Automation is making it simpler for clients to solve their own problems, even though artificial intelligence (AI) is improving the productivity of customer service workers by taking care of simple queries and monotonous activities.
But, how exactly does AI change customer engagement? Do customer feedback patterns indicate AI preferences or concerns? What obstacles do companies encounter when using AI in customer service? How are these obstacles being handled or minimized to enable AI technology integration? And what improvements and developments in AI in customer service are on the horizon?
In this article, we will delve into the most essential data on artificial intelligence that you need to know in 2023. We will cover everything from the use of AI in customer service to the benefits that it delivers.
The size of the worldwide customer support AI market was estimated at USD 1.16 billion in 2021, and it is anticipated to increase at a CAGR of 22.7% from 2022 to 2030 (Grandview Research)
The total value of the worldwide customer care AI market was estimated to be 1.16 billion US dollars in 2021, and it is anticipated that it will rise at a compound annual growth rate (CAGR) of 22.7% from 2022 to 2030. It is anticipated that during the next several years, growing investments in artificial intelligence technology by businesses of all kinds in the area of customer assistance will gain pace.
The market for conversational AI is now estimated to be worth $10.7 billion and is expanding at a pace of 22% per year (Freshworks)
According to statistics provided by Freshworks, the market for conversational artificial intelligence, which is now valued at $10.7 billion, is undergoing a period of tremendous development, rising at an impressive rate of 22% per year. This substantial rise indicates that conversational artificial intelligence technologies are becoming more significant and are being used in a variety of sectors. It also highlights the potential of these technologies to revolutionize and improve communication and interaction processes.
By 2030, the conversational AI industry is expected to be valued at $32.6 billion (Freshworks)
According to projections made by Freshworks, the conversational artificial intelligence market is anticipated to reach $32.6 billion by the year 2030. It is clear from this forecast that conversational artificial intelligence technologies are becoming more popular across a broad range of businesses.
There is no doubt that customer service automation paves the way for your organization to be successful. The effect of your customer service is felt more and more broadly than that of any other team. When they fail, everyone fails, and your consumers are aware of this when it happens.
96% of customers value customer service in brand loyalty decisions (Microsoft)
When it comes to sticking with a brand, a whopping 96% of customers give a big thumbs up to top-notch customer service, according to the cool cats at Microsoft. It’s the real deal for brand loyalty decisions!
Customers who consider a business’s service to be “excellent” are 38% more inclined to give it their recommendation (Qualtrics XM Institute)
Moreover, customer service quality has a big influence on referrals. Customers who have the experience of receiving “great” service from a company are 38 percent more likely to recommend that company to others.
Because of the use of chatbots, 69% of the respondents reported lower operating expenses (Comptia)
Although a growing number of businesses are turning to artificial intelligence (AI) to improve their customer service, particularly in areas such as chatbot interactions with customers. Sixty-nine percent of respondents reported fewer operational expenditures as a direct result of using chatbots.
84% of customer care representatives who use AI say it makes it easier for them to handle support issues efficiently (HubSpot)
For many customer service professionals (precisely 84%) utilizing AI, it’s akin to having a valuable assistant by their side. They say that AI makes their job way easier, especially when it comes to tackling support problems. It’s like having a superpower that lets them handle issues more efficiently. So, for these customer care reps, having AI on their team is a game-changer, making their work smoother and more effective.
62% of customer service representatives feel that AI and automation solutions help them better understand their consumers (HubSpot)
An overwhelming 62% of professionals strongly feel that AI and automation technologies play a critical role in improving their knowledge of consumers, putting them at the forefront of emerging customer service techniques. This agreement highlights a significant change in mindset, highlighting that modern technologies go beyond conventional operational efficiency.
61% of support leaders witnessed enhanced customer experiences while using AI for customer service (Intercom)
Companies are seeing significant results from integrating AI into their customer service operations. A significant 61% of support leaders have noticed improved customer experience results, indicating a favourable trend. Furthermore, 58% of support executives reported increases in customer satisfaction (CSAT) scores, highlighting the favourable association between AI adoption and customer satisfaction measures. Furthermore, an impressive 66% of support executives are successfully meeting Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) by utilizing AI-driven solutions; this shows that AI can help achieve operational goals.
|Percentage of support leaders
|Better customer experience
|Improved CSAT scores
|Achieved KPIs and SLAs
AI-powered customer services deliver prompt responses to client inquiries, gather thorough knowledge regarding the product or service, and offer guidance to aid consumers in making the best choices.
