5 Ways Artificial Intelligence Can Benefit Customer Experience (CX)

Customer Experience (CX) is a topic of discussion mostly in the corporate business world in this era. It refers to a customer’s comprehensive perception of a brand throughout his journey, starting from navigating the website to getting the desired product. So each activity of an organization during the customer journey has a strong impact on the customers’ perception and their decision to repurchase the same brand. In the remitting growth and success of any industry, loyal customers play a profound role. A loyal customer not only remains hooked up with the brand himself but also advocates and promotes it through a free sort of advertisement called Word of Mouth Marketing. Research has proved that acquiring a new customer involves 25% more expenses than retaining the current customers. The loyalty of a customer can be achieved by delivering an astounding customer experience. Oracle conducted a global study revealing that 74% of senior executives consider customer experience the most significant factor in achieving customer loyalty.

Many business studies have revealed that the customers who enjoy an excellent customer experience with a brand are 3.5 times more interested in repurchase and 5 times more prone towards recommending it to their relatives and friends than if they had a negative experience. A study published by Temkin Group revealed that companies with earnings of $1 billion per annum can earn about $700 million additional within three years by investing in customer experience. That means a boost of 70% in revenue within three years. Gartner survey has proved that U.S and U.E customers hold the belief that they value their experience more than the price. Therefore, the customer experience has become the precedence of many leading companies.

Artificial Intelligence (AI) – a roadmap to deliver Customer Experience

With every passing day, the planet is progressing towards a more digitalized era and artificial intelligence is leading this revolution by redefining many facets of the business. Research by NewVantage Partners concluded that the companies have started investing much more in AI than ever, based on the growing sophistication of technology. The main factor behind investing a huge amount in deploying AI is that the giant business leaders consider it a catalyst in improving the customer experience. As per research, the percentage of the companies that were devoting more than $50 million in artificial intelligence was just 39.7% in 2018, which has reached 64.8% in 2020. Microsoft reports that till 2025 almost 95% of the customer interactions will be carried out through AI-supported channels.¹

5 ways AI can benefit the customer experience

Keeping in view, the rapid evolution and enormous potential of artificial intelligence, many ambitious organizations are considering AI as a tool to revolutionize the company’s interaction with the customer. This revolutionized interaction ultimately results in winning the customer’s loyalty by delivering them the best experience. Hence, in a world of swiftly evolving technology and growing customer expectations, AI is an area that can proficiently benefit and improve customer experience in lucrative ways. A few of them are discussed as below:

1. AI-driven Personalized Customer Experience

Personalization implies using the customer data to present the customer with the most relevant information, offers, and recommendation. Consumers nowadays are so habitual to getting related and targeted messages that organizations need to be prepared all the time with the right relevant message to be sent to the right customer at the right moment. Here, Artificial Intelligence is used as a tool to provide an insight into each customer and assist in targeting them with their most likable offer and recommendation. This eventually leads to deliver the most personalized experience for the customer through a variety of channels. The predictive analytics of artificial intelligence enables the enterprises to offer the products and services to each customer based on the enormous data regarding the customer’s interests, his/her socio-demographics, and former interactions with the company. Just like social media YouTube and Netflix depend on the user data to recommend the related shows or videos you could like.

A study conducted by Accenture revealed that 91% of the customers have a preference for the brand that identifies, remembers, and reaches them with the offers and recommendations that are most related to their interests². The customers feel pleasure in getting personalized offers which make them feel pampered and prestigious. Amazon was among the initiators to offer recommendations to the customers based on their buying history and is now generating around 35% revenue by employing its recommendation engine. A company’s recommendation engine offers smart suggestions to the customers like what stuff to add to the shopping list, and which show to watch tonight. This recommendation engine driven by AI gives the company a competitive advantage.

Experian conducted data reveals that the emails with personalized subject lines have 26% more chances to get opened. Marketo conducted a global poll stating that 78.6% of consumers are more prone towards brand promotions only if they are exclusively customized to their past communications.³

Hence, AI supports anticipating customer needs and offering them the related preferences before the customers do it by themselves. With AI-driven personalization, the customers develop a feeling as if the product experience was customized just for them. This intensity of personalization not only wins the loyalty of the customer through relevant experiences but also endows the business/brand with the guarantee for greater conversions and eventually the success of the business. AI-driven personalization is just one out of many options that enables a brand to deliver a top-notch customer experience.

