Explore the impact of AI-driven CX automation, its benefits and pitfalls. Learn why merging AI with human intuition is the key to effective customer experience.

The Gist

• Unified CX challenge. Brands struggle to maintain consistent CX across platforms.
• AI investments rise. 50% of US marketers increased AI for CX in 2022.
• Not a panacea. Some brands wrongly view AI as the ultimate CX automation solution.
• Human-AI balance. AI handles routine, humans manage critical, empathetic tasks.

Customer experience (CX) is the engine that drives the relationship between a brand and its customers. 

But there are many moving parts to a customer experience and customers now expect a seamless and personalized online shopping experience every time. As a result, maintaining a unified CX across websites, mobile apps, physical stores and social media is an expensive and time-consuming challenge for marketing teams. 

While CX automation is not a silver bullet, it does address customer experience challenges head-on. Nearly half of US marketers increased CX-related AI investments in 2022, according to a report from Insider Intelligence and eMarketer. 

It’s easy to understand why marketers and CX teams turn to artificial intelligence (AI) and machine learning (ML). After all, CX automation helps streamline activities such as: 

• Routine customer support requests: CX automation handles basic customer interactions 24/7 (via chatbots) without the need for human interaction 
• Data analytics and personalization: AI and ML tools can collect and analyze customer data from different sources (website, purchase history, surveys, social media) to create detailed profiles of each customer and then personalize brand interactions with each customer.
• Cost savings: By automating repetitive tasks, brands reduce the costs of employing a full-time staff. Additionally, automation helps decrease the likelihood of costly errors made by humans. 

Executives report a desire for AI-enhanced CX, with 70% believing their industry is ready to adopt CX automation, according to IBM. Consumers share this desire, with 86% of consumers in a Forbes Advisor survey approving of businesses using AI to create a better customer experience.

But despite the appetite for CX automation, AI is not guaranteed to improve CX just by deploying it. For all the increased use of CX automation, customer service levels in 2021-2022 were down despite more AI implementations, according to an NPS report from Qualtrics XM Institute.

Brands that have invested in AI for CX but have not seen improvement in customer satisfaction and retention are likely viewing AI as a panacea when, in fact, it’s just another tool in the customer experience journey. “The main way brands misuse AI and automation is when they rely too heavily on the technology without enough human involvement and insight,” said Kate O’Neill, author, host of “The Tech Humanist Show,” and founder of KO Insights.

Let’s explore how companies mishandle CX automation and how they can take a more balanced approach to integrating AI tools.

You’re Over-relying on Technology for CX Automation

Chatbots are designed for routine inquiries about the status of an order or the steps for getting a refund. But as every consumer knows, customer support interactions can get complicated fast, and chatbots and virtual assistants aren’t good at “complicated.” 

Whether you’re a retailer, hospital or bank, if you depend solely on chatbots for customer support with no strategy for handing off inquiries to human agents, you’ll inevitably feel the wrath of frustrated customers. 

“If a brand relies too heavily on AI-powered chatbots to handle customer inquiries without offering human support for edge cases, customers may feel unheard and uncared for — which is especially troubling when they have problems that carry emotional burdens, such as when canceling services of a deceased loved one,” said O’Neill. 

“This results in a negative customer experience, and potentially a public relations fiasco if customers share their frustrations on social media.”

You’re Not Allowing Humans to Guide AI Integrations

AI alone won’t automatically solve your CX shortcomings. A balance is required. AI is there to handle straightforward CX tasks, while humans handle requests that demand critical thinking and empathy.

A good rule of thumb is not to use AI when a human is needed. While AI for CX can certainly add value and save money for brands, if it’s deployed solely as a cost-cutter and not part of an overarching CX strategy, it may make the customer experience worse. 

• Chatbots could misunderstand nuanced customer requests and provide the wrong information … repeatedly.
• Chabots may provide insensitive responses to a customer who is becoming emotional and angry.
• If the brand leans too much on technology for CX, it may struggle to recover when there are system failures or downtime. You live by the bot, you die by the bot.

One key aspect of a CX automation strategy is knowing the right time to transition from chatbot to human agent based on the customer’s needs and emotional state. 

“When customers interact with AI-powered systems, it is crucial to ensure smooth handoffs to human agents when necessary,” said O’Neill. “This ensures that complex or sensitive issues can be handled effectively and empathetically.”

Thankfully, most AI tools for CX have algorithms that can be programmed to recognize — through sentiment analysis or keyword patterns — when it’s time to route a customer from a chatbot to person.

Related Article: 6 AI Automation Trends in Omnichannel CX

You’re Not Letting CX Automation Be a Company-Wide Initiative

AI’s integration with the customer experience affects nearly every department at a company, including IT, marketing, customer support, data analytics, and all the way up to executive leadership. 

However, implementing AI in silos can lead to inconsistencies in the way customer requests are handled and may result in missed opportunities because insights and new ideas are not being shared.

Simon Kriss, chief innovation officer of the Customer Experience Innovation Institute and author of the new book “The AI Empowered Customer Experience,” said that AI implementations for CX do not rest on IT’s shoulders alone; they are a company-wide initiative that need a collaborative approach to avoid the pitfalls of departmental silos and poor communication. 

“Leaders need to create messaging to their teams about what AI is and is not, and how it will likely be used in your organization,” said Kriss. “Don’t abdicate the responsibility of AI adoption to the IT department. The low-code nature of modern AI means there is more work for the business side to do than the IT side.”

The Importance of Embracing CX Automation Strategically

Merging AI tools with the customer experience is no longer a luxury … it’s a necessity. 

However, staying on the right side of AI-driven CX hinges on treating AI tools as not just a cost-cutting tactic, but as part of a broad CX automation strategy that merges AI with human wisdom and intuition.

Brands that embrace this balance will be in the best position to navigate changing customer expectations and deliver the most cost-effective, seamless and efficient CX possible. 

The following  Shane O’Neill from 2023 provides their research perspective. HERE