What drives investment ROI for Al in Customer Service?

Here’s our complete guide to the true ROI of AI in customer support.

A difficult economic environment means every business is striving to accomplish more with less. Even the biggest brands are slashing budgets related to technology investment, hiring, and marketing. Yet despite all this, demand for advanced AI solutions continues to grow.

Some studies show that by the end of 2024, enterprises will spend more than $100 billion on AI solutions and infrastructure. The main reason for this consistent focus on AI evolution, is the return on investment intelligent solutions can deliver.

The trouble is, while many companies already investing in AI have seen the benefits of the right technology for themselves, newcomers to the landscape often struggle to calculate the true ROI of AI tools. It’s easy to get bogged down focusing on clear numbers, like how much an AI system costs.

However, if we dive a little deeper, we can see that the potential AI has to not only save companies money, but increase their revenue, is astronomical.

Calculating the ROI of AI in Customer Service

The benefits of AI are well-documented in the contact center. The right tools can boost productivity, enhance customer experience and retention rates, and transform efficiency. What’s not as clear is the impact AI could have on your bottom line.

There are a few studies out there sharing valuable quantitative insights. For instance, one of the major challenges contact centers face today, comes from the costs associated with long waiting times, and longer average handling times, resulting in a higher “cost per call”.

A study of 18 large companies found that the average cost per call is currently between $2.70 and $5.60, but AI can help companies reduce their costs to well below this benchmark. For instance, generative AI-enabled virtual assistants and chatbots can automate the handling of numerous customer queries, reducing the strain on team members.

However, to quantify the true return on investment of AI, we need to go beyond simply looking at “cost per call” metrics. Let’s dive a little deeper into the financial benefits of an AI investment.

Automating Expensive, Time-Consuming Tasks

One of the most obvious ways AI in customer service saves companies money, and opens the door for higher revenue, is through automation.

With a tool like Cempresso AI Studio, companies can create bots that can automatically triage customer support tickets and messages, streamlining the process of routing customers to the right agent. The right bot can even improve call deflection, determining when a customer’s questions can be answered by a chatbot, and when they need to be transferred to an agent.

You can also design a generative AI bot that can answer common questions for customers 24/7, giving agents more time to focus on more complex, high-value interactions that can’t be automated. This reduces the number of agents you actually need in your contact center, and improves the overall performance of the employees you do have.

McKinsey found that one company increased its resolution rate by 14% per hour, reduced handling times by 9%, and increased customer satisfaction rates, just with generative AI. The analyst noted that applying generative AI to customer care functions could lead to a productivity value boost of between 30-40%. However, AI isn’t just an excellent tool for capitalizing on “call deflection” opportunities with self-service solutions.

It can also automate a range of other processes, such as:

• Recording and transcribing calls, then uploading data about a customer to a customer data platform, or CRM system, without human intervention.
• Analyzing customer sentiment and previous calls, to detect at-risk customers, and opportunities for cross-selling or up-selling, increasing revenue.
• Generating self-help content for customers, such as FAQ pages, guides, articles, and even step-by-step video content.

Enhancing Agent Productivity Through AI Empowerment

One of the major benefits of AI in customer support, is the ability to empower and enhance agent performance. The more productive and efficient your team members are, the less you’ll pay to run your contact center overall. According to Zendesk, it’s AI tool can increase productivity by 10%, yielding a potential $146,000 in annual savings.

Often, companies align the productivity cost savings of AI with the concept of automation. While automation certainly helps to reduce operational costs (as mentioned above), AI doesn’t just automate, it also empowers and informs.

Generative AI tools can summarize conversations for agents, providing agents with real-time step-by-step guidance that helps them reduce call resolution times. AI systems can automatically surface information for an agent about a customer during a discussion, responding to keywords spoken, and insights into sentiment.

They can even save employees time in the long-term, with predictive analytics. Predictive insights can help teams forecast future customer behaviors and trends in advance. This means teams can implement strategies to mitigate the need for customers to call their contact center. For instance, if you know you get an influx of calls about delivery times around the holiday period, you can send a message out to all of your customers letting them know about delivery delays.

AI can even help employees complete everyday tasks more effectively, from creating personalized email follow-up messages, to analyzing data.

Driving Higher Quality Customer Interactions

Similar to the ROI of AI in customer service, the overall return on investment you can expect from delivering an excellent customer experience can be difficult to quantify. However, there are various ways that excellent customer experiences contribute to a company’s bottom line. For instance:

• Improved customer retention: The more customers you can retain, the higher your customer lifetime value will be. Studies show that existing customers are significantly more profitable than new customers, often spending 31% more on each purchase.
• Greater customer loyalty: Loyal customers don’t just spend more with your company, they also help to drive new customers to your organization. Word of mouth marketing from happy customers can reduce your promotional costs, and your customer acquisition costs.
• Increased revenue: Studies show that 84% of companies who improve their customer experience also increase their revenue. That’s because customers spend up to 140% more when they have a positive experience with your brand, and 86% will actively spend more if they know they’ll get a great experience.