In a Microsoft poll, 72% of respondents said they expected salespeople to be familiar with their profiles and past purchases (Quixy)
In a survey conducted by Microsoft, 72 percent of those polled wanted representatives to know their profile and previous purchase history. You can satisfy these expectations through the use of customer service automation.
Chatbot conversations for customer support issues were assessed as being extremely effective by 70% of respondents (Quixy)
A chatbot, which is customer care software, assists you in automating customer assistance while your personnel are unavailable. Seventy percent of respondents said that their experiences with chatbots were extremely useful in solving difficulties related to customer service.
Of the various AI applications in customer service, 41% are AI chatbots responding to customer service requests, with effectiveness ranked highest for this use case (HubSpot)
The most popular AI/automation tools in customer service are AI chatbots (41%), and generative AI tools (41%), both contributing to responding and crafting replies to customer service requests. Additionally, 38% involve AI tools that efficiently route service requests to the right agent, while 37% focus on prioritizing requests based on urgency, and another 37% center on collecting and analyzing feedback from customers.
According to 35% of CEOs, the most common use of generative AI in sales and customer service is the employment of virtual assistants for client interaction (Capgemini)
The deployment of virtual assistants for client interactions is the most common use of generative AI in sales and customer service, according to 35% of CEOs. This highlights the growing dependence on artificial intelligence-powered virtual assistants to improve client engagement. Furthermore, 33% of CEOs see sales operations optimization and streamlining as a significant use case for generative AI, attesting to the technology’s importance in refining overall sales processes. Similarly, 32% of CEOs recognize the use of AI to optimize sales support chatbots, highlighting the strategic deployment of AI in boosting customer support activities, notably via automated chatbot conversations.
|Virtual assistants for customer engagement
|Optimizing and streamlining sales operations
|Optimizing sales support chatbots
The use of AI in customer service is changing the way organizations communicate with their consumers. Organizations can rapidly respond to requests by integrating virtual assistants and chatbots, resulting in increased productivity and customer satisfaction. The ability of artificial intelligence (AI) to analyze data allows tailored service, leading to a dramatic change in customer relations and underscoring the rising relevance of technology in enhancing consumer experiences.
63% of retail organizations utilize artificial intelligence (AI) in customer service to improve interactions, with 40% specifically setting aside teams and budgets for its adoption (Capgemini Research Institute)
A recent study by the Capgemini Research Institute found that 63% of retail companies are using artificial intelligence (AI) to improve how they interact with customers. Additionally, 40% of these companies are putting together specific teams and budgets to make sure they effectively incorporate AI into their customer service efforts. This shows that many retailers see the value of AI in enhancing customer experiences and are actively investing in it to stay ahead in the industry.
The implementation of artificial intelligence in customer service involves hurdles like reluctance from employees, ethical issues, initial investments, and the need to strike a balance between automation and a human touch. Companies must overcome the full potential of artificial intelligence and improve their interactions with customers.
The primary reason for not using AI or automation in roles is the preference for human interaction, cited by 44% of consumers (HubSpot)
The reasons for not employing AI or automation in professions today vary. Consumers prefer human connection over AI, according to 44% of respondents. Furthermore, 36% believe that AI-powered customer care falls short of human assistance in terms of personalization. Other factors include a desire not to become unduly dependent on AI tools (30%), apprehension about the perceived high expenses of AI technologies (23%), and worries about AI tools sometimes producing erroneous information (20%).
|Customers prefer human interaction over AI
|Customer service powered by AI is less personalized than human customer service
|Customers avoid becoming unduly dependent on AI technologies
|AI tools are excessively costly
|AI tools sometimes provide erroneous data
Artificial intelligence is improving practically every aspect of the customer experience as it is used, from the identification of customers’ voices to the speed with which they get responses to their messages.
Over 60% of customer service professionals said that utilizing AI had enabled them to save time, and nearly 50% claimed that it had made their work simpler (Dialpad)
The use of artificial intelligence was reported to have helped respondents save over 60 percent of their time, and almost half of those who responded also said that AI made their tasks simpler regarding customer service automation.
48% of marketing executives agree that AI solutions like chatbots have significantly changed how their clients and buyers connect with them (Semrush)
AI customer service software, including chatbots, have, according to the opinions of 48% of marketing executives, created a significant improvement in the ways in which their consumers and prospects connect with them.
