Artificial Intelligence (AI) -powered chatbots in customer services and support

Wednesday, 28 February, 2018

What Are Chatbots?

Chatbots – also known as “conversational agents” – are software applications that mimic written or spoken human speech for the purposes of simulating a conversation or interaction with a real person. There are two primary ways chatbots are offered to visitors: via web-based applications or standalone apps. Today, chatbots are used most commonly in the customer service space, assuming roles traditionally performed by living, breathing human beings such as Tier-1 support operatives and customer satisfaction reps. Conversational agents are becoming much more common partly due to the fact that barriers to entry in creating chatbots (i.e. sophisticated programming knowledge and other highly specialized technical skills) are becoming increasingly unnecessary.

Today, you can make your very own chatbot that you can use in Facebook Messenger, for example – all without a pricey Computer Science degree or even much prior coding experience – and there are several sites that offer the ability to create rudimentary chatbots using simple drag-and-drop interfaces.




How Do Chatbots Work?

At the heart of chatbot technology lies natural language processing or NLP, the same technology that forms the basis of the voice recognition systems used by virtual assistants such as Google Now, Apple’s Siri, and Microsoft’s Cortana.

Chatbots process the text presented to them by the user (a process known as “parsing”), before responding according to a complex series of algorithms that interprets and identifies what the user said, infers what they mean and/or want, and determine a series of appropriate responses based on this information.

Although chatbot technology is distinctly different from natural language processing technology, the former can only really advance as quickly as the latter; without continued developments in NLP, chatbots remain at the mercy of algorithms’ current ability to detect the subtle nuances in both written and spoken dialogue.

This is where most applications of NLP struggle, and not just chatbots. Any system or application that relies upon a machine’s ability to parse human speech is likely to struggle with the complexities inherent in elements of speech such as metaphors and similes. Despite these considerable limitations, chatbots are becoming increasingly sophisticated, responsive, and more “natural.”





Over the past few years, chatbots — the automated, human-like chat responders — have been more of an experiment, with limited adoption. Now, chatbots are becoming more mainstream as people see the benefits of those experiments, especially in customer service and support. Unlike human customer service and support reps, chatbots don’t have the physical and mental inconsistencies that can degrade service levels. Moreover, AI-powered chatbots are learning how to respond to customers and predict what they want. Based on customer history or questions customers ask during a chat session, AI-powered chatbots can ask users what they need and even ask leading questions, all to improve the support experience.

Reports and Markets defines Customer relationship management (CRM) is an essential part of every successful business. Today, more businesses are taking advantage of artificial intelligence (AI) in order to automate and improve their CRM. Advanced technologies, such as chatbots and AI-enabled communication, mean that around-the-clock interactions and customer service is now a reality. It’s a welcome one in a mobile-first world where people want access to information immediately and at the touch of a button. This means that businesses are interacting with their customers more, whether it’s through human-to-human interaction with a customer service representative or an automatically generated email drip campaign. All these touch points result in more data collection about customers. It also means that powerful technology is necessary to keep up.; from 2014 to 2015, the worldwide market value for CRM software grew 12.3 percent to $26.3 billion, and that number continues to increase, especially now that AI is integrated within the platforms that help businesses run. AI is revolutionizing the business world, specifically in terms of CRM platforms, and businesses must be on the cutting edge of this advancement in technology. It’s quickly and entirely changing customer service processes.

AI is revolutionizing the Face of Customer Service and Relationship Management

Artificial intelligence automates many processes that were once run solely by people. While some view this as a negative change, the reality is that AI can help reduce the workload of multiple staff members—and can often do it faster and more accurately. Vala Afshar writes, “AI allows companies to deliver these smarter, more personalized and predictive experiences that customers have come to expect, but the human touch is still table stakes for customer success.”

Reports and Markets the use of AI to that of the Industrial Revolution. Centuries ago, people were concerned that machines were taking over the jobs of humans, but ultimately the change advanced the country (and the world) for the better. While the implementation took years, in the end society improved. These benefits far outweighed the restructuring of jobs and changes in the workforce.

Without the Industrial Revolution, the world would not be as advanced as it is today, and without AI, which some experts are calling the fourth industrial revolution, society would not be advancing once again. According to David Kelnar, artificial intelligence “tackles profoundly difficult problems, and the solutions to those problems can be applied to sectors important to human well being — ranging from health, education, and commerce to transport, utilities, and entertainment.”



Automation is everywhere these days enabling users to accomplish a wide range of tasks – from ordering pizza, checking luggage at the airport, booking a hotel room, right through to booking a doctor’s appointment. And the customer service industry is no exception.

Advancements in technology continue to transform customer service interactions. By 2020, experts project that more than 85% of all customer interactions will be handled without the need for a human agent.

From improvements in loyalty and brand reputation to new revenue streams, the pathway to real-time self-service in customer service brings huge opportunities to forward-thinking businesses. This post outlines the 10 reasons why AI-enhanced customer service is the future of call centers.


