AI is becoming an important tool in customer service, changing how businesses and customers interact every day. By making tasks easier and quicker, AI helps address some of the most common customer service issues—like slow responses, limited customer control, and a lack of help outside of business hours.

When customers use AI tools like chatbots or digital assistants, they know they’re speaking to a machine, but they value the faster response times and around-the-clock support. Emarketer reports that 49% of US adults have used an AI chatbot for customer service in the past 12 months, according to November 2023 data from Google and Ipsos.

When used effectively, AI  can help  streamline customer service tasks and scale  support team operations. Beyond enhancing the customer experience, it can help brands reduce costs, increase efficiency, and save time. 

For these reasons (and more), more businesses are investing in AI to elevate their customer service. 

According to data from HubSpot’s State of Service 2024 report, 84% of survey respondents said AI/automation tools will be instrumental in helping them meet customer service expectations. In addition, 86% said AI will transform the experience customers get with their company, and 75% also agree that AI/automation tools will help improve customer service response time.

For customers, it’s all about feeling in control and getting the assistance they need without a long wait. For businesses, the goal is to keep customers satisfied. By combining traditional customer service with AI tools, companies can create positive experiences that make a real difference.

In this blog, we’ll dive into the ways AI can elevate support and streamline efficiency — paving the way for a smoother, more satisfying customer experience — and show you how you can incorporate AI into your customer service operations. 

What is AI in customer service? 

AI is already playing a major role in customer service, and it’s only going to grow. AI technologies such as natural language processing (NLP), speech recognition, and machine learning, are helping customer support teams deliver seamless experiences by taking some of the load off human agents.

Gartner even predicts that by 2025, 80% of customer service and support organizations will be using generative AI to improve agent productivity and customer experience. This makes it essential for you to get a solid understanding of how AI tools work and what they can bring to customer support.

So, what’s driving the rise of AI in customer service? For one, AI tools can handle routine tasks and automate workflows, allowing agents to focus on more complex issues. They can also predict customer needs, offering personalized recommendations based on browsing history, demographics, and trends — all of which help enhance customer satisfaction and loyalty.

Common AI tools in customer support include:

• AI chatbots that handle customer inquiries around the clock.
• Generative AI tools like ChatGPT, which can help write responses to customer questions.
• Routing tools that direct service requests to the right agent quickly and efficiently.

AI is transforming customer support, and it’s clear that this technology is here to stay.

Top 6 benefits of AI in customer service 

There are several benefits of AI-based customer service, but let’s take a look at the 6 most popular ones: : 

1.Reduce average handling time (AHT) 

Average handle time (AHT) is the average length of a customer's call. Customers want quick answers and resolutions, and ideally, they'd love it if everything gets handled in one go — they don’t want to keep reaching out about the same issue. Reducing the AHT is one way to enhance operational efficiency. 

That’s where AI-driven customer support can help. AI-powered chatbots reduce hold times by instantly responding to customers’ common queries using your company’s knowledge bases and past interactions, improving AHT, first response and resolution times, and customer satisfaction scores (CSATs). 

Example: If a customer asks for product-related information, AI-powered chatbots can quickly search through knowledge bases and recommend relevant videos and FAQs to help the user. 

2.Uncover insights by analyzing large volumes of customer data 

AI-driven customer service platforms can help you analyze large volumes of customer data using machine learning and natural language processing algorithms. This means you can now easily scan your customers' browsing history, feedback, and social media interactions, to unlock valuable insights. 

With these insights, you can: 

• Recognize behavior patterns and trends for customer profiling and segmentation 
• Assess customer satisfaction levels, anticipate problems, and predict churns
• Customize sales and marketing campaigns and increase revenue

3.Offer omnichannel support 

AI helps you provide omnichannel customer support, connecting with users through  their preferred touchpoints, whether that’s social media, websites, or messaging apps.

💡Tip: Integrate an omnichannel desktop with your existing business systems to centralize customer information and provide agents with quick access to context. This ensures that  even if a customer starts a conversation on Instagram, asks a question on your website, and chats with your WhatsAppr chatbot, the interaction remains seamless and efficient. 

