We’re in an era where the expectation for instant, seamless customer service has become the norm. The use of support lines, physical promotional offers, or even arranging in-person meetings is (unfortunately) no longer good enough. 

Especially with millennials at the front, expectations have soared. In fact, 67% of them demand real-time customer support, while a clear majority expect a seamless experience across various digital channels too.

What does this mean? Obviously, the modern market demands businesses to engage with their customers faster and smarter than ever before.

Here’s the fix: AI-powered customer engagement! Yes, AI is today’s key to redefining customer relationships. In this blog, we’re going to show a few ways that AI is revolutionizing customer interactions and what aspects of your business can leverage this technology, too.

Customer engagement’s importance for businesses

Customer experience as one of the key performance indicators of a business

When customers are engaged, the overall experience goes beyond buying—it becomes a deeper connection with your business. This is crucial because having loyal customers is essential for growth. 

Take note of the following statistics:

  • 86% of buyers are willing to pay more if it means getting a great customer experience
  • Increasing engagement can increase cross-sell revenue, upsell revenue, and even order size by up to 85%
  • Companies that focus on engagement can improve productivity, revenue, customer ratings, and share of wallet two to three times more effectively

Put simply, customer engagement is an important factor in increasing their customer lifetime value. Let’s take a look at more reasons why having engaged customers is useful for businesses:

1. Engagement gives you an edge in a crowded market

It’s a fact: today’s market is saturated with an overload of competitors. Hence, how you engage with your customers can be your biggest differentiator. Engaging customers transforms them from casual buyers into loyal advocates. When customers equate your brand with positive experiences, they’ll surely remember and value your business.

2. Customers become your unofficial marketing team

Here’s another thing—engaged customers are your most loyal advocates and unofficial marketing squad. Satisfied customers will willingly promote you on their social media platforms or simply engage in what is more known as “word-of-mouth marketing.”

This is more convincing because it comes from the personal experience of happy customers who can influence their network. In fact, word-of-mouth drives an intense $6 trillion of annual consumer spending. Additionally, 88% of shoppers trust online reviews from other consumers (aside from friends and family) similar to how they trust recommendations from people they personally know.

3. They are less sensitive to price changes

Highly engaged customers typically show less concern over price fluctuations. This is because they find value in your product boosted by your exceptional customer service. As a matter of fact, these customers are often willing to pay a premium because they trust in the quality of the services. 

4. Get a gold mine of feedback

Engaged customers double as a rich source of unbiased feedback. Also, input from satisfied customers is often more detailed, frequent, and most importantly—honest. It’s easier for them to give constructive reviews or suggestions since they are also invested in the product. That’s why existing customers are invaluable assets for businesses when it comes to understanding true customer needs, pinpointing areas for improvement, and even developing new products. 

The evolving role of AI in customer engagement

Ai powered virtual assistant helping to assist customers with particular services, creating personalized offers, and helping with consumer engagement

Once upon a time, business customer engagement was all about human interaction. Fast forward to today (thanks to rapid advancements in technology and changing consumer expectations), simply focusing on interactions is now impractical.

Why? Let’s count the ways:

  • Human-based services are often more expensive due to labor costs
  • Relying only on human interaction limits the scale at which a business can operate
  • Human service quality can be inconsistent due to factors like mood, personal biases, or skill levels
  • Humans can only work so much and need breaks, so there are limitations in availability

Thankfully, AI in customer engagement is now a thing. Here’s a detailed look into how this evolution is playing out:

AI personalizes the customer experience

AI shakes things up in customer engagement. First off, it enhances personalization. AI can sift vast amounts of customer data and analyze customer behavior—what they buy, what they browse, and feedback—and use the data to offer them exactly what they’re looking for. This might mean recommending products a customer might be interested in or even personalizing the user experience on a website.

AI automates customer service

There’s always improvement in speed when you automate tasks. Just look at this—nearly 60% of customer service professionals said AI improved their efficiency. The customer engagement AI tools let you handle multiple customer queries 24/7. A simple question no longer takes hours to answer. So, in a nutshell, artificial intelligence customer engagement automates human resources workload and enhances customer experience at the same time.

