McKinskey conducted a study where 60 shoppers were asked to log their personalized brand interactions over two weeks.
The research revealed four experiences that speak to customers:
- Relevant recommendations they hadn’t considered, not just reminders of what they didn’t buy.
- Messages when they're in "shopping mode," with timing that fits their habits.
- Helpful reminders about things they care about, like restocks or new styles.
- Consistent experiences across online and offline interactions.
Does your brand offer these and other similar experiences to customers? If yes, then you're already on the right track. But if you’re finding it hard to offer such experiences, AI can provide the solution you never knew existed.
Using AI for customer experience makes it easier for businesses to deliver personalized experiences.
Using AI, you can offer relevant recommendations, respond to customer queries and stay in touch with them on your behalf on each step of their journey.
In this article, we’ll talk about how to use AI to improve the customer experience and build deeper and lasting connections with your customers.
Why personalized customer experiences matter?
Personalized customer experiences are essential because they meet the growing expectations of today’s consumers. Customers now want interactions that are tailored to their individual needs and preferences.
According to McKinsey, 71% of consumers expect companies to provide personalized interactions. What’s more alarming is that 76% of people feel frustrated when they don’t get that personalized experience.
Providing personalized experiences is more than just a nice-to-have. It’s a necessity for maintaining customer loyalty and satisfaction.
When businesses understand and cater to individual preferences, they build stronger connections with their customers.
6 Ways to use AI for customer experience personalization
Customers hate spending hours on the call with customer support for simple issues. So, an AI-powered personalized customer experience that makes responses faster and outcomes better is a relief for them.
And most service leaders are already delivering AI-based customer experiences. HubSpot’s State of Customer Service report finds that 86% believe AI will completely transform customer experiences.
Here are various ways to incorporate AI into your customer service strategy, along with some of my favorite AI customer experience examples.
1. AI-Powered chatbots
There’s no time off when it comes to customer service. People expect help anytime, anywhere.
Chatbots powered by AI for customer experience assist customers 24/7, answer common questions, resolve issues, and guide them through your services or products.
According to Zendesk, 57% of customer experience leaders expect generative AI to significantly impact chat-based customer support within the next two years.
Chatbots can handle multiple conversations at once, so customers don’t have to wait. And since chatbots follow pre-programmed scripts and AI-driven logic, they provide consistent answers.
You can integrate a chatbot into your website, mobile app, or social media. Train the bot by feeding it common customer queries and their corresponding answers. Make sure to set up clear instructions so it knows when to direct customers to a human agent.
You can build a chatbot for free and without writing any code using Formaloo.
2. Personalized recommendations
Personalized recommendations lead to more sales because they show customers things they actually want.
With AI, you can show people products, services, or content that fits their interests, all based on their previous behavior and preferences.
You will need to gather your customer data, their past purchases, browsing history, what they’ve liked or added to their wishlist, etc. Most websites or apps already track this kind of information, so it’s just a matter of organizing it.
Then use an AI for customer experience, like Amazon Personalize or Google Recommendations AI, to look for patterns in the data to figure out what a customer is likely to be interested in next.
Set up the tool so that when a customer visits your website, they immediately see products that match their previous purchases or searches.
3. Omnichannel support
Integrate all your communication channels—website, social media, mobile app, and more—into one AI-powered customer service platform.
Now, regardless of whether a customer reaches out on Facebook or via live chat, their information stays the same across the board.
For example, if a customer asks a question on social media and then follows up via email, AI can recognize that it's the same person and provide consistent answers without starting from scratch.
Sephora is great at this type of personalization. It offers an AI-assisted omnichannel experience.
Through its mobile app, customers can book in-store makeovers, receive personalized recommendations, and virtually try on products. Makeup artists also log products used in each customer’s profile for future reference.
4. Contextual marketing
Contextual marketing uses AI for customer experience to create personalized ads based on the customer’s current activity. The goal is to deliver content that matches what a person needs or is doing at that exact moment.
For implementing contextual advertising, you will need information such as your customer’s location, browsing behavior, device type, and time of day. Once AI has the data, it can automatically adjust the marketing content based on the customer’s situation.
For example, if a customer browses your site from a mobile phone during lunchtime, AI can show an ad for a local food delivery service.
Customers appreciate receiving offers or information that is directly relevant to their current situation.
5. Dynamic websites
Instead of showing the same content to everyone, a dynamic website tailors the page content based on customer’s behavior, preferences, or location.
To display dynamic content, you need your customer’s browsing history, location, time spent on certain pages, or previous purchases. You can collect this data through cookies, sign-up forms, or user activity on your site.
Use AI to understand each visitor’s preferences. Then dynamically adjust what they see on your site. For example, if someone has been looking at winter jackets, your homepage can display a selection of jackets the next time they visit.
Amazon’s website is a prime example of dynamic content. When you log in, the homepage changes to show personalized product recommendations based on your past browsing and purchase history.
6. Customer feedback
It's natural for businesses to receive both positive and negative feedback. What’s important is understanding this feedback and acting on it.
If you’re using AI for customer experience, you can collect feedback in real-time, analyze it quickly, and use the insights to make meaningful changes.
There are many ways to collect customer feedback, such as surveys, reviews, live chat, and emails.
Once you've collected feedback, use AI to analyze it and extract valuable insights through techniques like natural language processing, sentiment analysis, and topic modeling.
Benefits of personalizing customer experience with AI
Here are the key benefits companies reap by using AI for customer service:
- Improved customer engagement: AI for customer experience helps businesses engage with customers in a more personalized manner. It offers recommendations and solutions based on their specific needs and preferences.
- Faster response time: AI-powered chatbots and virtual assistants provide instant responses to customer inquiries and reduce wait times for customers.
- 24/7 Availability: AI-powered tools operate around the clock, ensuring that customers always have access to support, no matter the time zone or location.
- Cost efficiency: Automating customer experience with AI reduces the need for human intervention. It lowers costs while still maintaining a high level of service.
- Better customer retention: Personalized experiences create a more meaningful connection with customers and make them more likely to return.
- Emotion and sentiment analysis: AI for customer experience can detect customer emotions and sentiments. It allows businesses to respond more effectively and empathetically to customer concerns.
- Effortless scalability: AI tools handle a large volume of customer interactions simultaneously. There’s no limit to the number of customers it can entertain at a given time.
Measure AI-driven CX score with Formaloo
Once you've implemented AI for customer experience personalization, how would you verify if customer experiences are improving? The key to this is regular tracking of CX metrics.
Metrics such as the Net promoter score (NPS) and customer satisfaction score (CSAT) determine if your use of AI for customer experience hits the right chords.
Now you may ask how you can track these scores. The answer is surveys and what’s a better tool for surveys than Formaloo?
Formaloo is a leading survey maker tool that can help you gather meaningful feedback of all sorts. Its smart survey creation and data analysis tools make collecting feedback data and driving insights from it a fun and easy task.
Formaloo also allows you to make custom CRM, so you don’t have to rely on CRMs that don’t align with your business needs.
Sign up for Formaloo today and start gathering meaningful feedback to ensure your AI-driven customer experience strategies deliver real results.
FAQs
How AI chatbots improve customer experience?
AI chatbots improve customer experience by providing instant, 24/7 support. They answer queries quickly and personalize interactions based on customer data, emotion, and intent. They also reduce support wait times and offer consistent, efficient service.
What is an example of AI in customer service?
An example of AI in customer service is Amazon's Alexa. It helps customers with voice shopping, tracking orders, getting personalized product recommendations, and also answers common queries without needing human customer service agents.