4.Deliver hyper-personalized experiences

Two-thirds of all respondents for a 2023 survey by Statista revealed that they’re open to buying products/services recommended to them by generative AI.

AI can curate personalized customer experiences by adapting to a customer's tone and using user data to send birthday or anniversary wishes with special discounts. This, in turn, boosts customer satisfaction and retention.

5.Scale your customer service and business 

With AI-powered customer service, scaling your business becomes seamless as it grows. AI chatbots can handle countless conversations quickly and efficiently while prioritizing urgent queries.

The result? You can handle peak hours without the need for extra hiring, allowing your  agents to focus on  complex issues and high-value interactions  that truly need  a human touch. Plus, businesses can stay online 24×7 and provide support to their customers.

6.Automate and streamline customer service workflows 

AI-driven customer service solutions automate routine workflows, helping you reduce agent burnout and improve productivity. Insights from a 2023 Statista survey revealed that 40% of all respondents felt AI has made their work a lot easier. 

A few ways in which AI can streamline customer service workflows include:

• Intelligent ticket triaging and assignment
• Transcribing customer calls into written texts
• Offering proactive support throughout the customer lifecycle 
• Sending agent notifications to follow up on pending customer service tickets 
• Automatically handling calls, greeting users, and directing them to the right agent 

What to consider when implementing AI in customer service? 

AI tools can benefit both your business and your customers. Consider these criteria when implementing AI in customer service: 

Expertise and accuracy 

While AI can efficiently handle simple queries and provide accurate answers, some AI-powered tools may struggle with  more nuanced questions. It's important to choose a tool that’s trained on large datasets of customer conversations and can identify customer sentiments and intents, ensuring seamless customer service.

Data security and compliance

Customer service involves handling  large volumes of customer data, so it’s vital  to select a tool with transparent privacy and compliance standards to ensure data security.

Integration capabilities

Pick an AI tool that integrates with your existing business systems and ensures real-time data synchronization across platforms. This facilitates swift, accurate responses for customers.

Budget and implementation 

Factor in the costs of hardware, software, implementation, and licensing when incorporating AI into your workflows. Don’t forget to account for employee training and potential downtime during the transition.

How to incorporate AI in customer service

Let's explore some ways through which you can utilize AI to optimize customer service: 

Set up customer service chatbots

AI chatbots are widely used by businesses to improve efficiency, provide quick responses to customers, and reduce costs. These bots leverage natural language models to accurately interpret customer queries and respond in a friendly, human-like manner.

The best part? You can use conversational AI technologies to offer customer support 24/7, regardless of business hours, time zones, or holidays.

For instance, Plivo CX’s AI agent can efficiently manage peak times by handling multiple interactions simultaneously and providing instant responses. The benefits? Reduced customer wait times and the ability to free up agents for more complex queries.

Automate content generation 

With generative AI-powered tools, you no longer have to struggle to curate personalized messages and fresh, engaging content for emails. They can quickly and easily brainstorm ideas and automate content creation for emails, newsletters, customer responses, and more.

Set up intelligent call routing and IVR 

AI can also help with intelligent call routing (ICR) and interactive voice response (IVR) systems, improving the efficiency of customer support agents and reducing customer wait times.

Here's how an ICR system works:

• Imagine a caller reaches out to your brand regarding a product issue. The ICR system collects the caller data, including the issue, date, time, location, caller ID, and past purchases.
• It then analyzes this data against predefined routing rules and agent factors such as expertise, language preference, and availability, to decide the most appropriate agent.
• The ICR system then routes the call to the respective agent for resolution or lets the caller wait in the queue if the agent is unavailable.

Now, let’s look at IVR systems. They can automatically greet customers using their personal details and provide intuitive options for further assistance. Once the caller chooses an option, the IVR system responds with  pre-recorded prompts, routes customers to the right departments, or helps the caller switch to another channel for resolution. 

Plivo CX's customizable IVR system lets callers to self-select options for quicker routing, shorter wait times, and faster resolution. The system also assigns callers to the same agents for a better customer experience and automatically collects vital CSAT scores after each call. 