AI understands customers better

AI also plays a big role in understanding customers more deeply. 46% of service reps say AI delivers a more personalized experience. It analyzes customer data and gives insights for better customer engagement. This helps businesses make smarter decisions about what to offer and how to keep their customers happy. But it could only get better. In addition to analyzing current customer data, customer engagement AI’s predictive algorithms can anticipate future customer needs and interests. 

Benefits of AI-powered customer engagement

Image of a customer engaging in conversational user experience with personalized assistance

AI-powered customer engagement reshapes how businesses interact with their customers in big ways. Here’s a more detailed look at these benefits:

Improved efficiency and availability

Imagine having a customer rep who never sleeps, never takes a break, and handles multiple customers at once. Too good to be true? With AI, this is very much possible. AI-powered customer engagement tools like chatbots are available seven days a week, 24/7. That means more issues resolved in faster response rates—which is definitely a big win for customer satisfaction. 

Tailored recommendations, content, and solutions

What if we told you that companies that use AI get 3.5 times more customer satisfaction? Apparently, AI isn’t confined to simply responding to queries. AI also excels in personalizing customer interactions by analyzing individual customer profiles, such as browsing history, customer journey, and purchase history, patterns, and preferences. Programmed right, AI is essentially a personal shopper for every customer.

Reduced operational costs

Cost-effectiveness is another big plus. With AI, you’re not just hiring a customer service team that will handle customer interactions around the clock. Once set up, AI systems run at a fraction of the cost, doing more work in less time. You can even program AI tools to detect, evaluate, and then hand off complex queries to human customer service reps.

It’s a smart financial strategy that reduces operational costs at the same time.

Informed business decisions

AI customer engagement tools also help managers, executives, and business owners analyze customer data and make informed business decisions. Since AI can analyze big chunks of data within seconds, businesses can receive valuable insights like customer behavior patterns, preferences, and feedback that can help them in planning and strategizing.

Easily scale up or down

As your business matures, keeping up with customers can be tricky. Additionally, your customer engagement strategy may need to scale up or down based on external factors like market volatility or industry trends. Thankfully, AI-powered customer engagement tools can scale with you seamlessly. They’re ideal for handling fluctuating volumes of customer interactions to maintain consistent and high standards of customer service.

How AI is changing the customer engagement game

AI powered chatbots helping with support inquiries across multiple channels

True enough, artificial intelligence is revolutionizing the business world. Here’s an in-depth look into machine learning and the specific ways it’s altering the customer engagement game across the entire customer journey and customer touchpoints:

AI in customer support:

This is a big one. Almost 80% of customer service agents say they have trouble balancing speed and quality—until AI entered the picture. Using customer service chatbots and virtual assistants, customers now get quick and accurate responses, no matter the time and day. The cool part is they’re more than just quick responders. AI-enabled customer engagement tools also learn from interactions continuously and consistently get better at helping with each conversation.

Other notable benefits of AI in customer support:

  • multilingual support to handle loads of queries from all over the world simultaneously
  • voice-activated assistants that make shopping even more interactive
  • reduce cart abandonment in the eCommerce industry

Why it’s game-changing: Unlike human customer representatives, AI chatbots are available round the clock to provide a personalized customer experience to every online user. They answer customer inquiries instantly, drastically reducing wait times and improving overall customer satisfaction, customer loyalty, and customer retention.

AI in marketing campaigns 

AI is becoming the key driver of marketing. Gartner predicts that by 2025, businesses using AI will be able to shift 75% of their workload from production to strategic marketing activities.

Why? Because AI easily figures out what works and what doesn’t in your marketing efforts. It can crunch tons of customer data to create hyper-personalized marketing. This means ads, emails, and social media content can all be tailored to individual tastes and behaviors. It also helps predict industry trends so businesses can continuously slay and adjust their strategies accordingly.

Why it’s game-changing: AI-powered customer engagement personalizes marketing at scale so each user receives generated content that resonates with their specific preferences for more effective marketing spending.

