Service Is Where Your Customers Will Notice Your AI Strategy First

Many executives have been tempted to find a use for artificial intelligence (AI) in their business. This IBA Group blog has often featured ideas and commentary on the different ways that AI is being deployed across a number of industries, but there is one use case that every customer notices first.

Customer service.

Nobody really wants to use customer service. It always used to mean that something has gone wrong and you need help. Traditionally, it would be a free phone number you can call to then speak to a customer service agent.

This has evolved in recent years. It is now common to text or message from inside an app, however it has almost always been a human agent responding to the customer questions – however they are sent.

But this is now changing thanks to AI and it provides a useful insight into some of the tasks that AI can take on for companies.

It’s useful to look at a real and recent example. Earlier this year the financial service Klarna switched on an AI Assistant they designed using the tools available from OpenAI (well known for their ChatGPT chatbot). After using the AI tool for a month the company published some statistics on what had happened to their customer interactions.

Some of these observations are astounding:

• The AI assistant has had 3 million conversations, two-thirds of Klarna’s customer service chats
• It is doing the equivalent work of 700 full-time agents
• It is on par with human agents in regard to customer satisfaction score
• It is more accurate in errand resolution, leading to a 25% drop in repeat inquiries
• Customers now resolve their errands in less than 2 mins compared to 11 mins previously
• It’s available in 23 markets, 24/7 and communicates in more than 35 languages
• It’s estimated to drive a $40 million USD in profit improvement to Klarna in 2024

There are some very important points here. Every business needs to maintain a customer service process because sometimes customers need to get in touch to ask a question – it is a necessary cost of being in business. But what if a significant proportion of those customer questions could be handled by AI?

In this Klarna example, it should be noted that two thirds of all the conversations with customers were handled by the AI. It was resolving customer problems faster than humans and more accurately. It can also work in any required language and the company estimates that to handle this volume of customer interactions would have required 700 full-time professionals.

The Klarna example is impressive and it may be that the level of AI interactions is high because there is a small set of common questions, however it cannot be denied that here is a company that can replace the need to staff and manage a large contact center with AI and software. The AI never gets tired, it can work 24/7, and it will only get better with experience.

Even in this impressive example, there is still a need for some customers to be handled by a human. In some cases there is a need for troubleshooting or the AI experiences a situation it doesn’t understand. There is still not really an expectation that all customer service can be entirely handled by AI.

But what if your business handles questions from millions of customers each year and you can use AI to automate half of them?

There is an immediate saving in addition to the opportunity to resolve all the simpler problems much faster – improving the quality of service for many of your customers.

Case studies like this are really starting to show where AI can make an important difference in real businesses. Empathetic companies still need people to handle their customers, but executives need to be thinking about how many customer questions are routine and how many really need troubleshooting. AI is coming for all those routine interactions.

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