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Customer Experience

AI And Customer Experience: More Than Just Chatbots

A woman sits at a laptop with digital icons floating around her to indicate the interaction of AI and customer experience.

AI and customer experience are already working hand-in-hand, and there’s plenty more to come.

In a world marked by vast uncertainties, one thing appears certain: artificial intelligence (AI) is destined to transform everything from government to national security to entire industries.

That certainly holds true for customer experience. AI’s potential for improving experience is so vast that consulting firm McKinsey & Company calls the technology “the next frontier of customer engagement.”

An examination of AI customer experience examples – known as use cases in technology parlance – shows that businesses and brands are not waiting for the AI future. Already, they are harnessing AI’s power “to augment customer interactions, streamline business operations, and ultimately bolster overall customer satisfaction.”

In industries ranging from financial services to football, executives are taking advantage of AI’s capacity to collect huge quantities of consumer data, analyze and anticipate customer needs, and make personalized recommendations that can drive engagement.

AI’s influence now extends far beyond the chatbots that many companies employ to virtually assist customers, extending to technologies including machine learning, predictive analysis, and robotic process automation.

Generative AI Leads The Way

Generative AI – algorithms such as ChatGPT that can create content such as text and videos – in particular is a “disruptive technology that has a proven impact on content development and customer experience,” according to Gartner, an influential IT research firm and consultancy.

Starbucks has taken notice. With its AI platform known as Deep Brew, the coffee giant has created “an exceptional customer experience” by analyzing customer tastes, offering personalized suggestions and promotions, and optimizing everything from staffing to inventory.

So has the NFL, perhaps the ultimate national embodiment for communal experience with each year’s Super Bowl. The powerful sports league has partnered with industry to create a “digital athlete,” using AI and machine learning to better understand how players can stay healthy and perform better on the field.

With the best players potentially more likely to remain in the game, Amazon Prime Video is improving fan experience even more with a series of AI-powered enhancements to Thursday Night Football. One of the improvements, called Prime Targets, uses machine learning to show which receivers are in the best position to catch a pass and convert a first down, allowing fans to read a developing play in real time “just like a quarterback.”

Related: Amazon Increases Price of Prime Membership; Should You Care?

A Game-Changer For Customer Experience 

In keeping with the sports metaphors, we’re in the second inning of generative AI out of a nine-inning baseball game. We all have to keep in mind that while it is immensely powerful and it is an absolute game changer, it’s only going to get better, more efficient, and more accurate.

It is already doing some amazing things in terms of personalization, solving issues and finding the answers to questions a little bit faster.

“Personalized customer experiences have unequivocally become the basis for competitive advantage,” according to the Harvard Business Review. “Personalization now goes far beyond getting customers’ names right in advertising pitches, having complete data at the ready when someone calls customer service, or tailoring a web landing page with customer-relevant offers. It is the design target for every physical and virtual touch-point, and it is increasingly powered by AI.”

The prudent approach is that technology should not be looked at as a replacement for humans; it should be looked at as a complement to them. So one goal, for example, should be to make customer service agents better at their job and therefore create a better experience for customers.

That’s opposed to “let’s try to get rid of our human customer service agents and have our customers only interact with the computer.” The reason that fails is that most customers don’t want that.

AI And Customer Experience Began With Chatbots

The first successful AI program dates to 1951, when a British researcher designed a computer program that could quickly play a complete game of checkers.

The technology has obviously advanced rapidly in recent years, especially Generative AI.

For customer experience, AI initially often meant the chatbots that Forbes described in 2017 as becoming a “viable customer service channel.”

But it was a rocky start.

As I shared in my book, The Experience Maker:

A client asked me to talk about a great chatbot experience, so I started doing some research. Using a chatbot, I ordered flowers from a well-known national company that none other than Facebook founder and CEO Mark Zuckerberg had lauded for its Facebook Messenger experience.

The ordering part was great. I got to view a bunch of arrangements, select the one I wanted, and see the pricing. It was more or less like the chatbot holding my hand through the ordering process on the website.

Then after I selected “The Delightful Daffodil” bouquet, it gave me three date options on which they could be delivered. Unfortunately, I wanted none of the dates.