80% of common customer care inquiries are handled by chatbots (Semrush)
Chatbots are able to handle up to 80 percent of the typical questions that are asked of customer care representatives, which frees up a significant amount of time for those representatives to focus on more complex inquiries.
65% of customer service executives say that the artificial intelligence and bots they utilize are getting more realistic and human-like (Zendesk)
According to a Zendesk survey, 65% of customer service executives believe the artificial intelligence and bots they use in their systems are becoming more realistic and human-like. This points to an increasing trend towards sophisticated technology aimed at improving the human touch in consumer interactions, resulting in more realistic and personalized experiences.
AI in customer service has a wide range of capabilities. It improves productivity and delivers context-aware replies by automating regular questions with chatbots and making tailored suggestions using machine learning. AI data analysis helps identify consumer issues by revealing client behavior.
Nearly two-thirds of customer care duties and up to 70% of customer engagements can be automated by an AI-powered omnichannel contact center solution (Freshworks)
According to Freshworks, an AI-powered omnichannel contact center solution can automate almost two-thirds of customer care responsibilities and up to 70% of client encounters. This has big potential for companies to improve productivity and expedite customer interactions by incorporating advanced AI technology into their contact center operations.
AI in customer service enhances efficiency by processing regular activities quickly, lowering response times, and giving support 24 hours a day, seven days a week. This allows human agents to concentrate on more difficult problems, resulting in a more seamless client experience. The data analysis capabilities of AI improve procedures, signaling a paradigm shift in customer support operations.
70% of all live chat inquiries are sent straight to the chatbot, and 68% of these are answered without the need for human intervention (Comm100)
According to Comm100, a significant advancement in customer support is the automation of live chat queries. Approximately 70% of all live chat questions are sent to chatbots, with 68% receiving replies without the need for human participation. This data highlights the growing dependence on chatbots to handle regular customer requests effectively, providing insight into the emerging world of AI-driven consumer interactions.
The availability of a generative AI conversational assistant boosts customer care staff efficiency by 14% on average (National Bureau of Economic Research)
According to the National Bureau of Economic Research, integrating a generative AI conversational assistant has proven to be a critical component in increasing customer service staff efficiency, with an average gain of 14%. This cutting-edge technology enables customer support personnel to simplify communication procedures, respond quickly, and deliver real-time help.
By using sophisticated analytics and machine learning for the exact assessment of key performance indicators, AI changes customer experience measurements. It provides real-time information, allowing for rapid modifications and ongoing service quality improvement.
72% of customers expect immediate responses, while 71% prioritize natural and conversational experiences in communication (Zendesk)
The expectations of customers about customer service are changing, with a substantial focus being placed on both instantaneous actions and conversations that are natural and conversational. According to recent research conducted by Zendesk, 72% of clients now want rapid service, which highlights the continuous significance of prompt replies. As an additional point of interest, 71% of consumers put a high value on conversational encounters, which highlights the importance of having communication channels that are fluid and natural.
Highlighting the revolutionary influence of technology on good customer connections, AI’s efficiency and analytical skills help with quick issue resolution, enhanced happiness, and the development of seamless, individualized experiences.
Generative AI personalizes correspondences, according to 64% of customer service representatives (HubSpot)
Almost two-thirds of customer service reps think that generative AI, which creates content, makes their messages more personal. This means they believe this smart technology helps them tailor their communication to be more individualized and specific to each customer. It shows that many in customer service see the value of using AI to make their interactions more personalized and effective.
78% of customer service professionals say AI and automation allow them to focus more of their time on the crucial aspects of their jobs (HubSpot)
A whopping 78% of customer service workers credit AI and automation for allowing them to concentrate on the most important aspects of their jobs. This overwhelming unanimity highlights the critical role of these technologies in simplifying processes, freeing up critical time for professionals to devote to the most important aspects of customer care.
By automating customer assistance, you may save time and effort in helping clients locate the answers they need. Additionally, AI enables agents to concentrate more on challenging operations than standard top-tier support requests by promptly addressing customer problems even before they exist.
The main advantages of chatbots include 64% round-the-clock availability, 55% quick replies to queries, and 55% solutions to straightforward queries (Drift)
The major benefits of chatbots are their 64% 24-hour availability, their 55% rapid response time, and their 55% ability to answer simple questions.
