzes reviews, social media mentions, and other inputs to deliver an accurate picture of where customers are getting stuck, helping you remove friction and streamline CX to better retain customers.

8. Automate software testing

Developers can automate and improve the process of evaluating their software functionality, performance, and reliability with AI.

AI testing tools automate the process of testing APIs, mobile apps, and web apps. They use defect analysis and machine learning to predict problem areas in code based on user interactions. AI can then prioritize and automate test cases based on the chance of defects, and even fix the broken test cases automatically.

Faced with fast-paced release cycles, developers can use AI testing tools to ensure quality releases, continuous improvement, and reliable security without growing their to-do list.

9. Offer responsive self-service

Self service is a vital piece of digital customer support. According to James Dodkins, CX Expert at Pegasystems:

“Generative AI has allowed businesses to turn 'self-serve' into 'self-solve' for many customers. Businesses can present information to customers accurately and contextually, and it has guided customer service reps on calls, making interactions fast and frictionless to overall streamline and simplify many experiences.”

AI-powered knowledge bases, for example, can provide customers with quick answers, relevant content, or full tutorials on command. Generative AI — which creates high-quality text, images, and other content as prompted — can offer ongoing assistance by providing new content and responses to customers as long as they need it.

For instance, Uber Eats is releasing a generative AI chatbot that suggests dining options based on users’ location, preferences, and budget.

10. Guide shoppers

AI-powered assistants can proactively help customers find the information they need to complete a purchase. Smart assistants are conversational AI trained on your knowledge base and first-party data to engage customers at key points in their journey. Use cases for AI assistants include:

• Marketing: Initiate conversations with visitors, collect data, generate leads

• eCommerce: Make tailored product recommendations, close sales

• Customer service: Answer questions intelligently, increase deflection, make seamless bot-to-agent handoffs

Like an always-on emissary for your brand, a virtual assistant helps you make a great first impression with customers and seamlessly guide them along the path to purchase.

11. Reduce employee burnout

Support reps awash in tickets may struggle to provide the best customer service. With AI customer service software such as AI chatbots and AI virtual assistants, you can free support agents from mundane tasks that sap time, energy, and productivity. For example, chatbot workflows can handle repetitive tasks and answer simple inquiries, helping reduce reps' daily workload, prevent burnout, and ensure more timely and effective support.

12. Increase operational efficiency

AI for customer experience can automate a range of repetitive tasks to enhance efficiency, cut costs, and free employees to focus on high-value work. One study found that 54% of businesses saw greater efficiency and lower costs after implementing AI.

AI tools save time and money in a variety of businesses departments:

• Marketing: Generative AI accelerates the creation of high-quality content

• Sales: Predictive AI boosts the efficiency and accuracy of lead scoring and segmentation

• Operations: Inventory optimization with AI can prevent out-of-stock scenarios

• Support: AI chatbot workflows reduce ticket volume and resolution times

• Security: AI analytics cut down on security incidents

• DevOps: Automate software testing to ensure quick, quality software releases at scale

AI customer experience examples

To help inspire your own efforts, here are five examples of leading brands using AI for customer experience to great success.

1. Amazon: AI personalized product recommendations

Amazon is an online marketplace that pioneered AI-driven product recommendations. The AI algorithm analyzes factors such as customer behavior, search queries purchase history, as well as larger buying trends site-wide to present shoppers with an entire homepage of personalized recommendations. According to rebuyengine.com, 35% of Amazon's sales are due to personalization, and more than half (51%) of those shoppers are more likely to purchase in the future.

2. Redfin: AI virtual assistants for real estate

Redfin is a real estate platform that uses an AI virtual assistant to automate and accelerate its response times to customer queries. The Ask Redfin service uses an AI assistant to responsively provide users with listing information, local market conditions, and touring availability.

As part of their shift to digital-first customer service and communications, Redfin contacted Sendbrid in search of AI for customer engagement — specifically, a business communications platform complete with APIs for AI virtual assistants, chatbots, and in-app chat.

