AI in Customer Service: Everything Your SMB Needs to Know

“AI in customer service”: That phrase either excites you or scares you as a business owner.  

The exciting part is what you can do with AI, like reducing service-related questions, creating a knowledge base with ChatGPT, and automating everything in between. 

The scary part is letting AI into your business. You’re replacing personal touch with robots that have never met your customers, don’t have the same experience as you, and don’t share the same passion that you have for this industry.  

AI will continue to grow in popularity, but that doesn’t mean you should be afraid of it. Instead, this post will explain how AI is good for customer service and how you can leverage it to create incredible experiences at your small business.

What is AI customer service?

In customer service, AI is predictive or automated technology that enhances customer experiences. These tools are used by employees and customers to streamline workflows, access information, and solve problems efficiently. 

Small business owners should leverage AI for customer service because it increases productivity and allows you to create more personalized interactions as your business grows over time. 

Benefits of AI in Customer Service 

Let’s dive into a few more benefits of using AI in customer service.

1. Increases Productivity

In one study, 5,000 support agents were given an AI tool to respond to customer inquiries. The people who used the tool were 14% more productive than those who didn’t. 

It’s a simple example, but plenty of studies show how, when used properly, AI can improve productivity. From responding to questions to monitoring your Google Business Profile, AI is like having a do-it-all employee in your workplace.  

You might be thinking, “Will these ‘do-it-all employees’ become my only employees?” But fear not, because AI can’t do everything on its own. It needs your team to confirm that it’s working properly and being used correctly by your customers. While AI makes your team more productive, it’s not a replacement for your trusted employees.

2. Improves Self-Service Resources

Self-service is a resource that helps customers solve problems on their own. For example, Thryv has a Support Center where customers can search a database for information related to their questions. They might find how-to articles, user comments, and support videos like this one that guide them through basic troubleshooting steps.  

AI not only improves resources like these, but it can create them from scratch, too. Tools like Scribe automatically generate knowledgebase articles so you can quickly upload them to your site. That means AI will produce a high-quality web page in just a few minutes, saving you time.

3. Enhances User Experience

Whether it’s a new feature on your website or smoother processes around your business, AI can help create better user experiences for your customers. They’ll either reap the benefits of your team having more time to answer questions or get quicker access to helpful tools and technology that solve problems for them. 

You can also use AI to enhance pre-purchase experiences. Take, for example, the wine brand, 19 Crimes, which added QR codes to its bottles that linked to an interactive story for each wine. That tells the customer more about the product, captures their attention, and gives them another reason to choose this brand over its competitors. 

4. Reduces Errors & Mistakes

AI can also save your business time by helping you double-check your work and dive deeper into complex or time-sensitive problems.  

For example, you might use an AI tool to automatically provide a solution to a customer’s problem. Rather than research, troubleshoot, and explain your solution, all you do is double-check that the AI provided the right information and forward it to your customer. It’s fast and efficient and reduces the chance of human error when troubleshooting support cases.

5. Streamlines Internal & External Communication

You may have heard of generative and conversational AI. (Don’t worry, we’ll explain these more in a moment.) For now, just know that they are AI tools that enable automated conversations; whether it’s a chatbot communicating with customers, or a shared inbox that suggests pre-written responses to emails, AI makes it easier to collaborate with anyone at your organization. 

Pro Tip: These customer communication tools can help any small business improve team collaboration.  

8 Examples of AI in Customer Service 

Let’s review a few more examples of how AI is used in customer service.  

AI Chatbots

Look at the bottom right corner of this web page. See that smiling orange square? That’s a chatbot, and ours is named Thryver. 

If you give it a click, you can see that our chatbot will connect you to pricing pages, demos, and even a human rep who can answer questions you have about our product.

Some chatbots can schedule appointments, troubleshoot technical issues, and collect customer reviews after online purchases. They’re customizable, so you can program them to do several things to provide a better self-service experience and reduce the number of support cases your team must respond to. 

Conversational AI

Conversational AI simulates human communication. You might be familiar with interactive conversational AI assistants like Siri or Alexa, which you can ask questions and get solutions in response, in a conversational way.  

While you may have a smart speaker powered by something like Alexa, another use for this type of technology is phone support. Companies like Verizon, have automated assistants that field incoming calls and route them to humans, or provide a solution on the spot. Nobody likes to be stuck on hold, and with conversational AI, you can move customers quickly through the call queue without adding an additional tax on your staff. 

Generative AI

Generative AI produces content like text, visuals, audio, video, and more. You might be familiar with tools like DALL·E that produce AI-generated images based on a user’s prompts.

There’s a lot of buzz around these products, and people have legitimate questions about their use. Should you use them? How much should you use them? What can you use them for?  

