In increasingly competitive markets, price bands have narrowed, there is less to differentiate products and services, and the barriers to switching between brands are almost non-existent.
But, by successfully automating large numbers of customer inquiries and facilitating effective self-serve resolution, Conversational AI is equipping forward-thinking businesses with a distinct competitive advantage. The use of these tools can result in a 25% upswing in customer satisfaction and a 30% reduction in costs (LivePerson).
For most businesses, customer experience is now the battleground on which the fight for increased brand awareness and customer loyalty is playing out.
Recent research suggests that 32% of customers would walk away from a business after one bad interaction. But get it right, and the benefits are considerable. If backed by a great customer experience, customers are willing to pay up to a 16% price premium on products and services. And they are much more likely to stay loyal to a brand that can deliver. (PwC).
Balancing quality and cost in customer service
Historically, companies walked a delicate line, balancing the cost and quality of their customer service. This was largely because the principal means of improving customer service (and, by association, customer satisfaction) was increasing staffing levels. More staff meant a more responsive support system, lower wait times, and higher-quality service. However, human resources are often prohibitively expensive, and higher staffing levels substantially increase the cost of each customer interaction.
The result was customer service systems that cost too much and fluctuated with a company’s fortunes. If an organization faced financial pressures, the customer service team was the first to be cut, reducing staffing levels, negatively impacting the customer experience, and compounding the problem.
Are chatbots the answer?
With the emergence of increasingly powerful AI applications and chatbots, customer service teams believed a solution was in sight. This exciting technology promises to reduce costs and improve customer service provision. However, while some chatbots deliver on their potential, the majority do not.
Most chatbots fail because they don't improve the customer experience. They can only respond to a limited range of questions or present customers with small, prescriptive menus. When interactions depart from the narrow confines of their script, the chatbots present customers with frustrating conversational loops, struggle to answer queries satisfactorily and force them to ask to speak to a live agent or lead them to quit the session entirely.
Fortunately, technological developments - most notably Natural Language Understanding (NLU) and intent management - are resolving these issues.
Introducing Conversational AI
NLU and intent management are built on advanced AI technologies, resulting in conversational customer support solutions that better understand customers' language use and their goals. Chatbots typically operate on a limited keyword basis, in which identifying the terms it deems most important determines its response. They generally ignore context and cannot interpret meaning from longer phrases or inputs. As a result, errors and incorrect responses are common.
In contrast, Conversational AI utilizes NLU and intent management to develop a more comprehensive understanding of customer inputs, going as far as to establish the intent behind their query. Consequently, it is capable of more natural interactions, interprets customer intention more accurately, and delivers more diverse, valuable, and helpful responses.
Conversational AI means improved customer satisfaction
Having established what differentiates Conversational AI from other customer support technologies, it is important to detail how it impacts customer satisfaction and decreases costs.
Conversational AI enables customers to receive immediate answers to their inquiries. With no queueing on the phones or waiting for a live agent, customers enjoy instant responses. At the same time, Conversational AI's NLU and intent management capabilities ensure it resolves a broader range of customer concerns and is less likely to frustrate customers and lead to abandonment.
In more complex cases where a human touch is still required, Conversational AI technologies facilitate a problem-free handover to live agents, providing the agent with a comprehensive account of the interaction so far and enabling speedy resolution.
How does Conversational AI decrease cost?
Ultimately, Conversational AI decreases costs by successfully automating more customer inquiries, reducing the pressure on human agents. Conversational AI handles multiple inquiries concurrently, it limits the customer support team’s reliance on live agents.
At the same time, it guarantees an improved customer experience, minimizing churn. Studies suggest that attracting new customers can be up to seven times more costly than retaining existing customers, and this can lead to significant savings.
When it comes to customer service, you can have it all
Taking giant strides beyond early chatbot capabilities, Conversational AI delivers on the promise of automated customer engagement technologies, helping companies improve the customer experience while cutting costs. By better understanding customer intent and use of language, it facilitates more natural interactions, reducing errors and minimizing reliance on costly human agents. The result is a customer service tool that works for both customers and your business.
Contact our expert team to learn more about EDC’s advanced Conversational AI solutions.