Analyze customer sentiment  

Customer data is gold, but sifting through it and mining insights manually can be a challenging task. So why not let automation take care of this? Yes, AI can do the heavy lifting for you by analyzing sentiments and emotions in customer reviews and feedback. 

These AI algorithms can swiftly analyze even large volumes of social media interactions, feedback, and surveys, to detect customer emotions and classify positive, neutral, and negative sentiments. You can then use these valuable insights to enhance your products. You can also train the chatbots to be more empathetic and understanding towards customers by analyzing data related to customer service.

Automate email management 

AI-powered customer service tools can automate customer service and transform the way you manage your inbox. They can swiftly analyze email subject lines and content to prioritize emails based on their context and urgency. 

Offer multilingual support 

With AI customer service, you can offer support in your customers’ preferred language without hiring more people. AI tools can automatically detect the customer's language, translate them for agents, and provide answers in their language. They can even detect the customer's location to adjust conversations based on their linguistic and cultural preferences. 

Get started with AI in customer service using Plivo CX

Implementing AI in customer service can significantly enhance customer experience and  empower your customer support agents  through effective automation. 

Plivo CX is an all-in-one, cloud-based omnichannel platform designed to help businesses provide top-notch customer support across various channels. Here’s how it helps:

• Through its unified agent desktop, your team can manage conversations via email, voice, SMS, WhatsApp, and live chat, all from a single interface. This not only streamlines your operations but also ensures a cohesive experience for your customers.
• Calls are efficiently directed to the right agents using skills-based routing, while multi-language support helps you connect with customers worldwide.
• A highlight of Plivo CX is its integration with OpenAI-powered chatbots, reducing live agent requirements by 50%. These chatbots can be trained to manage routine inquiries, allowing your team to focus on more complex issues.
• The no-code visual workflow builder simplifies the creation of custom workflows and automations.
• The platform also offers seamless integration with your existing systems — be it CRM, ERP, order management, payment solutions, or helpdesk tools. Plus, real-time analytics and customizable reports provide actionable insights into your team's performance and customer engagement.
• Features like call recording, internal notes, and collaboration tools make it easier for your team to share knowledge and drive continuous improvement.
• The platform leverages Plivo’s award-winning premium carrier network with low latency. It supports outbound voice calls to more than 220 countries and territories, with features like call recording for agent training.
• Above all, Plivo CX offers enterprise-grade security features and complies with SOC-2, GDPR, HIPAA, and PCI DSS, ensuring your customer data is safeguarded and your support processes align with industry regulations.

Want to see how Plivo CX can automate and transform your customer service and customer experience? Schedule a demo today!

A 2023 Gartner study shows that 80% of companies are using AI to improve customer experience.

The numbers don’t lie—AI is transforming customer service, and the Gartner study is one of many surveys to demonstrate that. 

In this article, we have compiled an extensive list of statistics that underlines AI’s impact areas in reshaping the future of customer support.

How AI is changing customer service

With AI, companies are reimagining customer service and improving customer experiences. As reactive support quickly becomes a thing of the past, AI is also helping them be more proactive and do more for the customers, for example: 

AI chatbots provide 24/7 availability

AI chatbots enable round-the-clock customer support, ensuring that inquiries are addressed without delays. This is particularly beneficial for companies with global operations, as chatbots can cater to customers across different time zones.

Improves efficiency and speed in handling inquiries

AI chatbots can handle multiple inquiries simultaneously, significantly reducing wait times for customers. They can provide instant answers to common questions and basic troubleshooting tasks, leading to faster resolution and higher satisfaction rates.

Enables personalized and human-like interactions

By analyzing customer data, AI can tailor responses to individual preferences, creating more personalized experiences. Advances in natural language processing allow chatbots to engage in more natural, contextual conversations.

Increases agent productivity and reduces costs

AI can automate repetitive tasks and handle high volumes of queries at a fraction of the cost of human agents. Moreover, AI-powered agent assistance tools can also guide agents with suggested responses, leading to faster resolution times.