2. AI-powered Chatbots and Virtual Assistants

Many studies have revealed that the businesses with customer support teams who are too slow to answer the customer’s questions about a product or service are more likely to lose a potential customer due to late replies. It is believed that the customers feel great if their queries are answered within a second.

Artificial intelligence has however enabled businesses to overcome this risk of losing a customer, by introducing AI-powered Chatbots. These Chatbots reduce the human interaction with the potential or existing customers and help in delivering a positive customer experience. For instance, a company providing its services worldwide would find it hectic to provide and maintain continuous services to the customers as they belong to different time-zones. But AI-driven Chatbots have made this task easier by a non-stop 24/7 interaction with the customers. They furnish complete information about a product or service to the customers within seconds by replying to the customer’s queries.

Many industries like entertainment, banking, fashion, and healthcare are headed towards the use of Chatbots powered by AI as a mode of interaction with customers. It facilitates the customer’s interaction in real-time enabling the businesses to present the human sort of interactions to the customer without even dealing with the real human workforce. This eventually leads to a fantastic customer experience. In the banking industry, for instance, Erica- a digital assistant has been launched by the Bank of America. This digital assistant not only assists the customers in making payments and balance checking but also educates the customers about saving money.

Studies have revealed that out of the bunch of the things a business can do, Chatbots are the most significant thing in any company’s customer experience strategy. The Aspect Consumer Experience Index indicates that the percentage of consumers who consider Chatbots as the Future of the customer service is 61% while the %age of millennial reporting outstanding experiences using Chatbots is 70%. ⁴

The technological advancements are upgrading the Chatbots to rather more sophisticated software called Virtual Assistants, Virtual Agents, or Virtual Representatives. AI-powered VA is rather more complex and advanced having more skills as compared to the Chatbots. IBM Watson is a well-known Virtual Agent. Depending on provided training, a virtual agent can be employed to understand the customer’s intention, offer more personalized answers along with performing repeatable jobs. An advanced machine learning technique called Natural-Language Processing (NLP) is employed in VAs to sound more like humans, along with their predictive intelligence and analytical abilities to personalize a response. Virtual agents on account of the NLP technique, also have the aptitude to analyze the complexities of natural language, understand the state of mind of the client and adjust their responses keeping in view the response of the customer, whereas the Chatbots lack this ability. For instance, if an angry customer gets a message from Chatbot saying “Thank you and have fun”, the experience is depressing or negative for the customer, however, a virtual agent might understand that angry feeling of the customer, make an apology and interact him with a more serious response “I extremely feel compassionate the matter you’re facing and want to create it better”. Hence, with NLP, the AI-driven virtual assistants are getting more intuitive and understand the perspective of interaction just like humans. The VAs are getting the Chatbots to the next level and beyond. Studies have revealed that Chatbots and virtual assistants unambiguously can improve the customer experience.

PwC conducted a study discovering that almost 80% of American consumers believe that a positive customer experience owes to the rapidity, convenience, well-informed assistance, and friendly service⁵ which AI has made possible in the form of Chatbots and Virtual Assistants. At present, the customers don’t need to converse through a telephonic system or interconnected emails, rather they get the answers to their questions instantly through Chatbots and VAs.

3. AI-driven Predictive Analytics and Real-time Decisioning

Predictive Analytics refers to the use of a huge amount of data, arithmetical algorithms, and AI techniques to predict future trends or outcomes and behavioral patterns based on past data. This analysis, in turn, assists an organization in making the best decisions about the next plan.

For instance:

• Anticipating when the customer is going to open your email campaign, and then based on this prediction, emails to be sent to the customer when he is most prone to open it
• Predicting the customers who are planning to buy and then pushing them in such a way that they purchase eventually.

There is a certain reason for the customers to stick to a brand. Predictive behavioral analysis discovers that reason by understanding their needs, behavioral and buying patterns, and get prepared for the customer demands to meet them in the best promising way. Hence Predictive Analytics adds great value to deliver an exceptional customer experience. In Predictive Analytics, the customer’s behavior during the online sessions is evaluated e.g., the time he spent on a page or website, and the searches he carried out. Based on combined predictions, the organizations also highlight the customers who are most prone to churn and reach them with the promotional emails and put immediate attention to cater to their needs to retain them.

The predictive behavioral analysis also enables a marketer to forecast the lifetime value of a customer. Based on this prediction, the marketers finally decide the best line of action to attain the customer’s loyalty in the best possible way.

