The impact of AI on customer experience

What is the impact of AI on customer experience? We’ve written the definitive guide.

Read on to explore:

– The real-time revolution happening around us
– How businesses are keeping up
– The impact of AI on the customer
– The impact of AI on the company
– A view to the future


The real-time revolution

~ The smart spread ~

Think about what you’ve got in your pocket. No, not lint or pound coins. You’re sitting on your own personal portal to almost every piece of human knowledge ever created.

You don’t tend to marvel at it anymore, but your smartphone is a miracle. It’s home to a digital assistant that can answer your questions, organise your life and connect you to billions of resources right away. And it’s not just your mobile phone, every single piece of technology in your life is getting smarter. Your fridge can tell you when you’re running low on milk, your kettle can automatically boil when you wake up, your car can dial emergency services on your behalf, and you can order food by chatting to your smart speakers. You can even get an AI toothbrush that maps your mouth and gives you brushing feedback.

Today everything is connected, and we’re living with the kind of technology that used to be the stuff of sci-fi dreams. Take a step back and think about how fast and efficient everything around you has become, compared to twenty, ten, or even five years ago.


~ A look back at the past ~

Remember the days before the internet was readily available? In those days, you’d be reliant on CD-Roms like Microsoft Encarta to find out information, or you’d be headed to a trip to the trusty library. Before your phone had map services, you’d be stuck with an A-Z roadmap to get you from A to B, constantly pulling over to keep checking the static paper. And if you broke down, it would be the Haynes Manual you’d be consulting.

Even if you’re not old enough to remember that, you might still remember the painful days of slow internet, hefty instruction manuals for devices, and phones before Wi-Fi connection. We used to have to – shock horror – wait for things.  The internet was opt-in rather than opt-out, and to access it, you had to take pains to buy and install a series of different technologies.

Since then, a “real-time revolution” has happened. The real-time revolution is exactly what it says on the tin: it’s the phenomenon of everything around us happening in real-time. Like Siri answering your pub trivia question, or like Google letting you know when there’s been a delay to your usual route home.

~ The real-time revolution ~

The real-time revolution has made our personal lives easy, and it’s changed the way we interact with the world. Now, we all expect information to be available immediately. This, then, is the very first, almost subconscious impact of AI on customer experience: we’ve developed high expectations from technology. We expect our interactions with tech to be effortless, and anything slow or offering poor usability sticks out like a sore thumb.

While you weren’t paying attention, the real-time revolution crept up around you, and changed your life forever.


How are businesses keeping up?

~  Big boots to fill ~

So, our personal lives are getting easier. This now makes it harder than ever for businesses to impress us. If you can get slick, AI-driven experiences at home, you’ll also expect slick, AI-driven experiences in your interactions with businesses.

But that doesn’t necessarily mean businesses are delivering. We’ve all been frustrated, for example, by websites that still don’t load properly on mobile, by awful automated emails that aren’t at all relevant, and by painfully slow customer service.

However, it would be wrong to say that change isn’t happening. Businesses might not yet be able to serve you as quickly as Siri, but they are starting to get smarter thanks to technology. So, what kinds of technologies are brands using to keep up?

~ Chatbots ~

Firstly, there’s chatbots. At home you’ve got Google Assistant, and now online you’ve got bots. More and more businesses are deploying chatbots to their websites, offering customer service 24/7, 365 days a year.

Think about those painful days of yore where you had to pick up the phone to speak to a business. Even recently, you might find yourself landing in a mammoth FAQ section that takes forever to scan. You’re probably just looking for something simple, like how to get a refund or how to update an email address.

The addition of chatbots ends all those slow, clunky activities. They offer real-time responses to our questions, and they’re getting smarter at what kind of help they can provide, too. You probably already know that chatbots are great for answering FAQ and for completing simple account tasks like generating a new password, but you might not have seen some of the AI-powered chatbots that are now breaking into the market.

The new breed of chatbots use machine learning and natural language processing to truly understand your meaning and mood – not just detect certain keywords and fire off a set response. That means they’re capable of sustaining a humanised, two-way conversation and assist you with the same level of expertise as a real customer service agent.

So, quick, round the clock conversation has become a key aspect of the impact of AI on customer experience.

~ Ecommerce personalisation ~

Looking beyond chatbots, websites as a whole are getting smarter. Machine learning and algorithmic targeting technologies are advancing, and they’re driving intelligent opportunities for personalised ecommerce experiences.

