‘The age of AI is now, and those who are failing to embrace AI and leverage it will fall behind.’ You might come across similar quotes while scrolling your Instagram feed, and honestly, none of those are bluffs. “AI is the ultimate tool to empower people and transform organizations” - Satya Nadella, CEO, Microsoft.
As Andrew Ng, a globally recognized leader in AI and the cofounder of Google Brain said - “AI is the new electricity.” Just as electricity transformed the world in the 19th century, AI is that revolutionary technology that is transforming the business landscape, particularly the area of client experiences. It is true that businesses that fail to embrace AI and leverage its power risk falling behind their competitors in this crowded market.
The impact of poor customer experience on businesses is significant. A study by PwC says that 32% of customers will stop doing business with a brand they love after one bad experience, and 59% will stop after multiple bad experiences.
However, customers who have a positive experience with a brand are 3.5 times more likely to repurchase, 5 times more likely to recommend the brand, and 4 times more likely to forgive a mistake by the brand - leading to enhanced customer retention by a business.
Furthermore, according to a report by Accenture, businesses that fail to provide exceptional customer experience risk losing $1.6 trillion in revenue to competitors. On the other hand, businesses that prioritize customer experience can achieve a revenue growth rate of 17%, compared to just 3% for those that don't prioritize it.
In today's digital age, where customers have more options than ever before, businesses that fall behind their competitors in wooing their customers will lose their competitive advantage. As noted by Gartner, 64% of consumers believe that customer experience is more important than price when making a purchase.
Businesses that fail to prioritize customer experience will risk losing their customers, revenue, and competitive advantage.
Customer experience is indeed the backbone of any successful business, and it has evolved over the years beyond traditional marketing with the help of the latest technological advancements. One such disruption is generative AI - something that intrigues and constantly piques our fantasies!
But would anyone care to explain? What actually is this thing?
Let’s find out.
To put it in simple words, generative AI is a subset of artificial intelligence that uses algorithms to generate new data or content as a fitting response to the input data.
But how does generative AI make its presence felt in the customer experience landscape? Well, when it comes to appropriate client experiences, generative AI helps businesses create compelling and personalized content that resonates with their target audience. As a result, throughout their customer journey, the consumers are greeted with outstanding personalized experiences that help businesses stay relevant to their customer base and constantly optimize their offerings for them.
Now, it is time to find out how these AI language models have been creating a ripple in the area of search and revolutionizing the digital customer experience.
Since its launch in November 2022, OpenAI’s revolutionary chatbot - ChatGPT has taken the business world by storm! While Microsoft continues to increase its investment in OpenAI, Google has also started developing its own AI chatbot Bard that leverages the power of large language models - deep-learning algorithms for natural language processing that have the power to summarize, translate, and generate new text.
Both tech giants are leveraging the power of large language models to develop AI chatbots that generate human-like responses to search queries, instead of flooding the user with links. They are integrating them into the search process. Additionally, both companies are making their chatbots available through APIs, enabling software developers from other firms to integrate their systems with these new chatbots.
This technology holds the key to revolutionizing the customer experience in several industries like finance, healthcare, education, retail, travel, and more! Although these chatbots have their fair share of shortcomings, they are improving rapidly, and companies need to start devising strategies to develop winning client experiences and thinking about the competitive implications that will inevitably arise from using AI.
We can try to generalize our findings further and find out how generative AI can help all sorts of businesses develop their competitive edge and deliver winning customer experiences.
It is beyond doubt that customer outreach is the first step to delivering a remarkable customer experience. Businesses need to reach out to their target audience and understand their needs and preferences. Generative AI can help businesses in this regard by analyzing vast amounts of customer data and generating insights that can inform their customer outreach strategies.
The following real-world examples will help us comprehend the way customer outreach can be improved by harnessing the power of AI.
Amazon is one of the most prominent examples of how generative AI improves customer outreach. The company's recommendation algorithm suggests products to customers based on their purchase history, search history, and other data points. Hence, Amazon's personalized recommendations account for 35% of the company's revenue.
Chatbots are becoming increasingly popular in customer service, offering instant responses to customers - improving response times, and enabling businesses to handle large volumes of customer queries. According to a report by Gartner, by 2022, 70% of customer interactions are happening through emerging technologies such as chatbots, up from 15% in 2018.
Generative AI is also revolutionizing the product design process. By analyzing customer feedback and data, generative AI can identify patterns and make suggestions for product improvements. Thus, companies can create products that align specifically with their customers’ needs and preferences. The athleisure giant Adidas harnessed the power of generative AI to design a new soccer shoe that grabbed headlines!
Spotify is another example of how generative AI can enhance customer outreach. The music streaming platform's recommendation algorithm suggests personalized playlists and new music based on a user's listening history. This results in the users spending more time on the platform, listening to more music, and engaging with the app.
