How Will AI Improve Customer Experience in 2023?

Sudeep Srivastava October 26, 2023
ai in customer experience

Artificial Intelligence (AI) is no longer sci-fi. There is a reason AI in customer experience has been the point of discussion since OpenAI’s ChatGPT launched in November 2022. It has manifold use cases in businesses across industries, enhancing user experience and driving innovation.

It is not just ChatGPT; customer service chatbots and personal assistants, like Siri and Alexa, are equally getting popular in recent years. What is exciting about these generative AI solutions is their potential to provide personalized service, marketing, and customer experience.

It is why businesses across industries are prioritizing personalization as their chief marketing strategy. For instance, Home Depot, Starbucks, JPMorgan Chase, and Nike have publicly announced that personalized customer experiences are at the core of their enterprise strategy.

AI-enabled customer service can truly transform business operations and unlock significant value for the users, drawing a virtuous circle of enhanced service, increased engagement, and higher satisfaction.

Unsurprisingly, AI is transforming businesses across verticals with its ability to deliver high-quality content in real time. According to an Accenture report, AI can increase corporate profitability by 38% by 2035.

The Impact of AI on Profits by Industry

Also Read – A Comprehensive Guide on AI Integration in Business Processes

Let’s delve deeper to understand how AI customer experience solutions are revolutionizing global businesses.

84% of marketers leverage AI capabilities for enhanced customer experience

Why Should Businesses Focus on Customer Experience?

“Customer Experience is the new battlefield” –  Chris Pemberton, Gartner.

With people understanding the difference between User Experience and Customer Experience, the latter term is becoming the key to unlocking unparalleled opportunities in the business Market. It has become essential to understand your customers and plan a marketing strategy to give a personalized experience. Thus, AI in customer experience is becoming imperative to gain higher success in the marketplace.

And it can be clearly proven by the following statistics:-

Stats providing the urge to focus on Customer Experience

Now, as we have taken a glance at why to focus on customer experience, let’s discover where AI stands in all of this. What are the benefits of AI in customer experience management strategy?

Role of Artificial Intelligence in Customer Experience

We are now at the point where AI can help companies understand, redefine, personalize, and optimize their journey. To help you understand the powerful role of Artificial Intelligence in customer experience, here are some AI use cases in customer experience. This list of use cases would give you a good taste of what’s possible today by implementing AI in customer experience and how it could be leveraged tomorrow.

Benefits of AI in Customer Experience

1. Know Your Customer

The first and foremost reason you should use AI to improve customer experience strategy is that it serves you with ample real-time user data. AI-driven technology such as NLP(Natural Language Processing) helps you gather and analyze user data in real-time and, in this way, enables you to remain familiar with the change in their behavior and expectations.

2. Simplicity, Efficiency, and Productivity

Another reason to rely on AI-enabled customer experience is that it adds simplicity, efficiency, and productivity to business processes. The technology, in the form of Chatbots and self-driving software, automates repetitive processes, which means the efforts and time required for performing repetitive tasks half.

63% of people don;t know they are using AI driven services

It also gathers and analyzes data in real-time to help you introduce the features and concepts that they want and in the way they wish to interact with. Moreover, the inclusion of AI in quality assurance helps you to design an innovative mobile application with a higher scope of efficiency and simple structure. Besides, these AI-powered bots and platforms perform most of the routine work and give the workforce an opportunity to perform other productive tasks. 

3. Better Decision Making

Artificial Intelligence is also acting as the right companion for business in terms of the decision-making process. The technology looks into the user interaction history as well as the current market trends, which makes it easier for businesses to predict the future. It eventually provides them with clarity of what feature/functionality to introduce in their business solution to gain huge momentum in the market.

4. Streamline Purchase Process

In the present scenario, various customers add products to their cart but never proceed due to slow loading, complicated checkout process, and more. Artificial Intelligence, in this context, helps understand the challenges faced by the customers and deliver a seamless shopping experience – something that aids businesses to lower down app cart abandonment rate

5. Fraud Detection

One of the prime uses of Artificial Intelligence in finance, healthcare, retail, and other industries, in terms of customer experience, is that it helps detect fraud. The technology, using its potential to gather, store and compare user data in real-time, is making it easier to identify any change in the users’ actions. Thus, helping with taking timely preventive measures against fraud..

6. Customer Analytics

Artificial Intelligence also shows remarkable significance in customer data analytics. The AI customer experience solutions and platforms simplify the process of gathering a heap of user data from different sources and arranging them effectively as per the key factors.

Furthermore, Artificial Intelligence is making it possible to predict the context of user interactions and build better customer engagement strategies by leveraging the right use cases of the technology and data insights.

Also Read: ThoughtSpot raises $248 M in Series E round to speed up AI-driven data analytics process]

7. Self-Service

Many customers these days prefer doing everything on their own rather than hiring an agent or taking help from any machine. This is yet another reason why implementing AI in customer experience is becoming the need of the hour.