Think about the adverts you see whenever you load a website. More often than not, they’re personalised to you, and based on things you like, or things you’ve bought, or simply thought about buying. It’s not a coincidence that you see the last item you were looking at on eBay popping up in your Facebook feed.

Ecommerce is on quite the transformational journey, and our journeys are increasingly tailored. Think of your last visit to Amazon. It suggested items you’d like, didn’t it? It’s not just Amazon – almost any retail website will recommend products based on the pages you’ve viewed and your activity on site.

It’s also not uncommon for websites to greet you by name these days. Or, if the website doesn’t know you by name, it usually knows where you’re browsing from. You might see a special offer that’s based on your location, or a pop-up offering you a discount as you’re a first-time visitor. You probably don’t even stop to think about it anymore, but that’s way smarter than websites were just a few short years ago.

~ Getting to know you ~

That’s not even the smartest stuff going on online. We’re seeing things like webVR, where you can see, for example, how a pair of sunglasses might look on your face before you buy them. We’re seeing 360° websites that immerse you inside artistic settings, and let you interact with scenes almost like a video game.

And ecommerce is about to get even more personal than that. Biometric technology is on the rise, and your iPhone can now unlock using your face. Brands are already harnessing this technology for streamlined checkouts, and you can now use your fingerprint to complete a Paypal transaction. It won’t be long before you’ll be able to make transactions that are verified by facial and voice recognition, too. AI is getting to know you, and it’s changing what you see online.

~ Oiling up your onboarding ~

It’s not just your browsing that’s getting more frictionless. Think about the last time you downloaded an app, or a digital product, or started a free trial of software online. Did it take you hours to install? Were you downloading lots of different things to get it to run? Did you have to consult instructions?

All those awkward, clunky onboarding experiences are a thing of the past. Businesses know that at home, consumers are using incredible technology that requires no thought to operate, despite powerful capabilities.

So, they’ve responded by streamlining the services they offer, so you can get up and running with a product in minutes. And once you are up and running, you can usually upgrade in a click, or easily manage your account using a simple self-service area.

Gone are the days where you need lots of separate pieces of information or software to get set up with a digital product. With our own WhosOn, for example, you simply enter an email address, download a lightweight client in under a minute, and get an instant welcome email containing your password. That’s all it takes to get going – a few moments of your time, and a few clicks of your mouse.

It all comes back to the real-time revolution: people aren’t willing to wait anymore. We’re used to better, and we expect better from businesses.

The impact of AI on the customer

~ Customer service cost ~

AI and smarter technology is all good and well, but at what cost does it come? The impact of AI on customer experience isn’t always perfect.

Wetherspoons, for example, now allows customers to order and pay for food via an app – allowing them to sit down and wait for a paid meal right away. As easy and efficient as this is, the experience can easily be ruined by a miserable waiter delivering food to the table. There’s no doubt that technology can increase the speed and efficiency of transactional tasks, but no amount of technology can save a company from poor customer service.

AI is risky in that it can make or break your experience. Technology is great, but businesses can’t afford to robotise their people. We may like slick experiences, but as customers, we still demand a friendly human touch.

~ Foes or bros? ~

There’s a reason we like that human touch. Machines are smart, but they just don’t understand us the way people do. There’s a fundamental barrier.

You can’t exchange jokes with a robot, and you can’t share a smile. AI doesn’t get your sarcastic tone, or your dry sense of humour. A robotic receptionist doesn’t get what your raised eyebrow means, and a chatbot doesn’t know that “Wow” can represent horror just as much as delight.

So, if a business relies too heavily on AI, it runs the risk of alienating its customers and creating horribly robotic experiences. A competitor of ours recently learnt this the hard way. A customer switched to us earlier this month because the live chat vendor they were using had completely removed their support team in favour of chatbots. When an issue arose, the customer couldn’t get through to a human representative, and ended up leaving in protest. (Lucky for us.)

But think about it: when you’re frustrated, who do you want to talk to? A sympathetic human, or a machine? We’re still teetering somewhere between deciding whether bots are bros or foes, and that means that we want AI as a novelty at present – not the new norm.

~ Not all doom and gloom ~

That being said, there’s a clear place for AI when used subtly, to support service rather than supersede it. If used well, the impact of AI on customer experience can be both cool and constructive.

For example, AI has now enabled us to get round the clock service. You can go onto a company website at midnight, fire a question through their bot and get an answer right away. You know you’re not talking to a human, but it doesn’t matter: you weren’t expecting an operator at 12 am. You’re just happy you got service so sharpish, at such an odd hour.