Today, a great number of industries are employing Predictive Analytics to deeply understand their customers and strongly believe that it will help in turning a loyal customer into a valuable brand promoter.

AI and predictive analysis together provide a deeper insight into what has happened already and what should be done in the future to excite a sale through relevant product suggestions. It results in not just making the customer experience more related and towards generating a sale, but also develop an emotional connection of the customer with the brand.

Retailers at present are also able to get precious insight into the behavioral preferences of the customers without even interacting with them directly. This has been possible by employing IoT-enabled technologies. For instance, Kodisoft developed a tablet called Kodisoft Interactive Tablet which is used by customers in restaurants to browse menus, place orders, and play games.^6,7This tablet has enabled companies to boost up customer engagement which is an important element in winning customer loyalty by providing a positive experience.

Real-time Decisioning is the ability of any organization to make decisions about operational preferences based on the most recent data. This Real-time Decisioning results in efficient marketing to the customers. For instance, it enables a brand to identify the customers using ad blockers and reach them with alternative user interface (UI) components to keep them engaged with their website. This ultimately turns the potential customer into a purchaser. Hence, the brands can reach the customer with the most relevant personalized products or services by employing AI and Real-time Decisioning.

4. AI-driven Visual, Voice search, and Virtual Fitting rooms

Artificial intelligence is now replacing text-based search with visual and voice-based search leading to more convenience for the customers as both are more user-friendly approaches. Many surveys have revealed that the reason behind this replacement is that it delivers the user a more personalized experience.

AI-powered Visual Search system lets the customer take and upload a picture of an object they are searching for, and then they come across similar products based on color, pattern, and shape. It also helps the customers who are not educated enough to describe a product in text, as they just have to take a snap-shot of the product they would love to buy. The object in the snapshot is identified by a platform powered by AI which helps the customers in buying their most loved products with more convenience.

The advanced technology of Image Recognition from Cortexica ensures 95% accuracy and 90% positive customer feedback has been recorded with the visual search results. The American Eagle’s IR technology employs Visual Search that apart from assisting the customer to get similar clothes also recommend them the other accessories that would go best with the dress.

Google Images and Pinterest Lens are among the most renowned Visual Search engines. What the potential customers have to do is just uploading a picture of the product they are most interested in buying on any of the visual search engines. The search engine by using the algorithms helps the potential customer in finding out the exact product or similar matches online. According to a report by Towards Data Science, the number of visual searches carried out on Pinterest alone is 600 million per month, and the %age of millennials who prefer to use visual search engines rather than any other digital technology for shopping is 62%.

Style Match is a visual search tool employed by ASOS which is considered a fashion giant in the retail industry. With this visual search tool, ASOS lets the potential customer take or upload the picture of their favorite product and then they present the customer with a list of similar products from their catalog. ASOS claims that the Style Match tool can match the desired product with more than 850 brands.

Many surveys and studies have revealed that with AI-driven Visual Search and Image Recognition, the customer is being entertained with a great experience. An AI startup company ViSenze reports that the ability to have Visual Search in a great online shopping experience is one of the main desires of 62% of Millenials.⁸

Voice Search: In the world of online shopping, AI-driven Voice Search technology has undoubtedly come a long way since the past two decades almost. Voice assistants like Alexa and Siri, from Amazon and Apple respectively, along with Google Assistant are now available in more than 119 languages on many devices. With this Voice Search engine, the customers have just to place a Voice Order of their desired item and can check its delivery status without typing anything. Alexa and Siri are not available just on our smartphones but have been designed separately as well for voice interaction. Amazon claimed that from the release of Alexa devices in 2015 to 2019, more than 100 million Alexa devices had been sold which proved the convenience of voice search shopping for the customers.⁹

Keeping in view the advanced trends, Wal-Mart- a leaping giant in the retail industry has launched a Wal-Mart Voice Order in collaboration with Google. Here the Google Assistant is employed to facilitate the customers to purchase their desired product through Voice Order while sitting comfortably at their homes instead of typing or visiting the store physically. Apart from Wal-Mart, Tesco, Costco, and many other gigantic brands are also employing AI-driven Google or Amazon Voice Search engine to transform the customer experience.

“Skill” – an Alexa app launched by Dominos Pizza lets the customer place a Voice Order for a slice of Pizza while PayPal has launched a payment feature which is Voice Activated powered by AI.

Virtual Fitting Room: A Virtual Fitting Room is an online try room that allows the customers to find the best outfit that perfectly matches all the elements of their body and is as fitted as they desire. This is a superb application using the artificial intelligence which saves the time of the customers and helps them in finding the best outfit within the shortest span.