It’s also important to note that 34% of customers believed they would utilize chatbots to have human conversations and communicate with other people.
Among the surveyed business professionals, 36% believe that 24/7 availability is one of the significant benefits of AI/automation in customer service (HubSpot)
According to a HubSpot survey of 1,350+ business professionals, the biggest benefits of AI/automation in customer service include 24/7 availability (36%), time savings/task automation (31%), faster response to support requests/reduced handling time (30%), and efficient handling of smaller tasks (28%).
|Time savings and task automation
|Faster response to support requests, reducing handling time
|Handling smaller tasks frees up time for complex issues
An efficient adoption of automation software reduces expenses associated with customer support by 20–40% for businesses (McKinsey)
According to research conducted by McKinsey, businesses may reduce the expenses of providing customer support by 20–40% with the help of an efficient implementation of automation technologies. Automating aspects of your customer service may help you get more out of the personnel you already have while also cutting expenses. Automation, when carried out effectively, may lower the average cost of providing service to each individual client.
Businesses may not only save expenses but also improve client contentment. Customers’ satisfaction increased by up to 20%, according to the same McKinsey analysis.
An overall increase in efficiency seemed to be the primary advantage, as reported by 37.4% of the respondents (Statista)
In a poll on customer experience (CX) among firms performing in the United States in 2021, respondents were questioned about the primary advantages of artificial intelligence (AI) and robotic process automation. A general increase in efficiency seemed to be the primary advantage, as reported by 37.4% of the participants.
AI solutions in customer service are proven to be game changers, generating astounding results in customer satisfaction.
AI solutions drive up to a three-fold times increase in customer satisfaction scores (CSAT) (Accenture)
Customer satisfaction scores are not just doubling but tripling—that is, increasing by up to three times more—using this cutting-edge AI technology. It’s not only a gain for buyers; vendors are also benefiting. With this tech-savvy approach, the overall experience is much improved, with a dash of ingenuity thrown in for good measure.
The future of AI in customer service contains intriguing possibilities, promising to transform how organizations interact with their customers. As technology advances, the use of AI is likely to play a critical role in improving client experiences. Further customization via extensive data analytics, broad use of sophisticated virtual assistants, and ongoing enhancement of automated systems are all expected advancements. This transformational trend not only represents enhanced operational efficiency but also highlights AI’s rising importance in determining the future landscape of customer support interactions.
79% of customer service professionals are planning to spend more money on AI over the next two years (Digital Deloitte)
Companies can provide a better customer experience (CX) when they strategically incorporate AI technologies since these technologies allow agents to be empowered with customer data and other tools that make it simpler to handle customer concerns. 79% of those in charge of customer service aim to make more investments in AI capabilities during the next two years.
By 2025, live telephone and internet chats will make up 95% of all client engagements, according to Servion Global Solutions (Finance Digest)
While automation has long contributed to improving customer service, markets are now at a crossroads because customers not only expect intelligent robots to take over but also demand it. Servion estimates that by 2025, 95% of all customer contacts, including live phone calls and online discussions, will be powered by AI, making it impossible for consumers to “identify the bot.”
By 2025, a staggering 95% of customer interactions are anticipated to be seamlessly enhanced with the power of AI (Accenture)
Soon, an incredible 95% of consumer contacts are expected to undergo a revolutionary shift, becoming AI-enabled by 2025. This represents a significant integration of artificial intelligence into numerous facets of consumer contact, ushering in an era in which smart technologies play a critical role in defining and improving the entire customer experience.
AI is predicted to be involved in 95% of consumer interactions by 2025 (Freshworks)
AI is expected to play a part in 95% of customer interactions by 2025, according to Freshworks. This forecast illustrates the rising integration of AI technology into many aspects of customer interactions, demonstrating the disruptive influence it is likely to have on how companies connect with their consumers.
While currently only 1.6% of call center interactions are automated, this number is anticipated to rise to 10% by 2026, potentially saving call centers approximately $80 billion annually in labor costs (Gartner)
According to Gartner, Inc., current data shows that just 1.6% of contact center interactions are automated. However, predictions indicate a significant rise to 10% by 2026. This predicted boom in automation has the potential to provide huge cost savings for contact centers, with labour expenses estimated to be approximately $80 billion per year.
