AI and customer experience: how it's changing and what the future will look like

Posted by Borderless Access on Sep 1, 2023 6:06:47 PM
Borderless Access

AI and customer experience: how it's changing and what the future will look like

AI is a widely embraced reality for businesses in various industries now, and its impact will only continue to see upward growth in the days to come. AI and its advancements in generative models ( ChatGPT, Bard, Midjourney, Stable Diffusion) have gone mainstream and are getting rapidly integrated by businesses to reach their goals. In fact, McKinsey reports that generative AI has the potential to create value equivalent to $2.6 trillion to $4.4 trillion in global corporate profits annually.

AI and customer experience

Customer experience (CX) is no exception and has witnessed massive disruption due to the advancement of AI and its capabilities. A recent study by Salesforce says that 84% of customers feel that the experience a company provides is as important as its products and services. Now, customers expect hyper-personalization when businesses are interacting with them. As businesses navigate this space defined by digital proliferation and heightened customer expectations, Hyper-personalization is the future of an AI-powered customer experience.


Hyperpersonalization creates highly contextualized and individualized interactions with customers. It makes the customer feel uniquely catered to and heard. Hyper personalization uses real-time data and predictive analytics, AI, and ML capabilities to deliver relevant, targeted experiences, interactions, messages, and products to the audience. A hyper-personalized marketing strategy involves curating a user's experience on a website/application based on their current behavior and past interactions with the brand.

How AI and customer experience sync 

How AI and customer experience sync

  • Audience segmentation 

In the era of information overload, customers can often miss out on relevant messages. To address this problem, websites (of companies of varying sizes) usually offer some level of customization through recommendation engines. Recommendation engines use machine learning algorithms to make personalized recommendations based on user preferences, behaviors, and historical data. These engines operate on the principle of finding patterns in consumer behavior data.

Recommendation systems deploy various algorithms, such as collaborative filtering and content-based filtering, to deliver accurate and relevant recommendations. Using recommendation engines can enhance the customer experience by providing deeper insights into consumer behavior, improved customer retention, and more focused advertising campaigns.

In market research, recommendation engines can help to refine audience segmentation. It can categorize users into distinct groups or cohorts, each characterized by shared behaviors and preferences. Based on these insights, businesses can improve their marketing efforts and build campaigns to suit each segment's specific needs, tastes, and behaviors. As a result, businesses can see improvement in the efficacy of marketing efforts, leading to higher engagement rates, increased conversion rates, and overall improved customer satisfaction.

  • AI-Chatbots and NLU to figure out customer intent 

A study found that 64% of agents with AI- chatbots could devote their time to solving complex problems, as compared to 50% of agents without AI chatbots. In the last couple of years, chatbots and virtual assistants have gained significant popularity and they are changing customer interactions and service delivery across various industries. In fact, a Gartner report from last year predicts that chatbots will become a primary customer service channel within five years.

The integration of chatbots and Natural language understanding (NLU) allows companies to build deeper connections with the consumer by understanding context, interpreting intent, offering personalization, and handling complex human queries as well as query ambiguity.

Deploying chatbots to interact with customers can bring about several advantages:

  • 24/7 availability
  • Efficiency
  • Consistency
  • Scalability
  • Reduced chances of error
  • Instantaneous replies
  • Multi-Language support
  • Turning data into insights through predictive analytics 

A recent report found that customer service and support leaders cited customer data and analytics as a top priority for achieving organizational goals this year. Predictive analytics can significantly enhance customer experience by anticipating customer needs, analyzing historical data and behavior patterns, predicting trends and preferences, figuring out potential customer churn rates, and improving customer retention.

It helps cater to issues before they escalate and improves demand forecasting. Predictive analytics can also boost internal operational efficiency and optimize resource allocation in a business, leading to an improved performance in customer experience.

  • Going beyond metrics with sentiment analysis 

Emotions can reveal significant information about a customer. Sentiment analysis for AI-powered customer experience is a powerful mechanism that uses Natural Language Processing (NLP) to understand how customers feel from their feedback, reviews, comments, interactions, and messages.

With these insights, businesses can learn a lot about how customers react to a product or service by understanding and analyzing if the sentiments associated with them are positive or negative (Emotional AI). This can help a company build effective strategies while launching a new product or improving upon an existing one.

Sentiment analysis involves collecting data, sorting, preprocessing, sentiment classification, and final analysis to study customer emotions. It can act as a preventive mechanism by detecting problems before they worsen. It helps to focus on pain points and preferences of consumers on a granular level, going beyond numerical metrics.

  • Fraud detection and safety 

Another area where companies are seeing rapid deployment of AI in customer experience is fraud detection. Integrating AI into fraud detection has significantly transformed the landscape of customer experience. AI-powered systems can identify unusual patterns and anomalies in real-time, anticipating fraudulent activities before they impact vulnerable customers. AI enables personalized alerts based on individual transaction history, offering more relevant warnings. Other than the benefit of protecting customers from financial losses, it builds an environment of frictionless interactions that build loyalty, reputation, and positive sentiment for a business.


As technology gets more sophisticated, numerous opportunities will pop up for businesses to leverage it to improve their AI-powered customer experience and gain a competitive edge in their domains. Businesses that welcome these AI-driven advancements to improve their CX stand a chance to build deeper connections with users, build a loyal customer base, and set them apart from the crowd in this digital era.


Topics: AI Powered Customer Experience, AI in Customer Experience, AI Customer Experience, AI and Customer Experience

Recent Posts

Posts by Tag

See all

Subscribe Here!