Should You Use AI to Improve Your Communication with Customers?

For decades, companies were trying to measure and improve the efficiency of their business development, sales, and customer service departments—namely, to speed up service and delivery, prevent out-of-stocks, identify business opportunities in a timely way, and create personalized customer experience—with the help of various business intelligence (BI) tools.

However, most businesses fail to use sales and customer data to the fullest, as they are overwhelmed with information, lack technology expertise, or simply resist transformation. It’s no wonder 82 percent of consumers have at least once left a company because of poor service!

But there is light at the end of the tunnel.

I’m talking about artificial intelligence (AI)—that is, software solutions capable of crunching tons of customer data down to actionable insights. Discover how your startup can benefit from using AI-powered tools for customer service.

What’s wrong with customer service today, and how can AI improve customer experience?

Alex Petland, a U.S. computer scientist and professor at MIT, has studied human interactions for more than 20 years, and arrived at a discouraging conclusion: call scripts, email templates, and instant messages only work up to a certain point. When nonverbal signals like emphasis and tempo kick in, they usually fall short.

Here are some stats proving the customer service industry needs a radical shake-up:

  • Poor customer experience costs U.S. businesses $75 billion annually
  • 96 percent of consumers never voice their complaints about bad service, and 91 percent of those simply give up on a company
  • 59 percent of Americans will try a new brand for a better customer experience

Where does artificial intelligence come in?

No matter how much you spend on a business coach, there’s always a chance a manager will wake up on the wrong side of the bed and mess up with a customer.

With smart algorithms, however, you can make your customer service on point and impersonal in a good way.

Customer service in the AI era

In 2014, only 67 percent of Americans said businesses were either meeting or exceeding their customer service expectations. This year, the number has reached 81 percent. And there’s another one: by 2020, 85 percent of customer interactions will be handled without a human specialist.

It can hardly be a coincidence.

Going back to Mr. Petland’s studies, it appears we can boil down a wide range of unconscious signals which can affect the outcome of business interactions to pure numbers and then feed the data to a neural network! Then we can incorporate AI algorithms to a CRM, website, or mobile app, and easily identify conversational patterns and behaviors which increase or reduce the likelihood of selling a product/service to a customer or leaving a lasting impression.

Wait, does that mean artificial intelligence has empathy and can—just like a knowledgeable psychologist—read people’s emotional energy?

While we humans often underestimate the impact of current life situation, upbringing, or cultural context when talking to someone (and almost never put ourselves in another person’s shoes), AI continues to evolve. Face ID can interpret the tiniest detail of our facial expression. Alexa understands and makes jokes. Heck, artificial intelligence can even guess whether a person is gay or straight based on a photograph with a 91 percent accuracy!

4 ways your startup can use AI to improve customer experience

1. AI chatbots

Running inside a brand mobile app, messenger, or on a company’s website, virtual assistants can answer customers’ questions, navigate them through online catalogs, and make relevant product suggestions based on their previous search and purchase history.

According to IBM, businesses can entrust chatbots up to 80 percent of routine consumer questions and thus reduce customer support expenses by up to 30 percent.

Having said that, 86 percent of consumers expect a chatbot to connect them to a human support specialist when it runs out of answers as the majority of virtual assistants available on the market are keyword-triggered linear bots with limited cognitive capabilities

2. AI-driven product recommendation engines

Similar to AI bots, recommendation engines make product suggestions based on customers’ shopping history and help users deal with information overload. 30 percent of Amazon traffic, for example, is driven by AI-powered recommendations.

What about smaller businesses that do not possess impressive research and development (R&D) budgets and infinite access to customer data which is required to train an AI-based product recommendation engine?

They can make use of cost-effective plug-and-play product recommendation tools like Recolize, Magevolve, and which can be integrated with a Magento, WordPress, Shopify, and other ready-made website content management systems.

3. Real-time AI conversational guidance platforms

With natural language processing apps like Cogito, workers can now evaluate customers’ speech rate and emotional state in real time and act accordingly. SaaS solutions such as IBM Watson-based Cognitive Customer Care might also be helpful.

4. Augmented reality (AR) apps that allow customers to try products before making a purchase

Well, that’s not exactly about customer service, but here’s my point: about 30 percent of all products purchased online are returned to stores. Add free shipping and returns and nice packaging here, and you’ll understand why most ecommerce businesses operate at a loss.

That’s why forward-thinking brands like IKEA and Sephora build augmented reality apps enabling customers to try furniture and makeup at home. What’s more, 40 percent of Americans admit they’ll spend more on a product if they get a chance to test it using an AR app.

How can a startup leverage the power of augmented reality to boost sales and decrease return rates? You’ve got two options here—that is, use a drag-and-drop AR app development tool like Appy Pie or address an app development company to build a custom one (it takes about one thousand developer man-hours to complete the task).

At this point, we can safely say the future of customer service is not exactly human. The question is, should your startup embrace the new technology, too?

Why make AI part of your startup’s customer service strategy?

Poor customer experience is the reason why 14percent of startups fail outright. It’s seven times more expensive to acquire a new client than to keep an existing one. Unless your startup has a solid customer base, you’ll never get funded.

Will AI-powered customer service tools really help you grow sales, improve service delivery, and subsequently retain more customers?

It really depends on your goals, growth strategy and target audience. The decision to invest in an AI-powered customer service tool should be preceded by a thorough market survey highlighting your customers’ preferences, the cost of implementing a 3rd-party solution (or building a custom one!) and ROI analysis. You shouldn’t forget that AI’s cognitive capabilities are still somewhat limited: even mature virtual assistants like Siri and Alexa often fail to make context-based decisions.

However, nailing your customer service increases your chances of survival in today’s competitive business environments. That’s exactly how the world’s biggest brands like Apple and Amazon became who they are now.

There’s no way to completely replace humans in customer service. There will always be the need for staff who are skilled at talked to and emailing with customers who have complex questions or who aren’t happy. The ability to communicate well with your customers isn’t yet something that you can or should outsource to machines. But AI can help your startup begin to leverage data and patterns so you make better business decisions about where to spend your money so your customers are happier and more loyal.

With artificial intelligence, startups manage to automate a good share of routine time-consuming tasks and devote more time to knowledge-intensive business processes—and this alone can give you a competitive advantage over your rivals.

Posted in: Customer Service

Andrei Klubnikin

Andrei Klubnikin

Andrei Klubnikin is Senior Content Manager at a R-Style Lab—a custom software development company with a business office in San Francisco, California, which specializes in the Internet of Things development. Andrei has been a tech blogger since 2011 and currently writes for,, StartUs, GameAnalytics, Mobile App Daily, SmallBizClub, etc.

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