Artificial Intelligence provides valuable insights into where customers get stuck and what doubts/queries make them connect with your support team. Using these insights, you can provide users with some options or FAQs that give them a feeling that they have found the solution to their problem on their own.

8. Visual, Text, and Voice engagement

AI-powered platforms also provide the opportunity to deliver optimal customer experience to the targeted audience based on their voice or facial expressions.

The technology, using Facial recognition and Virtual assistants, makes it easier to understand the users’ emotions and sentiments at any particular time and identify ways to deliver an instant positive effect through offers or refunds, etc., such that businesses gain long-term profits.

9. Predictive Personalized Experience

Lastly, AI makes it easier for startups and established brands to analyze the user interaction history and predict their next move. Hence, using these insights, businesses can provide the users with a perfect marketing offer. And in this way, gaining higher customer engagement and profits.

According to a report by McKinsey, successful personalization can lead to 20% higher customer satisfaction, 20-30% employee engagement, and 10-15% sales conversion rates.

It is all about importance of AI in improving customer experience in general.Let’s determine what technology means to different business verticals and their customer experience efforts in 2023 and beyond. 

Also Read: How to create an AI-powered customer service platform like Zendesk.

Different Industries Leveraging AI in Customer Experience

Looking for some real-world AI customer experience examples? You don’t have to look far; here is the depiction of some industries and leading companies relying on AI-driven customer experience to enhance their service, marketing, and growth strategy.

1. Retail

When discussing industries that AI is transforming, the first business domain that comes into the limelight is Retail. 

The technology, using a heap of transactional data and machine learning, makes it possible to track and analyze customers’ behavior and purchase history. This, in turn, helps businesses determine when and what promotional offer/message to be delivered to get customers’ attention and, thus, gain higher ROI.

Clear evidence of the impact of AI in retail is that, as per a survey of 400 retail executives by Capgemini, it was highlighted that the technology would save around $340B annually for retailers. The survey also revealed that the use of Artificial Intelligence in Retailing customer experience has resulted in a 9.4% increase in customer satisfaction and a 5.0% decrease in user churn rate.

An example of how brands are focusing on the usage of AI for bettering customer experience can be seen in Nike’s acquisition of Celect for predicting users’ shopping behavior. Also, Amazon, with its AI-powered virtual assistant, Alexa, is revolutionizing the way customers interact with their devices and make crucial decisions.

Amazon Alexa

2. Healthcare

AI is transforming healthcare in different ways – with customer experience at the top. 

The technology is proving to be the nervous system of the healthcare user experience ecosystem by making it easier to analyze the patient’s health history and come up with medical treatment (or surgery) that offers higher chances of success. 

It also helps healthcare organizations provide the best assistance to every patient in the form of Virtual Nursing assistants. Thus, taking care of everything – from notifying about the medicine intake timings to sharing real-time health data with the corresponding doctors.

An impact of this is that the AI healthcare market is predicted to value around $188 billion by 2030, increasing at a CAGR of 37% from 2022 to 2030.

AI in the global healthcare market size from 2021 to 2030

3. Mobile Banking and Finance

Artificial Intelligence is also revamping user experience in mobile banking and finance apps. The technology, in the form of Chatbots, provides 24×7 assistance to users and helps them determine the right financial plan for themselves. It also detects and lowers the risk of fraud in the processes, ultimately resulting in better customer engagement and retention rates.

For instance, PayPal leverages AI to analyze transaction patterns, identify fraudulent activities, and protect customers from potential security breaches.

4. Entertainment

AI and its subset, ML, in customer experience are leaving no stone unturned in delivering personalized experiences in the entertainment industry. Clear evidence of which is Netflix. This leading entertainment platform gets a clear idea of the user’s behavior, needs, and expectations, thus showcasing personalized options on the screen. It is improving the customer retention rate as well as boosting customer loyalty – eventually resulting in higher profits.

Partner with us to build an app like Netflix, Gully Beat

Artificial Intelligence is helping various industries revamp customer experience in one way or another. But will these AI trends in customer experience continue to dominate the industries in the future also? Will AI be a part of the customer experience in the upcoming years?

Let’s look into what AI customer experience solutions hold for the future:

Future of Artificial Intelligence in Customer Experience

“AI is now available to completely redefine how quality management works,” – Ball, Analyst at Forrester Research.

The AI market has grown exponentially in the past few years. Over 1,500 companies, including Microsoft, Google, IBM, and Amazon, have invested their efforts into developing next-gen apps for delivering higher customer experience.  And many more are expected to join the bandwagon soon to boost productivity and reduce the time and cost involved. Let’s understand the future impact of AI on customer experience through the statistics shared below.

