Among all the applications of artificial intelligence (AI), customer service is one of the most common. Companies, both big and small, have been using tools like AI customer service bots and voice assistants to handle customer requests and algorithms to improve product recommendations and user experiences.
With the introduction of ChatGPT, AI is advancing faster than ever. The implications for customer service are far-reaching. As such, chatbots can provide customers with quick and informative answers, helping them faster than humans can and allowing companies to save money on labor.
In this look at AI in customer support, we'll discuss the current state of artificial intelligence, explore several examples of AI in customer service, and see what the future of AI in customer service looks like.
What is AI?
What is AI?
At a basic level, AI refers to the ability of computers and machines to perform tasks that normally require human intelligence. One of the most common applications of AI is machine learning, which enables computers to teach themselves through mathematical models and by receiving new data.
Machine Learning
For example, machine learning is the process that allows Meta Platforms' (META -0.31%) Facebook to block nude images and Netflix (NFLX -1.56%) to know what TV shows to recommend. In customer service, it can also help chatbots learn the best response based on different customer queries.
Other forms of AI include natural language processing, which underpins large language models like ChatGPT, as well as robotics, computer vision, voice recognition, and neural networks. These technologies demonstrate the reach of AI applications beyond machine learning. Many of these technologies help deliver the benefits of AI in customer service.
5 applications
5 applications of AI in customer service
Here are some of the most common ways companies are using AI in customer support.
1. Customer service automation
Automation is one of the most common applications of AI in customer service. If you've contacted a company online, you've probably encountered some form of automation through a chatbot or another channel.
Whether used by retailers, airlines, or other types of businesses, automated responses help companies handle low-hanging fruit and easy-to-resolve problems without involving human agents. Automation tools also ensure that customers will get a response, even when a human agent is unavailable, and they help eliminate the risk of human error.
Automated processes can also identify leads through customer queries, setting them up for marketing contacts, and assist with customer service. Many companies offer AI-powered customer service platforms, including Pegasystems (PEGA -0.3%), which uses tools such as natural language processing and intelligent chatbots to provide customer support and guide human agents.
2. Chatbots
Chatbots overlap with automation in AI, but there's more to them than just automation. Chatbots help supplement human customer service agents by being available 24/7 and handling basic queries, such as those typically found under an FAQ.
Chatbots
These bots can also be integrated across multiple platforms, including popular messaging interfaces such as Meta's Facebook Messenger and WhatsApp, as well as Salesforce's (CRM -0.51%) Slack. A chatbot can also help introduce a new brand to customers, providing preemptive customer service to a specific group of consumers, such as new parents.
One example is BabyCentre UK, a division of Johnson & Johnson (JNJ 0.24%), which has launched a chatbot on Facebook Messenger to help answer parents' questions. Johnson & Johnson was an early adopter of AI in customer service; Johnson & Johnson Vision launched a virtual assistant named Andy in 2018.
These tools can also give customers a more refined experience after purchase. Nike (NKE -1.16%), for example, uses chatbots on Facebook and other social media platforms to give customers a more personalized experience, recommending products that best fit their needs and tastes.
Marriott International (MAR 0.26%), the hotel giant, also uses chatbots to ensure customers can get customer service 24/7, and Marriott's chatbot also has relevant information about customers' preferences based on past interactions. That allows the company to give tailored recommendations in a way that a human customer service agent might not be able to.
3. Voice assistants
Another popular AI tool for providing customer service is voice assistants. Perhaps the best-known voice assistants are Apple's (AAPL -1.41%) Siri, Amazon's (AMZN 1.76%) Alexa, and Alphabet's (GOOGL 1.49%)(GOOG 1.58%) Google Assistant, which all offer customer service for the companies that make them and those that connect with them.
However, consumers encounter AI voice assistants in other ways, including over the phone. For example, start-up tech company PolyAI offers conversational AI voice bots that can handle customer queries over the phone. PolyAI says its technology enables companies to reduce labor costs, increase their capacity, and generate additional revenue.
The technology is based on AI components, like speech-to-text, natural language understanding, intent detection, and context. Basic voice-bot tasks include call routing and making bookings and reservations. Because voice technology requires AI to understand spoken language, developing a functional voice bot is more challenging than creating a chatbot, which operates on written text.
4. Sentiment analysis
These days, chatbots can not only converse with humans but also detect the tone based on the words being used. That can inform how the chatbot handles the request. For example, it may respond differently to an angry customer than to a calm one. If a customer is angry, the bot may avoid taking any action that could further escalate the customer's emotions.
Grammarly, the AI grammar and spell-checker, offers a good example of sentiment analysis in practice. Its tools will provide feedback on how your writing sounds, such as formal, direct, or inspirational.
IBM (IBM 1.54%) Watson is a suite of AI products that use natural language processing and machine learning to analyze emotions. Watson helps to provide a clear picture of customer attitudes.
Those kinds of tools can also help inform how a human responds in a customer service email, since they'll likely want to sound friendly and helpful. That makes them valuable for bots and human customer service agents alike.
5. Machine learning in customer service
Although machine learning is better known for its role in AI applications, such as recommendation algorithms, it also plays a role in customer service. For example, it can generate a targeted marketing campaign based on demographics or a certain kind of customer profile, as well as block credit card transactions that appear to be fraudulent.
Machine learning helps AI agents better predict customer needs and become more efficient, allowing them to handle some customer requests entirely on their own.
It also improves customer service by analyzing support tickets to identify areas where the customer experience needs improvement and can help inform content available on a company's website, such as an FAQ list, so customers can help themselves before contacting customer service.
Related investing topics
Will AI revolutionize customer service?
AI has already significantly transformed customer service. It's become standard to at least be greeted by some form of AI when contacting a company. The Biden administration introduced a new rule that would make it easier for customers to speak with a human when needed. However, companies will likely continue investing in AI, especially since it's unclear whether this regulation will still be enforced.
Going forward, AI is almost certain to become an even more valuable tool in customer service. There's a natural impetus for businesses to use AI in customer service, as it provides customers with faster and sometimes better service. It also saves money on labor and avoids the other hassles of hiring and staffing human employees.
If you're looking into AI stocks, there aren't necessarily pure-play AI customer service stocks available. However, you should consider investing in AI exchange-traded funds (ETFs) or AI chatbots or look into investment opportunities around ChatGPT, all of which provide a range of ways to gain exposure to AI.
In customer service and other applications, AI will almost certainly see rapid growth over the coming years as it continues to disrupt customer service.
FAQ
AI in customer service FAQ
How is AI being used in customer service?
Artificial intelligence is being used in customer service in many ways. For example, AI chatbots help supplement the work of human customer service agents, and voice assistants can handle customer questions over the phone.
What is an example of AI in customer service?
One popular example of AI in customer service is the application of sentiment analysis chatbots. These chatbots can not only have conversations with humans but also detect tone based on the phrases being used. This can help businesses assess how their customers are feeling about their products and services.
What is the future of AI in customer service?
The use of artificial intelligence in the future is likely to continue growing within the customer service industry, as AI applications can often provide faster service than humans at a lower cost.