Plus, AI is great for online shopping. The North Face is an example of one company stepping up their game using AI. With the help of IBM’s Watson, The North Face is helping online shoppers find their perfect jacket. Customers are asked questions using voice input AI technology, such as where and when they plan on using the jacket. Watson then scans through a catalogue of products to find the ones that best fit the situation based on customer input and its own research – such as chances of rain or stormy weather in the area. That makes for quite the remarkable experience.

~ Offline AI ~

And it’s not all online, AI also helps you get better service in physical stores. Firstly, there’s geolocation to think about. Knowing where and who you are allows businesses to send you real-time, tailored offers while you’re out and about. So, if you love coffee and are around the corner from a coffee house, expect to be sent an offer to entice you to get your favourite cappuccino.

Outside of geolocation, AI is also interested in how people look. Companies like Tesco, BP, Shell and Esso are all using facial recognition tools to serve you customised digital adverts based on your demographic. The technology also adjusts adverts depending on the time and date. This creates a totally bespoke advertising experience for each individual – think Minority Report.

Facial recognition is now capturing your “dwell times” too. That means that if you linger for a notable length of time by a certain product – say, a vacuum cleaner – that information will be stored for use upon your next visit. A store assistant might then be able to give you an exclusive offer the next time you pop in, or you might see digital ads around the store showing deals on vacuum cleaners.

You could even start seeing offers on your computer screen based on in-store dwell time. In other words, omnichannel retailers are gaining new and smarter ways to remarket their products. Brands are now responding to your lead and impulses — almost like reading your mind. You have to admit: that’s pretty neat.

~ Fine balance ~

These are all examples of AI being used as a cool addition to streamline the customer journey, rather than take over the journey completely. When used like this, the impact of AI on customer experience is impressive and intelligent.

As customers, we’re at a turning point. We now want AI to help improve our experiences, but we don’t want that to be at the cost of human support. It’s a fine balance: and one that could well tip as we move forward into the future.

The impact of AI on the company

~ Automation anxiety ~

So, we’ve looked at how AI impacts the customer. But what about the impact of AI on the company testing its implementation? Well, it would be naïve to claim that AI will be all sunshine and daisies for companies straight away. There are a series of obstacles to overcome before AI brings universal happiness in the office.

Firstly, you have to consider that the world is currently falling foul of an epidemic that can only be described as ‘automation anxiety’. This is the fear that, as AI develops and becomes increasingly sophisticated and affordable, humans will find themselves replaced. We’re all worried that automated processes and robots will end up taking our jobs.

It’s no surprise why: AI is even coming after white collar jobs in marketing, law and finance these days. The boundaries of what tasks industrial robots can complete are ever widening.  Meanwhile, in the office, more complex programming techniques have enabled the creation of software that can automate difficult tasks. If AI is quickly developing many of the same competencies as the human workforce, is it any wonder people are fearing for their jobs?

~ A morale dive ~

This presents a morale challenge for companies looking to introduce AI. Bosses need to think about the effect that introducing AI, even gradually, could have on their existing team. Employees could start to panic, and fear that their job is on the line. They could share their concerns with others, and spread an anxious atmosphere across the office. They could even take pre-emptive action and start the search for a new job.

In the here and now, implementing AI could mean that businesses see employee morale take a nose-dive, and this could have a negative effect on productivity. Bill from your admin team might lose his job, Becky in customer services might start to panic about hers, and Bob in HR has a headache about the deflated office atmosphere.

This isn’t something that people at the top usually think about. The C-suite is usually focused on metrics, and their bonuses are tied to money going up. If AI saves money, the C-suite makes money. They don’t tend to see what’s happening out on the office floor, and the impact of AI.

But whose job is to manage AI? Who should monitor what happens interpersonally across teams when AI is introduced? AI isn’t a simple thing to deploy and leave: it needs careful consideration.

~ All change ~

Clearly, then, it’s not just the mood in the office you have to think about: it’s the management. With the introduction of AI into the workplace, there will be a huge shift in the way workplace leadership is conducted. This poses the question: how might humans and AI work alongside one another in the integrated office of tomorrow?

There is an increasing need for workplace leadership training that focuses on AI. Managers need to grasp how to effectively manage an environment that is populated by both robots and humans, and that is not easy in such unexplored territory.

Plus, skill sets may well need to be upgraded to cater for a change. Many processes are becoming automated or passed over to AI, which means job roles will evolve. In this climate, upskilling and retraining is essential. Evidently, businesses will have quite the busy time in preparing the workplace for AI.

