artificial intelligence

AI Is transforming customer experience – but not always for the better

Have you ever had the experience where customer service tries to get you to use a chatbot (“the online service has all the information our representatives have”), but you know it’s not going to answer your question and you just want to get to a human? That got me wondering: are chatbots actually improving the customer experience, or are they just one more hoop we have to jump through?

It turns out that, while many companies are racing to adopt AI for customer service, research shows that customer satisfaction hinges on how AI is used – not whether it’s used at all.

AI can be brilliant – when it’s used thoughtfully. Across industries, AI is quietly powering some truly impressive improvements in customer experience. For example:

  • Sephora uses an AI chatbot to recommend makeup based on your skin tone, weather, and preferences. Customers say it feels like having a personal stylist on call.
  • Capital One’s AI assistant, Eno, flags suspicious charges or unexpected fees before you even notice. That kind of proactive help builds trust.
  • Tripadvisor now offers an AI-powered itinerary planner that can build a multi-day travel agenda based on your interests, budget, and travel dates—all in seconds.

These tools work well because they respect the customer’s time and reduce friction. They enhance the experience without replacing the human touch entirely.

However, AI doesn’t always lead to great customer service. Customers expect to escalate to a human when needed – a but many chatbots don’t make that easy. Forrester found that fewer than 20% of chatbot interactions are fully resolved without human support. In other words, customers are often left feeling stuck. And when that happens, satisfaction drops. Fast.

The problem isn’t AI itself – it’s poor implementation:

  • Bots that can’t understand nuance
  • Rigid, rule-based scripts
  • No clear way to “talk to a person”
  • Privacy and data concerns

What works best is the “human-in-the-loop” model: AI handles the repetitive, high-volume tasks, and humans step in for the complex, emotional, or nuanced ones. That is, AI works with humans, not instead of them.

MetLife, for example, uses AI to listen in on service calls and provide live coaching to agents – suggesting responses or flagging when a customer sounds frustrated. The agent stays in charge, but gets a digital co-pilot. That’s a smart use of AI. It boosts speed and empathy.

If you’re considering how to use AI to improve your company’s customer experience, here are three places to start:

  • Look for friction: Where are customers getting stuck, delayed, or dropped? AI can help – but only if you’ve clearly mapped those trouble spots first.
  • Respect escalation: Don’t make customers “prove” they deserve to talk to a human. Make the human option easy, fast, and friendly.
  • Keep it transparent: Let people know when they’re talking to a bot. Let them know what the bot can and can’t do. Set expectations up front.

And finally: make sure your AI is improving the emotional experience – not just the technical one.

The bottom line: AI can absolutely improve customer experience. But it doesn’t always. The difference lies in whether the tool is designed to make customers feel more understood – or just more processed.

Like most things in business (and life), tech works best when it’s paired with a human mindset. That means empathy, curiosity, and a deep understanding of what your customers actually need.

Want to know more about how AI can improve the customer experience at your company? Ask about our presentation “AI-Driven Customer Experience: Unlocking Loyalty, Retention, and Growth.” Email me at info at bureauwest.com.

Sources: “Consumer Insights: Trust In AI In The US, 2024,” Forrester, October 6, 2024; Bureau West research

Posted on by Jay Zaltzman

Hyper-personalization gives companies an edge

It’s not just for Amazon and Netflix anymore

Image by Freepik

Hyper-personalization means delivering highly relevant and individualized experiences to customers. It results in significantly higher customer engagement and loyalty. It’s an advanced marketing strategy that used to only be accessible to companies such as Amazon and Netflix, but with the advent of more accessible AI tools, it now has the potential to be a game-changer for businesses of all sizes.

How hyper-personalization works:

  • Hyper-personalization leverages data to dive deep into individual preferences. By analyzing purchase history, browsing behavior, and even social media activity, businesses can tailor their offerings to match the unique tastes and needs of each customer. This isn’t about segmenting markets; it’s about understanding the individual at a granular level.
  • One of the standout benefits of hyper-personalization is real-time relevance. When a customer interacts with a brand, hyper-personalized systems adjust the messaging and offers in real-time. For instance, a clothing retailer can use weather data to suggest raincoats on a gloomy day or sun hats during a heatwave. This level of responsiveness makes customers feel like the brand is genuinely attuned to their current situation.
  • Beyond the data and algorithms, hyper-personalization builds emotional connections. When customers feel recognized and valued, their loyalty deepens. Think of the joy of receiving a special offer on your birthday or a personalized thank-you note after a purchase. These touches create memorable moments that enhance brand loyalty.

With accessible AI tools and customer data platforms (CDPs), even small businesses can implement sophisticated personalization strategies. Companies like HubSpot and Segment offer solutions that allow businesses to gather and analyze customer data effectively, enabling hyper-personalization without breaking the bank.

Hyper-personalization requires a shift in how we conduct market research. Rather than looking for demographic or psychographic segments, companies need to consider the parameters on which to personalize. We need to look for what makes customers differ from one another and then use digital tools to cater to those differences.

Want to learn how to hyper-personalize your marketing? Let’s talk to your customers and find out! Email me at info bureauwest.com and we can discuss the best approach.

Sources: “Taking Hyper-Personalization to the Next Level,” CMS Newswire, 4/16/24; “Driving Performance With Content Hyper-Personalization Through AI And LLMs,” Forbes, 2/23/24, “Why Brands Need to Embrace Hyper-Personalization to Stay Relevant,” The Branding Journal, 2/5/24

Posted on by Jay Zaltzman

Do better research

I just got back from the QRCA Worldwide Qualitative Research Conference in Lisbon – there was a lot of great content packed into 2.5 days, as well as a dinner at the amazing Palacio Conde d’Obidos, shown here.

It occurred to me that we were all there for the same reason: to learn ways to do better research.  And I think we did!  Here are a few of the highlights for me:

Lucy Foylan gave a great presentation about the differences between conducting research online and in-person.  Her agency, The Nursery in the UK, compared the two and they found the people were more likely to work to build consensus during in-person focus groups and more willing to disagree with each other during webcam groups.  While some might think that’s a reason to conduct all focus groups online, remember that consensus building also happens in real life.  Witnessing how participants persuade one another can provide valuable insights for our clients.  Depending on the objectives of the research, we might benefit from in-person groups, webcam groups, or a mix of both – where we examine the differences between the two.

There were several sessions about the impact of AI on qualitative research, including presentations by Daniel Berkal and Sidi Lemine, followed by a panel discussion which I moderated, with Simon Shaw, Tom Woodnut and Paul Kingsley-Smith.  Some of my takeaways:

  • Daniel talked about ways AI can be used so we can do our work better and more efficiently.  He uses Chat GPT to help with screener development, with ideas for discussion guides, and to summarize responses, and Adobe Firefly to create images for proposals and reports.
  • Sidi talked about using AI tools to recognize emotions in research participants and how they’re surprisingly accurate across cultures.  While a smile or a frown may mean different things in different cultures, it turns out micro-expressions are remarkably consistent throughout the world.  Specifically, Sidi said he likes the following tools: Phebi.ai, Emozo, Immersion.
  • While there are many great ways AI can help us in our work, our panel participants focused on what AI can’t do, and why we researchers are still needed.  One example: in a recent focus group project, participants all said they liked one of three concepts best, but I realized that was because it was the shortest concept, not because of the content of the concept.  If we had relied on AI to conduct the research, it would have taken those responses at face value and not probed further.  Simon said that we qualitative researchers are too humble and don’t do enough to explain the value we bring.  I agree!

Those are just some of the highlights.  The Worldwide Conference reminded me of how important it is for us to keep learning and adding to our skills.  The next opportunity is coming up soon: QRCA’s annual conference will take place in Denver, January 22-25, 2024.  I recommend it!  Register here: https://www.qrca.org/event/2024-annual-conference .

How can we add value to your next research project?  Email me at info at bureauwest.com and let’s discuss!

Sources: QRCA 2023 Worldwide Qualitative Research Conference: “A Hybrid Future: Exploring Human Interactions On- and Off-line,” Lucy Foylan; “Navigating Qual in the Age of AI,” Daniel Berkal; “Can Emotion AI Remove Bias in Global Research?,” Sidi Lemine; “What AI Can – And Can’t – Do For Qual,” Jay Zaltzman, Simon Shaw, Paul Kingsley-Smith, Tom Woodnut

Posted on by Jay Zaltzman

Learn to use AI now… before the competition

Artificial intelligence (AI) has been in the news lately because a recent advance in the technology now makes AI both significantly more advanced and more accessible to businesses. While in the past, companies needed big budgets and teams of developers to utilize AI, current tools have opened the technology to medium and even small companies.

Marketing is one area where companies are benefitting from AI.  A few examples:

  • Companies are using AI to analyze data on customer behavior, demographics, and purchase history to create personalized marketing campaigns that are more likely to resonate with individual customers.
  • Retailers are using AI-powered chatbots to provide personalized product recommendations to customers based on their browsing history and purchase history.
  • Restaurants are using AI-powered predictive analytics to analyze customer data and make predictions about which menu items are likely to be popular, allowing them to optimize their menu and improve their sales.

And there are many benefits beyond marketing, such as:

  • Companies are uncovering new business opportunities by using AI to analyze customer behavior and preferences.
  • Banks and other businesses are using AI to detect and prevent fraud.
  • Manufacturers are using AI-powered predictive maintenance systems to predict when equipment is likely to fail, so that maintenance can be scheduled before a breakdown occurs.

And that’s just a small sample of the ways AI is being used.  To be fair, many people have concerns about AI, such as job losses and potential abuse of AI systems.  But like it or not, these advances are coming and companies that don’t get involved may find themselves at a competitive disadvantage.

I’m starting a mastermind group for those interested in discussing how to utilize AI to benefit their companies.  Please let me know if you’d like to participate.  Email me at info at bureauwest.com.

Sources: Bureau West research; ChatGPT; “How AI could empower any business,” Andrew Ng, TED2022; Graphic: Designed by pikisuperstar / Freepik

Posted on by Jay Zaltzman