2023 was the year when Artificial Intelligence became the next big thing. That’s why McKinsey & Company dubbed it the breakout year for Generative AI. 

The explosion of AI has impacted every corner of the business world, and customer service is no exception.

Working in customer service is widely known for its stress. It has been recognized as one of the world's top 10 most stressful occupations, according to the American Psychological Association. 

AI can enhance customer experience by expanding self-service options and tackling major industry challenges such as employee burnout and inefficiency.

But how exactly? 

Continue reading to discover 8 ways to use AI customer service and the reasons why you should.

8 ways to use AI to improve customer service

With the growing number of AI-powered apps, businesses are discovering diverse and innovative ways to implement AI in customer service. 

Here are some of the best use cases of AI customer service. 

1. Chatbots

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Chatbots are computer programs that simulate conversations with users. They are trained on massive data of text and conversation history to understand natural language, answer questions, and troubleshoot basic issues. 

AI customer service chatbots are excellent at handling frequently asked questions using automated responses. These are common questions that many customers ask, such as return policies or shipping details. So, chatbots deflect a significant volume of customer inquiries and free up human employees to focus on more complex issues. 

AI powered customer service chatbots can also offer support in multiple languages. Hence, they break down language barriers and make it easier for international customers to get help. 

Duolingo's Max, for example, converses in several languages to help users learn and practice new languages while providing AI customer support.

2. Voice assistants

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Voice assistants are becoming increasingly popular in homes, with assistants like Amazon's Alexa or Google Assistant seamlessly integrated into our daily lives. 

AI customer service companies are catching up on them too, for round-the-clock, personalized voice assistance.

This AI customer service tool offers hands-free support that allows customers to get help without typing. It is especially useful for people who are busy or on the go. 

For instance, a customer can ask a voice assistant to check their account balance while driving. 

Voice assistants can be integrated with other AI tools to enhance their capabilities. For example, they can work with chatbots to provide a consistent customer service experience across different platforms.

And the fact that AI voice assistants are getting more realistic with natural-sounding voices, pauses, and inflections, this can provide much more personalized service to customers 24/7.

3. Sentiment analysis

Sentiment analysis is essentially a fancy term for AI's ability to scan data and grasp the emotional tone and attitudes behind it. The data can be anything from customer reviews and social media comments to emails and chat conversations.

AI powers sentiment analysis by using algorithms trained on massive amounts of data. It identifies emotional cues within language, like the use of certain words or phrases.

When customer service representatives understand the emotions behind customer messages, they can tailor their responses accordingly. 

A frustrated customer might need a more empathetic approach, while a happy customer might appreciate a more upbeat and conversational tone. 

4. Hyper-personalization

Hyper personalization is a step beyond traditional personalization – past purchases, browsing history, preferred communication channels, etc. – to tailor every interaction to the individual. 

AI can analyze vast amounts of customer data and identify patterns that would be impossible for humans to keep track of. 

If a customer frequently visits a particular section of your website, AI can flag this interest. Customer service representatives can then use this information to offer tailored recommendations or support.

You can also use AI to segment your audience into very specific groups based on their behavior and preferences to send highly targeted marketing messages.

5. Predictive analytics

Predictive analytics involves using historical data, machine learning, and statistical algorithms to predict future outcomes. 

In customer service, predictive analytics anticipates customer behavior, preferences, and needs based on past interactions and data patterns. 

The process helps you suggest relevant products or services to your customers. 

For instance, streaming platforms like Netflix use predictive analytics to recommend movies and shows based on your viewing history. 

Yes, that’s why you see recommendations for similar romantic comedies right after you finish watching one. 

AI can also predict when a customer is likely to churn or encounter a problem by analyzing customer feedback and support tickets. 

6. AI-powered CRM

A CRM system is essentially a digital filing cabinet for all your customer data. 

AI powered customer service CRMs automate various workflow processes, such as ticket routing, follow-up reminders, and task assignments. 

When a customer submits a request, the AI customer service CRM system automatically assigns it to the most suitable agent based on expertise and availability. 

With AI, customer service reps have all the information they need about a customer at their fingertips. It results in faster response times and less time wasted searching for details. 

You can also build your custom CRM using Formaloo with a higher degree of customization to solve complex customer issues. 

7. Quality assurance (QA)

In customer service, quality assurance (QA) ensures that interactions between customers and service representatives are helpful and efficient.

AI can automatically monitor and evaluate customer service interactions using Natural Language Processing. 

It understands the content and tone of the interactions to identify key issues and track compliance with company policies. 

You can also use AI to assess the performance of customer service representatives. 

Track relevant metrics, such as response time, resolution rate, and customer satisfaction scores, and use the data to provide targeted training and support to your teams. 

8. Call center management

Traditionally, call centers relied on human agents to handle every interaction. But AI is now streamlining this process, which allows agents to focus on more complex issues.

AI can analyze customer inquiries using a combination of speech recognition and natural language processing. 

Let’s say a customer calls about an internet outage – AI understands the keywords and routes the call directly to the appropriate agent equipped to handle the issue. It reduces wait times and ensures customers reach the right person the first time.

If a call center is in a busy environment where ambient sounds can interfere with the conversation, AI customer care tools can filter out background noise to better understand customer intent. 

Now that we know the uses of AI in customer service, let’s look at some of its benefits.

Benefits of using AI in customer service

Using AI in customer service offers many benefits that can greatly improve how businesses interact with their customers. 

Here are some of them: 

• Around-the-Clock Support: Brick-and-mortar stores have closing times, but AI doesn't! Chatbots powered by AI answer basic questions and handle simple requests 24/7. They ensure that customers always have a first line of support, no matter the time zone.

• Faster Resolution Times: AI can answer frequently asked questions such as needing to know your order status and troubleshoot basic issues in seconds. It eliminates wait times for simpler queries. Companies using AI for customer service to handle customer service inquiries save an average of 2 hours and 20 minutes daily, as per HubSpot.

• Happier and More Productive Agents: AI customer service isn't replacing agents, it's empowering them. It takes care of mundane, repetitive tasks and ultimately, leads to increased job satisfaction and improved agent productivity.

• Cost Savings: AI-powered chatbots and virtual assistants handle simple inquiries, which frees up human agents for more complex issues. This reduces the need for additional staff and results in the long-term cost savings.

• Improved Customer Satisfaction: Faster response times, 24/7 availability, and personalized support – these all add up to a more positive customer service experience. Satisfied customers are more likely to return and recommend your business to others.

Here’s how Formaloo AI can help

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Formaloo AI is a suite of cutting-edge tools that enables businesses like yours to deliver exceptional customer service. 

Its advanced analytics dashboards leverage AI to dig valuable insights from customer feedback, surveys, and conversations so businesses can refine their strategies based on real-time data.  

Besides, you can also build a custom CRM that perfectly aligns with your unique customer service workflows. 

The platform also allows you to create custom chatbots that handle routine inquiries and basic troubleshooting. And to top it all, building your own AI customer service system does not require coding at all. 

Get started with Formaloo today.