Customer Service Trends: How Conversational AI Will Play a New Role


Ralf LlanasasContent Marketer

Friday, March 25, 2022

Around two years ago, when the first wave of the COVID-19 pandemic hit, the whole world stopped in its tracks. Everything was shut down to prevent the spread of the deadly virus. Restaurants, parks, schools, even entire business centers were brought down to their knees.

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Customer Service Trends: How Conversational AI Will Play a New Role
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During the panic, many businesses struggled to stay afloat. Since offices, customer care centers, business plazas and marketplaces became a health hazard, organizations of all kinds and sizes were forced to shift almost all operations online. To take better care, businesses should have paid special attention to their customer support team and department. Unfortunately this didn’t happen, which resulted in their contact centers being burdened with increasing amounts of traffic, which is why more and more businesses decided to invest in improved customer service systems and strategies.

One of the technologies that have made service provision easier and more efficient for organizations in recent times is conversational AI.

What is conversational AI?

Over the years, businesses have strived to provide the best possible after-sales support services to their customers. The customer service sector has evolved greatly from the basic contact center experience of having to call a given number and speak to an agent for query resolution. Today, many businesses have automated customer service and streamlined this process using artificial intelligence (AI), among other technologies and tools. One common application of AI in customer service is conversational AI.

Conversational AI is a domain that deals with the improvement of customer service provision using artificially intelligent text- or voice-based agents, thus minimizing interaction with human agents. AI-powered customer service agents are now capable of closely imitating their human counterparts. They can conduct complete human-like conversations with customers, ending in desired outcomes.

The technology incorporates concepts such as text-to-speech (TTS), machine learning (ML), deep learning (DL), natural language processing (NLP) and natural language interpretation (NLI). These concepts make it possible for machines to not only decode what the customer types or says, but also understand the context or intent according to each unique situation and respond accordingly. This technology has fully automated and streamlined customer service provision and thus made business processes efficient and cost-effective.

Some popular examples of conversational AI are Microsoft’s Cortana, Amazon’s Alexa and Apple’s Siri.

How does conversational AI play a crucial role for good customer service?

The use of conversational AI has brought along a horde of advantages for businesses. Here are three key benefits you can achieve regardless of the industry your business operates in.

Reduced wait or hold times

A lot of contact centers that employ human agents often overburden their staff by allocating multiple support chats or calls to a single agent. As a consequence, the wait time for each customer can be quite high. In cases of emergency, such as in the event of an app crashing, your human agents can quickly be burdened with an even greater load of incoming complaints. According to Hiver’s research, 37% of respondents describe a customer service experience as good when their issues are resolved on time. With a highly scalable virtual agent, you can eliminate queues as the agent can easily handle multiple support requests simultaneously, with no lag or hold time.

Improved brand loyalty

With a better post-sales support service enabling faster turnaround times, you can quickly achieve higher customer satisfaction scores (CSAT). These satisfied customers, in turn, will be much more likely to stay by your side for a long time, leading to stronger brand loyalty and higher retention rates.

Lower operating costs

To provide the best possible customer service, you would need to dedicate a certain amount of resources to your customer service department. The smooth running of a proper contact center requires hiring individuals who may require extensive training in order to successfully cater to every customer requiring assistance. A lot of customer service representatives also do not wish to pursue a career in this field long-term. They switch jobs within a short time, leading to repeated recruitment and training cycles.

With AI, you only have to make a significant initial investment into the development of an artificially intelligent agent. This digital customer service professional, when sufficiently trained, can reduce or eliminate the need for human agents. Thus, in the long run, you can save on recurring recruitment and training costs as well as office space.

How have AI-powered agents influenced various industries?

The use of AI to improve customer experience, along with other everyday business processes, is becoming increasingly common. Despite the challenges associated with AI, intelligent solutions are becoming more affordable for businesses of all sizes, encouraging even nascent start-ups to invest in conversational AI for various purposes.

Let's talk about the retail industry, for example.

The exceedingly competitive retail industry requires businesses to stay on their toes and cater to customers as quickly and efficiently as possible. In order to capture new markets and retain existing audiences, retail businesses need to constantly innovate. Conversational AI has helped these businesses achieve new levels of growth and popularity.

It feels like chatbots are now a thing of the past. We have developed much more advanced and intelligent systems to solve customers’ complex problems. Nowadays, conversational AI agents can guide customers through the entire purchasing process, from availability check and automated checkout to order inquiry, tracking and even real-time rerouting in case of unexpected delays.

With virtual agents that are ready to cater to customers 24x7, retailers are now highly available and approachable in real-time. Businesses no longer have to adhere to the traditional 9-hour window to serve their customers.

By interacting with customers directly, conversational AI-powered customer service agents have learned about customer spending patterns and areas of interest. This has helped businesses offer more personalized experiences and recommendations to their customers, leading to higher retention and conversion rates, respectively.

Experts have predicted that soon, conversation AI will not only become more scalable and efficient but also more proactive instead of reactionary.

Is conversational AI the future of customer service?

Gartner reports that there has been a 250% increase in the volume of inquiries handled by conversational AI agents. Based on previous patterns and data, the market for virtual agents and chatbots is expected to reach a value of around $14 billion over the next three years. Things are definitely looking up!

In the near future, it is expected that the use of virtual agents, especially voice-based ones, will become more commonplace as it becomes easier to train them to handle complex customer requests. There are two key factors that contribute to the success of conversational AI: better technology and a better understanding of the human psyche. Thus, further advancement in the field can only be achieved if we take both of these factors into consideration for the future development of AI-powered virtual agents.

Ralf Llanasas

Content Marketer

Ralf Llanasas is a content marketer specializing in topics such as automation, transportation and technology.


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