For the sake of simplicity, here’s what you need to know about generative AI:  

1. Use it – or at least, explore it. It will save you time and money.  
2. Don’t create junk. Prioritize quality over quantity. Bad content will always be bad content so it doesn’t matter how quickly you can churn it out.
3. Don’t try to pass off AI-generated content as wholly original or your own. 

For effective ways to use generative AI, check out the tips in this video:  

Workflow Automation 

Workflow automation is a fancy way of saying, “using AI to do things more efficiently.” It involves connecting software and using pre-set cues to trigger a series of actions.   

Let’s use this webpage as an example: 

When I fill out this form, it will trigger a few results. First, it will pay the golf course for this transaction. Second, it will schedule my tee time for the date and time selected. And, finally, it will send me an email confirming my reservation. 

Call Routing 

Incoming calls are automatically forwarded to different people at a business with the help of an AI call router. Customers simply say a key phrase, like “billing” or “speak with a rep,” and the server reroutes that caller to the destination of their choosing. 

This is useful if you don’t have a designated person to operate your phone. Rather than running back and forth to answer calls, you can let AI forward the most important ones to your own line while sending non-urgent issues to your voicemail. 

Sentiment Analysis 

Sentiment analysis interprets the emotion behind a message. For example, if you post something on social media, you can see if certain comments are positive or negative. This tool will come back with a series of metrics and recommendations, like the screenshot below: 

Image Source 

Advanced Analytics 

When it comes to reporting, AI isn’t just building better charts. It’s diving deep into data and extracting insights that spot trends quicker than if you were manually reviewing it. In some cases, it can even predict what is going to happen next based on the data you provide. 

Here’s an example from Google Analytics:  

This tool answers questions about my data and compares it to other data points. For example, I can ask it to compare revenue from users who discovered my business through different social media channels. That way, I know which social accounts I should be spending most of my time and money on.  

Pro Tip: You can also use an AI tool to analyze heatmaps, which track actions that users take on your web page.  

Reputation Management

Reputation management is the practice of monitoring and improving your brand’s online presence. It’s a crucial function for any business, but some organizations don’t have the resources to hire a full-time reputation manager.  

AI, however, can help you manage your online listings and monitor social media pages. It can provide responses to customer reviews, evaluate the strength of your business profile, and flag negative messages that might pose a risk to your online reputation. 

Pro-Tip: A local listings management tool can track all your online business profiles.

How to Use AI for Customer Service

Before you go all in on AI, let’s review some best practices that you should consider when using this technology. 

1. Focus on processes, not on interactions.

The best AI solutions are the ones that enhance your business’s workflow. These are tedious tasks like writing a follow-up email, routing a call, and liking a customer’s comment that can be automated with AI.   

This gives your team more time to invest in human-to-human interactions that can’t be replaced by a robot. Focus your efforts on reducing roadblocks for your employees, and they’ll have more time to invest their energy into complicated or time-sensitive tasks that have the most impact on customer retention. 

2. Don’t abandon human customer service.

If you thought this was your chance to replace a workplace nemesis, we hate to break it to you, but AI reinforces the need for human customer service. Not only do humans make sure chatbots and conversational AI are working as expected, but they also are present if something goes wrong and a customer needs to speak with them. 

Even if your chatbot looks, feels, and sounds like a person, it can’t really replace the touch of human customer support. That’s because if a customer knows they are speaking with a real person, they might respect you for personally taking the time to respond to them. They feel more assured that they can get a solution than if they were stuck with a chatbot.

3. Start small, then adopt more tools over time.

Some customers, and even some of your employees, may be skeptical of AI. It’s a hot topic and everyone has their own opinions of this technology and how it’s growing.  

With that in mind, it’s important to gradually introduce tools over time. Test out a feature, then see how your audience responds. After that, make adjustments and add new features, once your employees and customers are comfortable. This lets you continuously invest in AI without rocking the boat too much.

4. Train your staff on how to use AI.

It’s okay if your staff has limited experience with AI. It’s an emerging field and very few people are true experts.  

Fortunately, there are plenty of resources available that can teach you how to use AI. Blogs like ours are one example, but there’s also YouTube, Reddit, forums, and more that can provide product-specific instructions. Lead the charge on your team and show them how useful AI can be when applied to the right circumstances. 

5. Collect feedback constantly.

Customer feedback keeps all your efforts in check. You can ask people how they feel about new features, services, or anything else that you changed with the help of AI.

You can also survey your most loyal customers and ask them to test out features prior to rolling them out to your customer base. That way, you’ll have more confidence that an AI tool will be well-received before sharing it with your target audience. 

Getting Started with AI in Customer Service 

There’s a lot of talk about AI right now, making it easy for small business owners to get lost in all the information. If you’re wondering how to implement AI into customer service, follow the tips in this post and gradually introduce it within your company. The more familiar you get with it now, the more comfortable you’ll be as this technology grows and progresses over time.