Executives are deliberately targeting their investments in artificial intelligence (AI) in customer service with the main objective of improving the customer experience and retention rates.
The primary objective of 38% of executives’ AI investments is to enhance consumer experience and retention (Gartner)
Investments in generative AI are strategically targeted, with 38% prioritizing customer experience and retention and 26% prioritizing revenue growth. Cost optimization comes in second at 17%, suggesting an understanding of AI’s significance in improving operational efficiency. Business continuity receives a 7% allocation, indicating the significance of AI in strengthening organizational resilience. Notably, 12% said “None of the Above or Not Applicable,” demonstrating the variety of ways organizations interpret and deploy generative AI to meet their requirements. This demonstrates the dynamic and adaptable character of generative AI investments in promoting innovation and long-term success.
|None of the Above or Not applicable
There is a growing awareness among people working in customer service that artificial intelligence (AI) can significantly revolutionize their position.
49% of customer service professionals using AI or automation believe these tools will independently handle most customer service tasks (HubSpot)
The majority of customer service professionals who are now using AI and automation technologies in their jobs are positive about the future potential of these tools, anticipating them being able to handle the bulk of customer service-related duties on their own. This includes 49% of such workers.
A paradigm shift is seen in customer support specialists’ everyday work as an increasing proportion acknowledge the critical role of AI and automation in their activities. This recognition goes beyond immediate needs, with a sizable majority expecting a significant influence on their work soon. AI and automation integration is quickly becoming a defining factor in influencing the landscape of customer support workers’ everyday jobs.
Nearly half of customer support experts believe that AI and automation technologies are essential to their day-to-day work, while 62% believe that these tools will have a major influence on their employment in 2023 (HubSpot)
Many customer support experts now believe that using AI and automation tools is crucial for their work. Almost half of them think these technologies are essential to their day-to-day tasks. Additionally, a majority of 62% expect these tools to have a big impact on their jobs in 2023. This suggests that AI and automation are not only important for their current work but are also expected to significantly influence the nature of their jobs in the coming year.
The integration of artificial intelligence (AI) solutions has become critical in optimizing and upgrading support systems in the ever-changing environment of customer care. These solutions, which are meant to accelerate procedures and enhance client interactions, have become essential in managing the rising demands of today’s volatile markets.
For customer service, top AI/automation tool preferences are efficient routing (25%), AI self-service (21%), feedback analysis (20%), and prioritizing urgent requests (20%) (HubSpot)
When considering the adoption of AI/automation tools for customer service, the top preferences include tools (25%) that efficiently route customers to the right representative, followed by AI self-service tools (21%), which aid customers in finding solutions independently. Additionally, 20% express interest in AI tools that collect and analyze customer feedback, while the same percentage emphasizes the importance of tools that assist in prioritizing requests based on urgency.
45% of those using AI automation cite maintaining a personalized experience as the biggest challenge in using AI in customer service (HubSpot)
As a result of the use of artificial intelligence in customer service, the most significant problems include endeavors to preserve a personalized experience, which was highlighted by 45% of respondents. Furthermore, 40% of respondents voiced their worries about the possibility of tools producing erroneous information on occasion, and 32% mentioned the challenges they had in integrating these tools with the data and systems that were already in place.
Implementing and utilizing artificial intelligence (AI) in various sectors is a transformative journey, yet it is not without its challenges. As enterprises increasingly adopt AI technology to improve efficiency and creativity, they face several challenges that can obstruct effective deployment.
79% of organizations fail to adequately educate employees on how to effectively implement and utilize AI, while 70% do not invest in human-machine collaboration (Deloitte)
According to Deloitte, 79% of organizations fall short in adequately educating their employees on the effective implementation and utilization of AI, revealing a significant gap in both educational efforts and strategic investments in human-machine interactions within the realm of artificial intelligence. Furthermore, 70% of these organizations do not invest in developing human-machine cooperation.
To capture the revolutionary influence of artificial intelligence (AI) on customer service, this article gives a detailed look at its present state, problems, and future potential. The data indicates a dynamic world, from the rising usage of AI technologies like chatbots to the substantial implications for customer support agents’ everyday jobs. While organizations are aggressively investing in AI to improve productivity, the road is not without challenges, such as employee resistance and ethical concerns. Nonetheless, the trend suggests a bright future, underscoring the critical role AI is projected to play in redesigning and enhancing customer service operations.