~ Can it be trusted? ~

When it comes to the impact of AI on customer experience, there is a big risk for the brand. Simply: can AI be trusted to do the job as well as a human employee?

With any automated function, for example, there is a distinct lack of human skills such as empathy, emotional intelligence, negotiation and crisis resolution. That presents a problem for AI used in a customer-facing context. There will always be a requirement to maintain the ability to speak to a real agent and not a bot. Some questions require the agent to think outside the box,  feel empathy for a customer, and find an alternative solution that may not be apparent to a machine. Unfortunately, you can’t trust AI in that regard.

As much as company structures might not be ready for AI, AI may not yet be ready to integrate into our company structures. Human element aside, it is all too easy to get AI wrong. And if an AI implementation is handled poorly, it could end up leaving companies drastically worse off than they were before — with disgruntled customers and demoralised employees.

~ The flipside ~

However, all this is just one side of the coin. Yes, there are risks to AI, but there are also huge rewards to be gained.

The first and most obvious is the money to be saved by introducing AI. AI improves efficiency, and helps companies save time, effort, and resource. An AI system can take over the work of dozens of employees, all while helping you make faster, more informed decisions.

Then there’s the intelligence that AI brings. Not only does AI help eliminate mistakes and human error, it can also provide predictive insights. So, for example, it can analyse vast amounts of data and turn numbers into business intelligence. This grows your expertise, and allows you to improve the experiences you provide to customers. In turn, this means AI will help make happier customers, and help identify and optimise your future sales opportunities.

Then there’s the competitive element to consider. AI is still in its infancy, and businesses who start to deploy it now could well be the leaders of tomorrow. It’s always wise to capitalise on tech trends and become an early expert in a growing area.

It’s not all negativity for human employees either. From another, happier angle, AI could actually create a better class of jobs, and eliminate the boring admin that gets in the way of productivity.

The point is this: for all the stark predictions on AI, its value and potential are undeniable. Whether we like it or not, AI is here to stay, and it’s going to bring change.

A view to the future

~ AI in the physical world ~

So, what might that change look like? It’s hard to say how AI will develop, but most experts see “common sense” tasks becoming increasingly easy for computers to process. In the next five to ten years, AI will enable robots to take over the tedious, time-consuming tasks that we do each day.

That means that the impact of AI on customer experience could well see us relying on cyborgs. For example, it’s easy to envision a world where robots clean our offices, and man our receptionist desks. Amazon Go, the automated shop, has already launched earlier this year, and Fabio, Britain’s first cyborg shop assistant has made its appearance in a Scottish supermarket. These robotic experiences are only likely to increase.

Elsewhere in the physical world, it’s perfectly plausible to imagine AI in stores that can decide which music to play based on the interests of their customers. AI could even alter the appearance of wallpaper or artwork, using smart, predicted aesthetic preferences of the crowd.

~ AI in the digital world ~

It’s not just physical spaces that will get smart. Services like Siri, Google Assistant and website chatbots will only keep getting more powerful, and we’ll soon all become accustomed to immediate, accurate help whenever we want it, for whatever topic.

In a more mind-boggling prediction, many argue that AI will take digital technology out of a 2D, screen-imprisoned form. Our primary user interface could become the physical environment around us. Historically, we’ve had to rely on two-dimensional displays to play a game or interact with a web page, for example. As AI and the internet of things advance, this kind of traditional display could be replaced simply by the environment.

You might, for example, see full-scale school field trips taking place inside the classroom using VR-kits, or boardrooms where presentations show 3D experiences you can actually feel. Who knows, the virtual world could end up being better than the real world, like Ready Player One.

~ The power of thought ~

 Looking beyond even that, we might be approaching a point where AI requires no interface whatsoever. Earlier this year, Mark Zuckerberg announced that Facebook is working on direct brain interfaces that let you navigate technology straight from thought.

He isn’t the only busy working on mind interfaces. Elon Musk is also developing brain-machine interfaces that will connect humans and computers seamlessly, without the obstacle of input mechanisms.

Indeed, input has always been a major blocker, and thought interfaces would break more bottlenecks like never before. Office workers might one day control machines with their minds only, simply by sending a thought to an AI system. AI could be everywhere, invisible, and accessible from inside our very brains. Scary, right?


The impact of AI on customer experience

If you’ve read this far, you’ve seen that the impact of AI on customer experience is a huge, sprawling topic with many twists and turns. In fact, it’s so multi-faceted that we haven’t scratched the surface in this article.

We have, however, published a book on it. If you’d like to read more on the impact of AI on customer experience, click here and grab a free copy of our book: