AI and Customer Experience: CX Mini Masterclass – E64

Welcome to Decoding the Customer, a podcast about customer experience and how to realize customer-centric change in today’s dynamic business world. I’m Julia Ahlfeldt, certified customer experience professional, business advisor, and host of this program. Thanks so much for tuning in. If you’re new to the show, welcome.

If you’re a returning listener, thanks, and it’s great to have you back. This episode is part of my CX Mini Masterclass series here on Decoding the Customer. These weekly episodes are published each Thursday and designed to be punchy, bite-sized overviews of key customer experience concepts and ideas for how you can help your organization thrive through customer centricity. Whether you’re new to the field of customer experience, are preparing for the CCXP exam, or are a seasoned professional looking to brush up on a few basics, this series will help you improve your knowledge, skills, and performance to stand out as a CX professional.

And, if you’re keen to do some more intensive online training in the field of customer experience, stay tuned at the end of this episode for an exclusive listener discount code from CX University. This is episode 64, the fourth episode for the month of November, and the last episode for 2019. I’m taking a little break from publishing new episodes during the month of December. I’m doing this so that I can recharge my batteries and get some great content lined up for you, my valued listener, in 2020.

This month, I’ve been fortunate to feature three amazing guest experts, Ben Matram, Pierre Demmes, and Stephanie Thum. But I wanted to round out the year with a mini masterclass from me. I’ve chosen a topic that has gotten a lot of buzz this year, artificial intelligence. As many of you may know, I do a bit of public speaking at conferences and private events.

And I tell you, 2019 has been the year of artificial intelligence talks. It’s been a great learning experience for me. And today, I’m condensing the highlights into a little express package just for you. So, if you’re looking for an overview of AI and how this is set to impact the world of customer experience, then stay tuned.

As always, if you’re out and about while listening to this and hear something that you’d like to remember later, don’t worry about writing it down. You can find an overview of the key concepts that we’ve covered today in the show notes for this episode, which are on my website, juliaahlfeldt.com or decodingthecustomer.com. First things first, let’s define artificial intelligence. People throw this term around and just assume that everyone knows what it is.

While we might understand the concept because it forms part of business conversation these days, it’s still important to take a second to clarify the definition. You’ll notice I do that a lot on the program. All right. Artificial intelligence is the ability of a machine to perform tasks commonly associated with intelligent beings.

This includes things like the ability to reason, discover meaning, generalize, or learn from past experiences. The field of AI research started at Dartmouth College in the US during the mid-1950s. As an intrepid group of researchers, developed computer programs that could solve algebra word problems and learn to play checkers. You may be asking yourself, if AI has been around for so long, why is this a relatively new topic in the world of customer experience?

The answer to this has two parts. First, there was a long road of R&D between the birth of AI in the 1950s and the launch of sophisticated computer systems like IBM Watson in the last 10 years or so. Second, since the power of AI is underpinned by data processing, large quantities of meaningful data are needed for AI to learn from past behavior, predict actions, et cetera. The proliferation of smartphones and popularity of e-commerce have given rise to a great sea of consumer data, but this is also relatively recent.

If we think about the pre-digital consumer world, or even the consumer world we knew five or 10 years ago, we were dealing with a lot less data. The critical combination of customer data and sophisticated AI technology has only really come together in the last couple of years. Hence, this is now a buzzword in the CX world and it wasn’t before. Artificial intelligence has loads of applications in the field of customer experience.

If we have the power to process so much information about our customers, it’s not a huge leap to understand that there are probably many powerful applications for this technology when it comes to improving customer journeys and how experiences are managed. Within the current AI technology, I see several different categories of application for artificial intelligence in customer experience. The first, the most well-known and possibly the most obvious of these, is in personalized customer experiences. To provide a personalized customer experience, we have to understand the user.

Historically, this might have been achieved through a long-standing rapport between a shop attendant and a frequent customer. If we have millions of customers though, that’s a much taller order. Where AI enables us to understand all of our customers as individuals, it unlocks a whole world of possibilities to more precisely meet each customer’s needs. E-commerce’s Recommended Products was one of the first ways that we saw AI apply to mass customization of experiences.

But personalization has evolved beyond this. Disney, ever the customer experience pace setter, uses what they call the magic band wristbands at their parks. These wristbands are smart devices, and they function as a room key, a ticket, and a payment tool, all the while gathering information about what guests are doing. Based on information about guest behaviors, the wristbands can also recommend activities of interest and route people to attractions within the park that are less busy.

Not all personalized interactions are created equal, however. The goal with personalized experiences is for brands to provide relevant information at the right time through the right channel. Personalization should help customers discover new products, services, or experiences that fill their needs, and which they might not have discovered on their own, but without becoming creepy. And that’s the magic word, creepy.

Moving on to another application for artificial intelligence in customer experience, let’s look at service support, and yes, the infamous chatbot. The proliferation of smartphones has given rise to chat-based support, and AI-powered web or messenger-based chatbots have proven to be an effective first line of defense for basic query resolution. Proposed legislation in the state of California may require chatbots to identify themselves as such. Organizations should be prepared to be transparent about the use of this technology, understanding that doing so might impact customer perceptions and their adoption of these technologies.

Chatbots can also be used behind the scenes to tackle more complex issues, ones that still require human intervention. In this context, an in-house chatbot can support the agents who are helping customers. The South African media giant, Multichoice, launched just such a behind-the-scenes chatbot. ToMe, as they named Her, is an on-demand chat-based resource for call center agents, should they have questions while assisting a customer.

Preliminary results show that ToMe, this Her chatbot, has helped decrease both call time and the training runway for new agents. When we think about AI, we should remember to think about applications that the customer sees, as well as those that have been behind the line of customer visibility. And if you’d like to learn more about that, be sure to check out episode 59 on service blueprinting. Finally, I wanted to talk about augmented and virtual reality.

Some say that AR and VR, as they’re known, are the next big frontier in customer experience. And artificial intelligence is the backbone of both. These technologies rely on massive amounts of real-time data processing, at a scale that would be impossible without artificial intelligence. Augmented and virtual reality enable brands to connect with customers in new ways.

Customers can experience products remotely and have immersive brand experiences. Special guest Jacques Oberholzer and I spoke about this in episode 61. But augmented reality and virtual reality is definitely an exciting space. By way of just one example, American beauty retailer Sephora has leveraged this technology to augment the way it helps customers explore and experiment with beauty products.

Through its virtual artist app, Sephora enables customers to virtually try on different makeup products with augmented reality. The customer can use the front-facing camera on their smartphone to superimpose selected products on their face in real time. Much as the makeup counter assistant did in the days of old, the virtual artist app can also recommend products based on the customer’s features or complexion and can reference past purchases to suggest new styles that might match the customer’s tastes. Only time will tell.

But personally, I think this is definitely a space to watch. So there you have it. A little tech talk to round out 2019 CX Mini Masterclasses. If you’re looking for help with CX innovation in your organization, please get in touch.

I’d be happy to explore how I could help. You can reach me via email, tweet, or LinkedIn message. My handle is at Julia Ahlfeldt, and my full contact details are also listed on my website, juliaahlfeldt.com or decodingthecustomer.com. Are you keen to do some more intensive online training in the field of customer experience?

If so, I’d encourage you to check out CX University. They offer a broad array of e-learning options that you can access anywhere and anytime. Their offering includes practice tests for the CCXP exam, and what’s great is that all this is available on a flexible monthly subscription plan, meaning that you don’t have to fork over hundreds of dollars to get started. As of the time of publishing this episode, plans including CX courses and practice exam questions start at just $75 per month.

Listeners of this podcast can use the discount code Podcast10 to get 10 percent off the first month subscription, and help support the show. All right. Thanks so much, and I’ll see you in 2020.