In fact, brands who view customer service as a value center, rather than a cost center, achieve 3.5 times greater revenue growth. While there’s more to delivering an excellent customer experience than simply implementing the right AI tools, it’s a good start.

Studies show consumers who engage with conversational AI are typically more satisfied, because they benefit from reduced holding times, and get a more personalized experience.

Generative AI tools can conduct sentiment analysis in real-time, and provide guidance to employees that helps them to deliver a more meaningful, empathetic interaction. Additionally, because these tools can offer 24/7 service, speed up call routing and handling times, and provide employees with access to personal customer data, they can enhance experiences in a variety of ways.

AI Increases Revenue Opportunities

As we noted in the previous section, generative AI has an incredible ability to increase your potential to earn revenue, in any industry. It’s not just improved customer experiences and retention that increase your revenue either.

Generative AI algorithms can analyze customer preferences and purchasing histories over time, and provide agents with guided strategies for upselling and cross-selling. This opens the door to significantly increase the average order value of each customer. Additionally, AI-powered bots can use the same data to send personalized recommendations to customers on your website, or via a messaging app, driving more customers to your product or service.

With predictive AI tools, companies can determine which customers are most likely to buy a new product, or figure out when someone needs to make a repeat purchase, and reach out to them proactively. AI can even help to prevent customers from abandoning their shopping cart on an eCommerce website.

Installing a bot on your site that detects when a customer is about to leave a page and asks them about any queries or concerns, they had can be a huge revenue saver. It gives you a chance to avoid losing a customer, by addressing their objections, and even offering discounts in real-time.

AI can even automate parts of the lead nurturing process, sending emails and messages to customers at the perfect time to capture their attention and encourage them to buy something. There are even tools that can tailor each marketing message to the location, or previous purchases of your customers.

Streamlining Data Analysis with Artificial Intelligence

When it comes to analyzing the potential ROI of AI in customer service, the impact intelligent tools have on data analysis can’t be overlooked. AI tools can help companies to connect various crucial data points from throughout their ecosystem, for an in-depth guide into ways to reduce operational costs, and increase revenue.

With the right AI technology, companies can evaluate their processes and team performance, looking for potential bottlenecks that could be wasting time and money. You can rapidly identify which parts of your workflow can be automated, and even detect which of your marketing and sales campaigns are driving the biggest return on investment.

AI in customer service also allows companies to gather valuable insights into their target audience. The more you know about your customer’s journey, their pain points, goals, and decision-making process, the more you can optimize your sales and marketing campaigns.

If you know what causes different segments of your audience to convert, you can boost your chances of earning higher profits over time, with data-driven strategies. You can even detect which factors increase the likelihood of customer churn, to improve your retention rates.

For instance, if you notice that customers often abandon your SaaS company after struggling to use the software, you can create an automated AI-driven on-boarding strategy that teaches each customer how to get the most value from their investment.

Reducing On-boarding and Training Costs

While AI augments and enhances agent performance in the contact center, it doesn’t eliminate the need for human specialists. Customer service will always require a human element, as bots can’t replicate the empathy, compassion, and creativity of human beings (yet). However, AI can help you to get the most out of your human staff members, by enhancing training.

Advanced AI solutions, like Bulb Technologies’ Agent AI can provide team members with immersive coaching and training experiences, delivered in real-time. A customized bot can give your team members step-by-step instructions on how to address common customer issues, respond to queries, and even improve their rapport with frustrated customers.

These tools can suggest the next course of action to take in various scenarios, and even automate the process of collecting feedback for insights into agent performance. Plus, they can provide supervisors with valuable overviews of their teams’ strengths and weaknesses, then help them to generate comprehensive training resources, like courses and guides.

With AI, companies can streamline the process of on-boarding and up-skilling their agents, with real-time, automated training, accessible in any environment. This not only improves the agent experience, but it significantly reduces the risk of talent turnover, which can save your company a lot of money, particularly in a skills-short market.

The ROI of AI in Customer Service is Higher than You Think

Ultimately, there are costs involved in purchasing and implementing the latest AI technologies, but the return on investment is much greater than you’d think. AI not only improves operational efficiency, and boosts employee productivity, but it can transform customer service experiences, and open the door to new forms of revenue.

With the right AI tools, companies can increase their customer lifetime value rates, boost retention, and even lower the cost of customer acquisition and marketing. They can also save money on additional personnel, by automating tasks, and simplify the process of on-boarding and up-skilling staff.

When deployed correctly, generative AI can make your customer service strategy more powerful, and more cost effective than ever. Plus, thanks to Cempresso AI Agent Studio, the cost of developing your own intelligent solutions isn’t as high as it once was.

With our innovative and user-friendly platform for AI development and integration, there’s no need to spend a fortune on proprietary models and developers. Anyone can build a comprehensive AI-focused customer service strategy, without the complexity.

Contact Bulb Technologies today to learn how you can save money and increase revenue with Cempresso AI Agent Studio.