AI in sales

From lead generation, to nurturing, and sales assistance, AI can assist your sales team by helping them engage better with leads that are more likely to convert. A report says artificial intelligence has increased sales leads by up to 50%. So, AI in sales is a powerful tool that can forecast who might be interested in what. Here’s an example: Customer engagement AI can help an eCommerce store by suggesting products to customers based on their browsing history.

Why it’s game-changing: AI-driven tools help prioritize the sales team’s customer engagement efforts for leads with the highest conversion potential. This not only increases efficiency but also enhances the chances of successful sales. The personalized recommendations to customers increase the relevance of sales pitches.

AI in social media

Social media is where people usually hang out—and this includes your future customers. AI technology is changing how businesses engage with them there. Social media AI tracks and analyzes social media conversations to gauge customer sentiment about a brand and let them know what users want and when.

Why it’s game-changing: With the immediate insight that businesses get from AI customer engagement, they can promptly answer customer questions, tackle feedback, manage their online image, and even tweak their social media strategy based on real-time data.

AI in customer feedback

Let’s face it—gathering and analyzing customer feedback can be sometimes overwhelming. However, AI simplifies and optimizes the entire process. It can sift through tons of feedback—surveys, reviews, social media posts—and pull out the key insights way faster than a human. This means businesses can engage and influence how things are going directly from the customer’s mouth.

Why it’s game-changing: Through rapid analysis, AI technology in customer engagement gives actionable insights into customer satisfaction, service quality, and product issues. Easily consolidating them, you identify patterns and trends that might otherwise go unnoticed.

AI in predictive analytics

Artificial intelligence technology is the future. There’s no doubt about this. With its predictive analytics in customer engagement, AI really feels like it’s from the future. Using this feature, AI can forecast future customer behavior based on past data. This means you can anticipate needs, customize recommendations, and even spot potential problems. The predictive power empowers businesses and gives them the opportunity to be proactive rather than reactive.

Why it’s game-changing: Predictive analytics of AIs help businesses anticipate and solve problems in advance. Companies can tailor customer engagement strategies and services to meet their future demands.

AI in real-time personalization

Ever experienced browsing an online music streaming service, listening to songs, and then the system instantly updates the playlist recommendations to match your current mood and preferences? That’s real-time personalization. As customers engage with apps, AI-powered customer engagement algorithms detect their behavior on the fly and tailor the content they see. 

Why it’s game-changing: In the fast-moving digital world, real-time personalization is key. It ensures that every customer engagement is relevant and satisfying. Customer engagement AI adapts instantly to their behavior, creating a highly personalized and memorable user experience—increasing customer satisfaction across all touchpoints. 

Take note of these ethical considerations when using AI in customer engagement

Artificial intelligence being used to fuel customer experiences and boost customer satisfaction while prioritizing data privacy and security

While incorporating AI into customer engagement is truly an innovation, there’s also a set of ethical considerations that businesses must address. Here are some of them.

  • Transparency: Businesses should be transparent about their use of artificial intelligence in customer engagement. Customers should know whether they’re speaking to a human agent or a bot whenever interacting with your business.
  • Dependency: As helpful as AI tools are, relying solely on AI for customer engagement isn’t ideal. This raises concerns about the devaluation of human skills. Businesses need to consider the social impact of replacing human roles with AI and look for ways to repurpose their workforce for new opportunities—such as handling more complicated interactions or coming up with strategies and workflows.
  • Fairness: AI systems learn from data, which can occasionally reflect human biases. This can lead to unfair or biased outcomes in customer interactions. For example, suppose an AI system is trained on homogeneous data. It might offer poorer service to customers from excluded demographics.

It’s time to power up your customer engagement with AI

Target audience scoring customer experience and consumer engagement with a high rating

The future of customer engagement is AI-powered—and the future is now. It’s time you know that modern consumers aren’t just wishing for instant and seamless customer experiences, they’re already expecting them.

In a time where technology is at our fingertips, businesses (whether enterprises or small businesses) must step up to meet these evolving customer demands and that means using AI in customer engagement. 

Ready to leverage AI to transform your customer engagement? If you’re not sure where to start, that’s where we come in.

Contact AI Operator and start working with our consultants. We can create custom AI prompts to ensure that your journey into AI-powered customer engagement is seamless, efficient, and effective.