Generative AI can analyze customer data to provide businesses with insights into customer behavior, expectations, preferences, and needs. This information is invaluable, as it can help businesses craft their marketing campaigns efficiently. According to a report by McKinsey, companies that use data analytics to target customers have a 126% profit improvement over their competitors.
Overall, it is true that generative AI has been a game-changer for customer outreach and is helping businesses deliver more personalized and engaging customer experiences.
Once businesses have reached out to their customers, the next step involved defining customer success. Ensuring customer success involves providing customers with a positive experience throughout their customer journey with a particular brand. Businesses can achieve this by creating personalized experiences for their customers. And in this case, generative AI can come to the forefront and help businesses accomplish this fruitfully.
Some of the areas that generative AI is delivering winning customer experiences are the finance, healthcare, and travel industries.
Generative AI is helping businesses with superior customer success through personalized and proactive support. The chatbot created by Capital One harnesses generative AI and helps customers with their finances. A report by Accenture states that chatbots and virtual assistants reduce customer service costs by 30% and enhance customer experiences by 50%.
In the healthcare industry, chatbots and virtual assistants are assisting healthcare providers to offer remote patient care. A report by Business Insider Intelligence states that by the end of 2023, the use of chatbots in healthcare is expected to reach $1.3 billion. These chatbots alleviate multiple patient problems by helping them schedule and cancel appointments, answer health-related questions, and receive medication reminders.
On the other hand, airlines are also leveraging chatbots to help notify customers about flight delays and offer alternate flight information. This kind of proactive support ensures improved user experiences and higher customer satisfaction rates by almost 25%, according to a report by IBM. Additionally, it helps businesses reduce customer service costs.
Client experiences are critical to the success of a business. These are high-value customers who have a significant impact on the business revenue and its growth prospects. Since the client's needs and desires are unique, businesses can use generative AI to successfully craft such unique and personalized experiences that cater to their client’s necessities and preferences.
American Express has increased its client retention rates and revenue successfully by leveraging generative AI to craft personalized expense recommendations for its clients. Generative AI structures analyzed its clients’ spending patterns and preferences and gave rise to those winning recommendations.
Another significant use of generative AI in the financial sector can be found in the asset management company BlackRock’s platform Aladdin which helps financial advisors prepare personalized investment plans for their clients. Since it harnesses generative AI that assesses clients’ individual needs and risk preferences, BlackRock has been able to deliver improved client experiences.
Improved client satisfaction and loyalty can arise only from personalized and engaging client experiences. And generative AI is helping businesses craft that to perfection.
Now that we are equipped with the knowledge of what generative AI can successfully do for businesses to reinvigorate their customer experiences, let’s find out the simple steps as to how it can help organizations do the same.
Although businesses that are yet to tread on the new frontiers of AI might find it daunting to harness generative AI to their advantage, the entire experience can be seamless. If businesses wish to employ generative AI to deliver winning user experiences, they need to follow these steps and create a lasting impact.
Businesses should first identify the problem they wish to solve. This could be anything ranging from customer satisfaction rates to increasing annual revenue. Once businesses have successfully identified their problems, they can leverage generative AI to deliver the winning formula of a perfect solution.
Accumulating customer data that is relevant to the problem you are trying to solve should be your immediate priority. You should focus on gathering large volumes of data which include customer behavior, preferences, and feedback. However, businesses can also employ AI models to perform this step seamlessly.
Once the datasets are gathered, they should be used to train the AI model to generate insights and recommendations.
After training is complete, the AI model should go through multiple rigorous testing scenarios, especially real-world ones, to ensure its success rate in generating accurate recommendations and foolproof insights.
This is the final stage where businesses should implement the AI model in their customer experience strategies. They should consistently monitor their performance.
However, the responsibilities of a business towards its customers don’t end with the implementation of a successful AI model. They should keep the following things in mind if they wish to use AI successfully in enhancing user experience.
Businesses must always implore their customers' needs and preferences, rather than asking what AI technology can do for them. To do this, they should first recognize their customers’ requirements, and then focus the technology’s prowess to translate those needs into requests and generate the appropriate responses.
With every interaction a business has with a customer, there is new learning that comes in the direction of the business. The company should repeat the above steps of recognizing customer requirements, translating them into requests, and generating responses, again and again, to improve their offerings during the next set of customer interactions.
Ultimately, you should understand that you must only use generative AI or similar technology to complement your capabilities, not substitute them. Firms need to understand that technology alone cannot create a competitive edge, especially when a lot of it is available to everyone. The critical question is, how can a company leverage the technology available in a way that creates value and persuades customers to pay for it? Additionally, they should also remember that it must be used in a way that cannot be easily imitated by others, or it will cease to offer a competitive advantage.
If you wish to deliver winning customer experiences, you should definitely embrace the power of generative AI as it has the potential to transform the CX landscape for businesses.
If you are unsure of developing personalized and relevant customer experiences that resonate with your target market and guarantee maximum satisfaction, let us do the backbreaking on your behalf. Leverage Numr CXM’s proprietary tools today to emerge a winner in your sector!
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