Evaluating the ROI of AI in Customer Service
Everything we do in business revolves around the bottom line. After all, why bother to take action that won’t directly or indirectly improve profitability? Unfortunately, some investments don’t have a clear return on investment. This dilemma is particularly true when it comes to customer service improvements.
For example, you can’t easily measure the ROI of AI in customer service. Sure, you can look at statistics like improved resolution rates and response times. But how do you measure the increase in satisfaction due to better customer service? You can monitor your improvement in your CSAT score, but what dollar value does that have? It’s unlike a sales campaign where you can correlate a click to a conversion.
However, what is clear is that improvements in customer support and experience are worthwhile. When those improvements are cost-effective, like with artificial intelligence, it seems like a good idea to invest.
But you need to be clear that it’s the right move for your company. Therefore, in this article, we’ll look at the potential ROI of AI implementation in customer service. We’ll examine both the tangible and more intangible elements to help you make an informed decision.
Why is the Return on Investment Important?
The reason it’s difficult to fully understand AI's ROI in customer experience is that the benefits encompass such a large area. You need to consider every step of the client’s journey and then see where you can plug AI into the mix.
You’ll want to see where artificial intelligence can make significant improvements to customer service from the client’s standpoint. You don’t want to just apply these solutions generically.
For example, you may decide to implement a chatbot to give instant answers about your software. The idea is sound, in principle, but its success will depend on your customers. Customer satisfaction will drop if they don’t want to deal with chatbots. You also need to give your clients an alternative to the bots.
Let’s look at how not to do things. A customer opens the instant chat window, and your chatbot tries to assist. Great. Now what happens if all it does is to direct you to pages in the knowledge base?
Most customers in the SaaS space already know to look at the knowledge base. Many of them will already know the answers aren’t there. Therefore, when the bot directs them to those pages, they get even more frustrated.
It’s a good idea to try to empower your consumers. However, you don’t want a bot to give your customers the run-around. Some of your clients using this feature will search through your knowledge base first. Others will want to speak to an agent first to save time. Either way, you need to make it their choice.
Now let’s move on to how you can evaluate how well your investment performs.
How to Measure the ROI of AI in Customer Experience
One of the best ways to understand the return on investment is to go through the benefits. Let’s look at the factors that influence the ROI of AI in customer service.
Cost Reduction
One of the easiest measures of the ROI of AI in customer support is how much you save by automating various functions. Using a chatbot makes customer service accessible 24/7. The bot will also reduce your reliance on human consultants. Therefore, you can save money and improve the customer experience.
Response Times
A good measure of the ROI for investing in AI support is how much response times improve. You’ll notice improvements in:
- CSAT: Clients want instant answers. If you don’t deliver them, their satisfaction drops.
- Sales: Picture this. You have a quick query about a product feature. You try to reach out to the company, but they’ll only get back to you the next day. Are you going to see what their competitors offer? Most people would.
- Customer Retention: If your customers run into a glitch, they want to solve it quickly. If they can’t they might start looking for alternative options.
Multi-Lingual Support
Here’s where things get tricky again. If you’re expanding into a new market or an area outside of your geographical location, AI can open doors. The system can automatically translate interactions, potentially improving customer support.
That said, it can be challenging to measure the impact. How do you assign a dollar value to this improvement in customer service?
Increased Client Satisfaction and Retention
One way to determine the improvement in the customer experience is to look at satisfaction levels and churn rates. If you’re on the right track, your client satisfaction levels should improve. You should also notice lower churn rates overall.
Personalized Responses
AI-driven support can scan through multiple data sources, both internal and external, to provide tailored responses. Say, for example, a customer contacts customer support because they need a product that solves a particular issue.
Your chatbot can scan through past purchases, interactions, and the customer's personal data to find the right product. This should improve the customer experience because they get highly relevant recommendations.
You can let the bot speak directly to your clients or have it suggest answers to your customer support team. AI can also predict your client's needs and act on them to increase retention.
Data-Driven Insights
AI can collate and analyze data from various sources. It can draw on:
- Interactions with your customer service team;
- Past purchases;
- Customer files;
- Sales notes;
- Social media pages;
- Internet mentions.
The advantage of using AI here is that it excels at recognizing patterns. It can scan through pages of data in seconds to give you great insights. You can use this capability to properly evaluate your customer service delivery. AI could highlight gaps and suggest improvements.
You can then implement these solutions and use AI to monitor the impact on the customer experience. You can also create custom reports to help you zero in on other aspects of your business.
Enhanced Efficiency and Productivity
AI improves productivity in a few ways. For starters, a bot for customer service answers questions quickly. It also always gives the right answer if you train it correctly. There’s no need to worry about misunderstandings of your product information.