I couldn’t figure out what to do, so I typed “Help” into the chat. The bot figured that out and replied with, “What are you looking to do? Start over? Keep going? Or talk to support?”

I typed, “Talk to support.” Then the bot said: “Customer service is closed.”

So I thought: Why did it offer me the choice of talking to support in the first place?

Then it really got weird, because apparently customer service wasn’t closed. From “Samantha”: “Hey, Dan. I’m Samantha, a live agent. How may I help you?”

Now I was really confused. So I wrote back to Samantha, at which point the bot replied, “What would you like to change?” and gave me three options. Then Samantha also replied.

Suddenly, I was talking with the bot and Samantha at the same time.

It started off as a pretty easy interaction—I wanted to order flowers, which is a basic task. But when I ran into trouble with the date and I needed to talk to a human, the whole experience fell apart.

Newer Impacts of AI on CX

Today, chatbots remain important for helping companies answer customer questions and automate routine and simple tasks, though some firms reacted to their development by mistakenly eliminating Customer Service departments. A human touch is always vital, too.

But as AI tools have evolved, it has become apparent that they can help improve customer experience in more varied ways.

Experts say AI’s ability to automate more mundane tasks improves experience by freeing up executives and other employees to focus on customers and more creative endeavors.

By sifting rapidly through enormous amounts of data, AI algorithms can use predictive analysis to understand and anticipate consumer behavior. This helps businesses discern individual preferences and personalize marketing accordingly.

The technology can benefit customers in others ways as well, like helping to set competitive price ranges that focus on discounts and preventing fraudulent transactions.

Use Cases For AI And Customer Experience

Companies and brands in a variety of industries are taking advantage of the technological march by using AI to enhance customer experience – and improve their bottom lines.

In the events industry, some professional speakers use generative AI to help customize their keynote descriptions to a specific industry. The result is that seemingly broad topics appear to be more personalized for each specific event.

Since service providers generally can’t be experts in every industry, this is a great way to customize an offering, using industry lingo for example, while keeping essentially the same service.

Here are some other use cases for generative AI in CX:

  • Amazon utilizes a famed AI-driven system that makes personalized product recommendations based on purchase histories, customer feedback, and other factors. “It’s as if you walked into a store and the shelves started rearranging themselves, with what you might want moving to the front,” said one technology blog. The e-commerce giant has also begun including messages with certain products such as “Most customers keep this item.”
  • Cosmetics retailer Sephora uses AI for the Sephora Visual Artist, which utilizes virtual reality technology to offer virtual makeovers – “all without stepping foot in a store.”
  • Brinks Home, a smart-home technology business, worked with an AI startup to test thousands of combinations of marketing language and offers. The Harvard Business Review reported that the company was able to “optimize service-call scheduling, help cross-sell recommendations from call center reps, and conduct customer outreach for wireless system upgrades,” allowing Brinks Home to “personalize every consumer touchpoint.”
  • Disney uses AI and machine vision to analyze the facial expressions of audience members at its shows and films – and then employs the data to refine performances and “create more engaging entertainment experiences.”
  • NVIDIA, an AI pioneer, has introduced cloud-based, interactive avatar virtual assistants to “intelligently converse” with customers and provide recommendations, “enhancing the customer service experience.” One review praised NVIDIA for “creating and simulating digital humans” that can be used in applications including customer service – but also noted that the avatars “lack emotional intelligence and empathy, which is essential in sensitive or complex customer interactions.”

The Future Of AI And Customer Experience

Even with its enormous potential, generative AI faces customer experience challenges because empathy is one of those core human traits that is going to be difficult to replicate perfectly.

Ultimately, the way to keep this sense of humanity is to keep the humans engaged. That might mean having a human at the ready in case a customer needs to speak with somebody. But it also means making sure that the humans are constantly monitoring the AI.

In other words, the technology is not perfect – but it holds unbelievable promise.

Most importantly, it is here to stay, so we need to be along for the ride.

In the end, AI has so many positive and game-changing applications that it can’t be ignored – but neither can the focus on the customer.


The italicized portion of this article is an excerpt from The Experience Maker book, used with permission.  Photo: Adobe Firefly using AI.

For more: Customer Experience Predictions For 2024