Virtual Fitting Rooms got huge popularity during the COVID pandemic as instead of visiting a store physically and spending a huge amount of time on trying the clothes, you just stay at home and the scanner will scan your body and inform you whether the outfit is perfectly fitted or not. For instance, Me-Ality has a virtual fitting kiosk that can scan a person within 20 seconds and is capable enough to gauge 200,000 points of his body. Companies such as Levis and Brooks Brother have also installed these scanners.

5. AI-driven Smart Supply Chain and On-time Delivery

To deliver a positive customer experience, the speedy and on-time delivery of the customer’s desired product is crucial. In this era where the businesses, whether it’s a retailer or a manufacturer, are competing hard to deliver the most impactful customer experience, the role of Artificial Intelligence in creating a Smart Supply Chain can’t be ignored.

The Supply Chain and Logistics of any business involve a huge amount of growing data on daily basis, which triggers the need for more sophisticated computing techniques using Artificial Intelligence such as ML, DL, and NLP. The Supply Chain operations of any industry are getting Smarter as a result of Artificial Intelligence being employed. For instance, “Risk Chain” is an innovative attribute of supply chain management technology provided by Gravity Supply Chain Solutions. It analyzes numerous exterior data sources (such as weather or traffic etc.) to anticipate the impact of those exterior factors on the supply chain and manages to ensure on-time delivery by finding some alternative way to overcome the anticipated risk before time.

Apart from predicting about the external disruption, the Smart Supply Chain being Cognitive-enabled can also anticipate the need of the customers before even they realize by themselves. Hence depending on this forecast, an industry can maintain a handsome inventory for customers to ensure on-time delivery. For instance, the fulfillment centers of Amazon, anticipate the timeframe and location where the order is most expected to be placed, and based on this forecast, manage a handsome inventory and arrange the fastest shipping delivery. Microsoft is integrating the IoT technology of FedEx with the AI and ML capacities of Azure to improve inventory management and ensure on-time delivery with real-time tracking. With AI systems, the entire process of making online deliveries has become faster and smarter as the companies don’t have to depend on the manual efforts made by the workforce.

A new application of Artificial Intelligence includes Amazon’s Automation and Robotics. This AI application helps a warehouse in ensuring material availability by triggering the customer’s demand on time. It also helps in planning and making deliveries through Prime Air drone delivery that can make home delivery possible within a short period with accuracy.

AI helps a company in managing the inventory for the individual customers based on their behavior and buying patterns and eliminates the risk of losing a customer on account of wrong forecasts and stockouts. An effective marketing campaign and brand loyalty are the two main factors that compel the customers to visit a website but all these efforts go useless if the customer leaves the site without purchasing the desired product. Many studies have revealed that businesses lose a customer because of poor inventory management that results in missed sales leading to a negative customer experience. However, the software for supply chain management with integrated AI is evolving rapidly and being used in many retail stores to improve customer satisfaction. The AI-integrated Supply Chain Management software informs the business well in time which avoids the stockouts and ensures on-time delivery that eventually results in a positive customer experience. Reportlinker.com has the prediction that the market of AI integrated supply chain would grow annually at a rate of 25.08% between the year 2019 and 2025.

Final Thoughts

Businesses, at present, are completely aware of the enormous potential of Artificial Intelligence and at the same time also consider the great customer experience as the milestone in the success of their business. An organization can never design any marketing or customer experience strategy on account of just perception or intuition; rather they need the support of a huge amount of datasets. Dealing with such enormous datasets regarding customer history, sociodemographics, and interests along with buying and behavioral patterns is the worst nightmare for any customer-facing team.

However, Artificial Intelligence along with Big Data power has paved the way for an organization in developing strategies to improve customer satisfaction. Hence AI is projected to transform the customer experience through streamlined and seamless customer interactions via personalization, predictive analytics, and proactive approaches.

Gartner predicts that the worth of AI-integrated business will become triple that is almost $4 trillion by the year 2022¹¹, and the customer experience will have a fundamental impact on this growth. Accenture anticipates that by incorporating AI, the economic growth rate will become twofold by 2035¹². Another recent study by Accenture has revealed that 78% of organizations consider AI as a competitive advantage. That’s why businesses are incorporating AI at every stage of the customer journey to endow the customer with the most convenient and remarkable experience.

Cheers :-)