Why Should Businesses Focus on Customer Experience

Unsurprisingly, AI in customer experience will revolutionize the future of the business world in numerous ways, such as:-

  • AI-powered customer experience will automate routine work and encourage the human workforce to focus on creative things. It will empower them to pay attention to their vision and not to every minor detail of production.
  • AI and ML in customer experience will also leave a significant impact on connectivity networks. It will encourage the idea of pattern analysis to troubleshoot any problem and pull out important user information from multiple channels to quickly and effectively get an idea of what users need.
  • Above all, conversational AI for customer experience will also put the practice of gaining biased data to an end, eventually resulting in a better quality of information gained.

Steps to Use AI for Delivering Better Customer Experience

Not sure how to implement AI into your customer experience strategy? To help you out, in this segment, we will discover the steps businesses can take to leverage AI to improve customer experiences.

Steps to Use AI In Customer Experience

1. Design a Customer Experience (CX) Strategy

Before looking into how AI enhances customer experience, it is necessary to have a clear understanding of your CX vision and strategy. So, bring your team on board to discuss your ‘CX-based’ expectations and ways you follow to meet those expectations. And, based on the insights gained, create/update a robust Customer Experience strategy.

2. Plan and Analyze User Journeys

Right from discovery to pre-sales, sales, customer support, and beyond, a user connects with your brand at different touchpoints and platforms. So, invest your time and effort into getting a comprehensive knowledge of all those connecting points, and deliver an AI-based omni-channel customer experience.

3. Have a Clear Understanding of AI Solutions

The first step of AI project management lies in understanding that AI in improving customer experience can be used in different forms, such as Recommendation engines, Virtual assistants, Predictive search engines, Computer vision, Sentimental analyzing tools, etc. However, not all can be the right fit for your business needs and expectations. So, the next step to employing AI in customer experience optimization is to determine what all forms of technology can be integrated into your business model.

4. Decide Whether to Create/Buy AI Solutions

When talking about how to use AI for customer experience, the next step is to determine whether to integrate AI into your existing application or invest in a pre-made CX/AI solution. 

Here, the former one will be the right option for your business if you have a well-qualified in-house team or have a partnership with a reliable artificial intelligence services company. Going with the latter option can be a profitable deal when you have less time to develop an application and the vendor understands your customer issues, and has the caliber to focus on critical points.

5. Track and Measure Success

You should not take the backseat just after incorporating Artificial Intelligence in your CX strategy. It is imperative to keep a watch on key performance indicators (KPIs) and metrics to track the success ratio of integrating AI in customer experience. And hence, improve your strategy for a better future.

Also Read: Key Metrics to Evaluate Your Chatbot’s Performance

Leverage the full potential of AI with Appinventiv

Transform Your Customer Experience with Appinventiv

Embracing AI in customer experience has become indispensable for businesses in today’s digital landscape. The transformative impact of AI across industries has prompted organizations to continually enhance their digital assets with this emerging technology.

So, if you are ready to leverage AI to improve customer experience, Appinventiv can be your trusted tech partner. With our expertise in AI development services and deep understanding of customer-centric strategies, we help organizations streamline processes, personalize interactions, and deliver exceptional customer experiences.

With a team of 300+ AI and ML experts, we have successfully delivered more than 200 AI-driven projects across industries, such as YouComm in healthcare, Mudra in finance, JobGet in recruitment, etc. Our skilled developers excel in integrating AI and other cutting-edge technologies during app development, resulting in intuitive designs and customer-centric features that resonate with users’ needs. 

Partner with us to build best-in-class AI products and witness the power of AI in customer experience.

FAQs

Q. How AI Can Improve Customer Experience?

A. Artificial Intelligence, with its power to gather and analyze customer data in real-time, helps get a better understanding of customer behavior and needs, which leads to enhance customer experience. AI can improve customer experience in multiple ways, including automating repetitive tasks, optimizing processes, streamlining the shopping experience, reducing the risk of fraud, delivering personalized marketing schemes, and so on.

Q. What are examples of AI applications in customer experience?

A. AI helps revolutionize customer experience through various mediums. Some examples of AI applications in customer experience are as follows:

  • Chatbots and virtual assistants
  • Voice assistants
  • Predictive analytics
  • Image and video recognition
  • Sentiment analysis

Q. How to start using AI to improve customer experience?

A. There are five steps to start using AI for customer experience:-

  • Design a Customer Experience (CX) Strategy
  • Plan and Analyze User Journeys
  • Have a Clear Understanding of AI solutions
  • Decide Whether to Create/Buy AI Solutions
  • Track and Measure Success

Q. How will AI impact customer experience?

A. AI can impact customer experience in the following ways:-

  • It will encourage users to focus more on their vision and creativity, rather than looking into minor details of production.
  • It will turn the ‘One Click’ experience to ‘Zero Click’, providing target audience with a quick and seamless experience.
  • It will improve connectivity networks.
  • It will encourage the idea of gathering and employing unbiased society data and deliver quality to all.
THE AUTHOR
Sudeep Srivastava
Co-Founder and Director
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