Sendbird’s AI assistant and chat functionality help to streamline CX so much that Redfin saw 93% of users return to the app within a week.

3. Starbucks: AI customer experience and marketing

The Starbucks app uses predictive analytics and machine learning — a tool dubbed “Deep Brew” — to suggest product pairings, personalize suggestions, and target cross-channel marketing.

The app’s AI considers granular factors: purchasing history, location, time of day, even the weather. By offering an AI customer experience attuned to real-life, Starbucks keeps app engagement up while driving high average order value (AOV) and customer loyalty.

4. Airbnb: AI for search optimization

Airbnb is an online marketplace whose success hinges on presenting users with a curation of relevant, delightful travel experiences via its search function. Airbnb’s AI-powered search algorithm uses machine learning and predictive analysis to weigh factors like price preferences, previous stays, and trip duration before serving users with an array of ideal lodging options. AI also generates the homepage content, dynamically serving up listings that drive conversions.

5. Healthcare: AI chatbots for customer support

AI chatbots are increasing the quality and accessibility of customer support in many industries, including healthcare. Recently, a healthcare provider (that wishes to remain anonymous) came to Sendbird for help improving their in-app customer service. To enable a more tailored, personal mobile app service experience, we suggested our in-app chat API and AI chatbot for healthcare.

“With our new app, [patients] can take their phone and start chatting immediately with one of our healthcare professionals,” said the company co-founder and practice manager. Sendbird’s AI chatbot was trained on customer data to dynamically answer FAQs to improve service outcomes, while automated chatbot workflows helped with agent efficiency. In the end, adding an AI chatbot allowed the healthcare provider to double their response speed to customer inquiries.

The future of AI in customer experience

Artificial intelligence and customer experience are increasingly intertwined, and AI is expected to play an even greater role in CX in the future. Here are a few ways AI is anticipated to enhance CX going forward.

AI as an operating system

It’s been said that the next internet (internet 3.0) could use AI as an operating system, effectively infusing AI into every touchpoint on the internet. This would make AI chatbots and virtual assistants as well as AI customer service the new normal in digital CX.

Immersive AI experiences

AI could redefine what’s possible for immersive, interactive experiences that connect with customers on a deeper level. For example, augmented reality (AR) and virtual reality (VR) could allow shoppers to literally see themselves in a new pair of shoes, or how a blue couch would look in their apartment.

Personalization at scale

AI is advancing the trend of personalization in CX, able to analyze sentiment, personalize content, and orchestrate journeys at once. With AI tools proliferating, even small businesses will soon be able to gather, structure, and transform their data corpus into actionable insights that drive sales and loyalty.

Emotion AI

One day, AI may be able to understand how you’re feeling by evaluating your tone of voice or facial expressions. Already used for text and voice recognition, artificial intelligence with ‘emotional intelligence’ promises to engage customers on a more empathetic level.

Precision marketing

Quantum computing and deep learning are still in the works, but represent a potentially massive uptick in AI’s processing power. Imagine if you could collect and structure all your customer data in minutes, train your AI tools on that data within the hour, then leverage those insights in the afternoon. The possibilities for targeting, personalization, and campaign performance are the stuff marketing dreams are made of.

Greater expectations

With AI adoption climbing, CX quality is expected to reach new heights — and push customer expectations even higher. With data-driven, personalized experiences set to become table stakes, businesses without AI for CX will fall behind on customer success and satisfaction.

Ready to add AI to your customer experience?

Though we’re still a ways off from talking golden androids, AI is rapidly transforming customer experience for the better. It allows you to be more attuned, tailored, and responsive to customers as they seek support, shop, or browse products and services. Going forward, artificial intelligence and customer experience may become inseparable, giving businesses that use AI a big leg up on their competitors.

If you want to add AI to your app experience, you can start building an AI chatbot or smart assistant for free with Sendbird. You’ll get 30 days of Sendbird free when you create a free account and start building AI into your CX.