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How to use AI to improve the customer experience - feature

Picture this: it’s a hot summer day, and two competing lemonade stands are on your block. They’re both selling a glass of lemonade for 50¢ but offer very different experiences. From one, you get a glass of lukewarm lemonade in a paper cup. The other gives you ice-cold lemonade in a colored cup. Plus, an umbrella, a crazy straw, and your choice of fruit to add to the glass. Which would you choose?

Personally, I’m going with the umbrella and crazy straw. In fact, I’d even pay a bit extra for the added flare. This somewhat silly example illustrates the power of a good customer experience. When choosing between two brands, customers will go for a better customer experience every time. And up to 86% of consumers will pay more.

An excellent retail customer experience directly impacts revenue, reputation, and brand loyalty. One study shows that happy customers are:

  • More than 5X as likely to buy again
  • 6X as likely to forgive a mistake
  • 8X as likely to try other products/services
  • 3X as likely to spread positive word-of-mouth reviews

Retailers see serious gains by prioritizing high-quality CX. And today, with the introduction of AI, retailers are finding new and creative ways to become more customer-centric. Read on to see the benefits of AI for retail. Then, learn how to use AI to improve the customer experience.

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Why Retailers Are Embracing AI

Everyone is jumping on the AI bandwagon. Here’s why.

AI lets retailers:

  • Enhance personalization. AI can analyze vast amounts of customer data to deliver highly personalized shopping experiences.
  • Improve efficiency. AI streamlines various operational processes, from inventory management to customer service.
  • Offer proactive service. AI-powered chatbots provide 24/7 support, addressing customer queries instantly and efficiently.
  • Gain more insights. AI enables retailers to gain deeper insights into customer behavior through advanced data analytics.
  • Predict future trends. AI-driven demand forecasting helps retailers anticipate customer needs and manage inventory more effectively.

Now that you know the benefits, let’s explore how to use AI to improve the customer experience.

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How to Use AI to Improve the Customer Experience

1. Add AI-Powered Personalization

Over 70% of consumers expect brands to deliver personalized interactions and experiences. Luckily, AI makes personalization easy.

AI algorithms can provide tailored product suggestions by analyzing customer data. With advanced analytics, you can gather data from across the customer experience, pulling info from past purchases, previous interactions, browsing history, and survey results. Then, you can note customer preferences and trends in behavior or sentiment to build a unique experience for each customer.

For instance, you can add AI to your website to provide custom recommendations and give suggestions based on customers’ tastes, sizing, location, and interests. You can also provide service agents with AI-driven insights using screen pops. With the added context, agents can adjust each interaction to fit the customers’ experience of your brand.

2. Automate the Buying Experience

You can make the purchasing experience hassle-free with AI-powered automation. Automating various stages of the purchasing process, from product selection to checkout, reduces friction and makes the buying process more enjoyable for customers.

For example, you can improve the checkout process with features like one-click purchasing, automated payment processing, and AI-powered personalized financing. AI can recognize returning customers, pre-fill their information, and suggest payment methods based on past behavior. This reduces the time and effort required to complete a purchase (and your CX gets a nice boost!).

Automated systems can also send personalized follow-up emails. Use these to request reviews and provide real-time shipping updates. With the extra level of proactive communication, customers stay informed and engaged. Loyalty and trust in your brand will follow.

Explore more ways automation helps you build the ideal customer experience.

3. Improve Customer Service with Chatbots and IVAs

Customers hate waiting for help. That’s why 67% of service leaders have increased their spending on AI bots this year.

With AI-powered chatbots and virtual assistants, you can improve customer service, reduce hold times, and expand your self-service. Because they’re available 24/7, chatbots and IVAs ensure customers receive immediate assistance on any channel. These intelligent systems can also handle a wide range of customer inquiries, like answering product questions, processing returns and exchanges, and sending order details.

With machine learning and natural language capabilities, advanced AI chatbots learn from interactions, so their responses grow more accurate and human-like over time. With these tools, you can make service faster, more convenient, and more accurate.

4. Use Opinion Mining for Better Customer Insights

If you want to know how to improve the customer experience, you need to know how your customers feel about your existing experience. That’s where opinion mining (also known as sentiment analysis) can help. Opinion mining uses AI to analyze customer feedback from various sources, such as reviews, social media, past interactions, and surveys.

By understanding customer sentiments, you gain valuable insights into what they like and dislike about your products and services. This means you can make more informed decisions about product development, marketing, and customer service improvements. Then, you can be proactive and address customer concerns before they escalate. The more you know about how your customers feel, the more you can do to improve the shopping experience.

5. Implement Demand Forecasting to Ensure Product Availability

How many times has this happened to you? You find the perfect pair of jeans, but when you click on your size, the dreaded “Out of Stock” appears on the screen. Ugh!

Maintaining product and inventory availability is a tricky science. But AI can simplify things. AI-driven demand forecasting models analyze historical sales data, market trends, and external factors to predict future demand. This allows you to stock the right products in the right quantities.

You experience fewer stockouts or overstocking headaches and ensure your popular items are always available. The result? Improved customer experience and a satisfaction boost.

AI transforms the CX

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