Key Points:

• By 2020, 85% of all customer interactions will be handled without a human agent


• Resolving customer service issues before they arise could significantly lower customer abandonment rates


• AI, chatbots and automated, self-service technologies free up call center employees from routine tier-1 support requests so they can focus on more complex tasks 


• Pre-emptive action


• The rise of messaging applications


• You only have to train them once


• Customer service that’s always-on


• Reliable service, wherever customers need it


• Innovation with cost savings


• Need for speed


• Demand for self-service options


• Personalization is key


• Scalability with speed

1. Pre-emptive action
Automation can deliver a level of responsiveness that isn’t humanly possible. The Forrester report “2017 Customer Service Trends: Operations Become Smarter And More Strategic,” touches on the concept of pre-emptive customer service. The report highlights that “companies will continue to explore the power of intelligent agents to add conversational interfaces to static self-service content. They will anticipate needs by context, preferences, and prior queries and will deliver proactive alerts, relevant offers, or content. They will additionally become smarter over time via embedded artificial intelligence.”
Systems with AI embedded can monitor a nearly infinite amount of website and in-app activity for distress indicators, identifying customers experiencing issues and what those issues are. The system can respond in real-time offering support through FAQs or virtual service agents across platforms and devices.
The ability to resolve customer service issues before they arise has huge potential. It could significantly lower customer abandonment rates in the purchasing cycle, whilst simultaneously reducing customer complaints and improving consumer satisfaction.

2. The rise of messaging applications
In 2015, the number people using messaging apps overtook social media. Beyond communicating with friends and work colleagues, individuals are increasingly using messaging apps to interact with brands. Messaging services are a brand new space for organizations to connect with existing and future customers. Businesses now have the opportunity to create new revenue streams using real-time, customized customer service bots within messaging applications.
More than 34,000 chatbots on Facebook Messenger alone is a reflection of this opportunity. The airline, clothing and tourism industries are already leveraging this space. Consumers are connecting with brands through messaging apps to purchase airline tickets, book hotel accommodations and receive fashion advice. It’s only a matter of time before the other industries catch up.

3. You only have to train them once
Hiring and training staff takes time and money. In fact, on average, it costs $4000 or more to hire a call center service agent, and an additional $4,800 or more to train them. These costs can quickly grow with an increase in staff attrition, a common problem at call centers. Automation platforms can offer huge time and cost savings in this space. A platform like Watson as it comes pre-programmed with industry and domain knowledge. Better yet, you only have to train it once.
This is an exceptionally powerful feature when it comes to company process changes. Rather than re-train an entire workforce, you need only re-configure the software and a lot of it can be automated. Better still, these customer service platforms help free up employees from routine tier-1 support requests they’re tired of working on, so they can focus on the more challenging and creative tasks that support their customers’ complex needs.

4. Customer service that’s always-on
Automated customer service is not constrained by time zones or public holidays. This gives organizations the ability to deliver always-on customer service to resolve issues as soon as they arise. This means customers can have their inquiries resolved 24 hours a day, and don’t have to wait hours or even days for a response. This can greatly influence customer satisfaction and churn. It also shows that a company that is committed to supporting customers – which is valuable for brand reputation and trust.

5. Reliable service, wherever customers need it
Customer service powered by AI technology provides a level of reliability that cannot be matched by its human counterparts. Chatbots are free from many afflictions and biases that can negatively impact a customer interaction. They do not turn up to work late with a hangover. They can be designed to not get angry and argue with a customer. They don’t take matters into their own hands, and they can be programed to escalate calls to a manager if they cannot solve a customer query. All this helps improve the customer service interactions, which can have a huge influence on repeat business.
A recent Zendesk study showed that 42% of B2C customers purchased more after a good customer service experience, whilst 52% stopped buying after one bad customer service interaction.

6. Innovation with cost savings
New and innovative technologies can deliver advanced levels of service over conventional customer service at a fraction of the cost. A perfect example of this is call computerization solutions, which combine machine learning and advanced speech recognition to improve conventional interactive voice response systems, whilst delivering a 60% – 80% cost saving over outsourced call centers powered by humans.

7. Need for speed
The same Zendesk research survey we mentioned earlier in this post also showed that customers who received a quick resolution of their issue equated it with a good customer service experience. Digitization of customer service has the power to speed up issue resolutions, thus improving service satisfaction levels. Online FAQ content has the power to immediately answer a common query, and chatbots are not limited by typing or research speeds. These types of solutions are hugely powerful in driving customer satisfaction in the face of an issue.

8. Demand for self-service options
The way in which customer service interactions are resolved is already evolving. The majority of Millennials now avoid situations, which typically require a human interaction and prefer to have self-service options instead. A recent customer service study revealed that 72% of Millennials believe a phone call is not the best way to resolve their customer service issue. These tech-savvy Millennials prefer to solve their own customer service issues, turning to self-service solutions including FAQs, forums and online chat or bot services. With the next generation expected to be even more self-reliant, automated customer service technologies will be crucial in responding to these human-free, digital-only interactions.
Businesses that do not to adapt risk a failure in communicating effectively with the next generation of consumers which can negatively impact the customer journey and ultimately the business’ bottom line.

9. Personalization is key
Of the thousands of gigabytes of data that each of us will generate in our lifetime, it is estimated that almost 33% is actually valuable, and only if analyzed. Organizations collecting customer data can combine big data, machine learning and AI to deliver an unrivaled level of personalization throughout the customer journey. This can range from simple product recommendations based on past purchases, to websites redesigned in real-time to tailor to an individual customer’s reading level and browsing habits. Personalization can greatly improve the customer service interaction, promote consumer satisfaction, improve conversion to purchase, and drive repeat purchases.

10. Scalability with speed
These new technologies give businesses the power to scale their customer service at an unprecedented speed, even with limited resources. Upon launching a new product, businesses can release interactive FAQs, which can resolve thousands of customer queries without the need for human interaction. Chatbots empower businesses to respond instantaneously to a surge in customer inquiries, simply by switching on another sever.
With the help of AI and chatbots that continuously learn from every interaction, brands can rapidly transition into new geographic markets free from the limitation of employing and training staff that speak the local language.

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Category: Service & Software

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