What’s more, your customer support team’s satisfaction should improve as well. They won’t have to handle tedious questions like opening and closing times. Therefore, they should find manning the customer service desk more interesting.
Easy Scalability
The pandemic did teach most companies a valuable lesson. With customer service desks operating on skeleton staff, many companies turned to chatbots. These were a stopgap measure to handle the increased volumes of queries.
However, most companies faced a backlash because the customer experience dropped. Bots weren’t as good at understanding the context of queries as they are today.
The point is that AI can provide a scalable solution when it comes to customer service desks. Should you rush into this investment? As we learned during the pandemic, we need to train our customer service bots properly.
Fortunately, it’s a lot easier these days because we can fine-tune large language models instead of training them from scratch.
Maximizing Your Return on Investment
The key to successfully implementing an AI solution to augment customer service is to plan carefully. Read through our tips in this section.
Identify Clear Objectives
Start by clearly defining what you want to achieve by integrating AI. Your approach is slightly different depending on your goals. Do you want to:
- Improve customer service?
- Increase sales?
- Provide better technical support?
If you are clear about what you want, it’s easier to find the right match.
Choosing the Right Tools
Now that you know what you’re looking for, it’s time to find the right solution. You need to drill down deeper and be more specific about what you want. Do you need an automated ticketing solution or something more complex like a virtual assistant? The more complex the functions, the more you’ll need to train your AI.
Work with a Team or DIY?
What’s great today is that there are several companies out there that allow you to fine-tune their large language models. Some are open-source but others will charge you.
However, before tackling this task yourself, you need to ensure you know how to proceed. Your custom AI solution is only as good as the training it receives. You’ll need to clean up the data you feed the model and label it properly.
If you’re unsure of how to do this, you may need to work with a team that has the relevant expertise.
Automate Routine Tasks
Put your AI-based programs to work by automating routine tasks like assigning tickets. Most CRM programs today contain a lot of useful features that let you run some tasks on auto-pilot. If there are other tasks you’d like to add, you may need to customize the program.
Careful Integration
It takes a fair amount of planning to make sure that AI integration goes smoothly:
- Assess Your Existing System: Take a look at what you’re working with currently and whether your chosen solution will fit.
- Plan for Data Preparation and Migration: If you want the process to go as smoothly as possible, you need to carefully strategize.
- Integrate Your AI Systems and API: You need to make sure that both systems can talk to each other.
- Train Your AI Solution: Make sure that you feed the AI high-quality data.
- Put Your Change Management Plan Into Place: Now you’re almost there, you need to start making the transition.
- Monitor Performance: You need to check how well the AI performs and tweak it periodically.
It’s outside the scope of this article to go into details here, but you can check out “Seamless AI Integration into Existing Support Systems: A Step-by-Step Guide” for more information on each step.
Personalize Interactions
One of the best ways to improve customer service is to offer highly relevant recommendations. These can relate to products or even content. The idea is to show your clients that you understand them well. If you get this right, you’ll build customer loyalty.
Fortunately, AI offers you an excellent ally in this quest. Its data-processing capabilities make it ideal for analyzing your customer’s interactions across several systems. It can look at their purchase history, demographics, and other data sources. From there it can make relevant product recommendations or point customers to useful resources.
Measure and Continuously Improve AI Performance
Once you install your AI solution, you must monitor its performance. You should always aim to improve it as you go along. You need to keep the program up to date as well. If there are changes in your processes or industry, you’ll need to retrain your model.
You should ask your clients and team for feedback so you can make wise changes.
Train Your Team to Work With AI Effectively
The last step is to make sure your team can use the AI solution properly. If you choose the right product, this should be fairly simple. The company should work with you to train at least some key personnel.
Still, it’s worth making sure that your team knows the ins and outs. They need to be able to get the best use out of the tool, especially if they have to advise your clients.
Conclusion
As you can see, it’s not easy to put a dollar figure on the ROI of AI in customer service. Yes, you can measure improvements in CSAT scores and churn rates. But there are simply too many intangible aspects to consider here.
The benefits you achieve when using AI solutions start with better productivity and efficiency. Your clients should appreciate the faster response times and easier resolution. However, the benefits go far beyond mere customer service interactions.
AI can identify bottlenecks and other sticking points. It can make valuable suggestions that can measurably improve workflows. You can then improve the customer experience even more.
However, the best way to find out what AI solutions can do for your business is to speak to an expert team. You can reach out to the CoSupport AI team to discuss your needs and learn more about a custom solution.
From there, you can follow our tips on maximizing your return on investment.
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