Provides valuable insights for continuous improvement

By analyzing customer interactions across channels, AI can uncover patterns and trends that help businesses optimize their products, services, and support. For example, sentiment analysis can detect customer emotions and help identify areas for improvement.

54 statistics highlighting the use of AI in customer service

It’s safe to say that AI is no longer the future of customer service—it's already changing the way companies interact with their customers. Businesses that used to rely on reactive support are now moving toward AI-driven solutions that predict what customers need before they even ask.

Let’s go over some of the latest data points that illustrate the impact of AI on customer service:

Growth of AI in customer service

Want to see how AI is becoming the backbone of customer service? Check out these numbers:

1. 80% of companies are either using or planning to adopt AI-powered chatbots for customer service by 2025.

2. IBM Global AI Adoption Index reports that in 2024, 26% of customer service professionals will have integrated AI into their daily workflows or are experimenting with it.

3. 35% of organizations are using AI to improve customer service agent efficiency in 2024.

4. Deloitte suggests that 15% of contact centers currently use generative AI capabilities to accelerate customer authentication, summarize and simplify solution options, and provide automated call summaries and follow-up recommendations.

5. The AI customer service sector is expected to hit $4.1 billion by 2027. 

6. Between 2024 and 2030, the customer experience management (CXM) market is projected to grow at a CAGR of 15.8%.

7. Salesforce data shows that 95% of decision-makers at companies with AI report reduced costs and time savings, while 92% believe generative AI improves their customer service. Moreover, 83% plan to increase AI investments next year, with only 6% opting out of AI plans.

8. IBM reports that 74% of executives say AI will fundamentally change their approach to customer experience, 74% believe AI will shift customer perceptions of their brand, and 41% already have an AI strategy. 

9. In 2024, 26% of contact centers plan to implement AI in customer experience.  42% of contact centers plan to adopt it by 2025, and 17% aim to do so after 2026. 

10. 35% of companies are using or considering using natural language processing solutions in customer care—second only to security—in 2024. 

11. 25% of companies are considering using AI customer service automation for customer care in 2024, while 35% are using AI to speed up decision-making and improve customer experiences. (IBM)

How AI improves customer service efficiency and productivity

The real power of AI lies in its ability to combine speed, precision, and personalization. It doesn’t wait for problems to surface—AI anticipates them, analyzes customer behavior, and delivers proactive solutions. This creates smoother experiences for customers and builds stronger, long-term relationships. 

Here’s what customer service and experience professionals have noted about using AI: 

12. Companies using AI report a 37% drop in first response times compared to those without automation. 

13. AkzoNobel used AI to reduce their average response time from almost six hours to just 70 minutes. 

14. With chatbots, businesses reduce their customer service staffing needs by up to 68% during peak seasons and 51% throughout the year. 

15. AI automation helps companies resolve tickets 52% faster compared to those without it. 

16. Unity successfully deployed an AI agent to help its support team. This reduced ticket volumes by 8,000 and resulted in $1.3 million in savings. 

17. Conversational AI within contact centers will cut agent labor costs by $80 billion in 2026. 

18. AI adoption leads to a 35% cost reduction in customer service operations and a 32% revenue increase. 

19. According to KPMG, for every $1 investment in AI, businesses see an average return of $3.5, with 5% of companies reporting a return of $8. 

20. AI chatbots help streamline the buying process and lower customer service costs by 30%. 

21. Support agents using AI handle 13.8% more customer inquiries per hour. 

22. Deloitte suggests that companies using AI are 35% less likely to face situations where agents feel overwhelmed by too much information during calls. 

23. ​​AI classifications of service issues and automatic routing of contacts increase contact center productivity by 1.2 hours each day. 

24. AI-enabled customer service teams save 45% of the time spent on calls, resolve customer issues 44% faster, and experience a 35% increase in the quality and consistency of support. 

25. Intercom notes that of the teams that are using AI, 11-30% of customer support volume gets resolved through AI, which helps support reps work on trickier queries. 

26. AI saves customer service teams time in areas like feedback analysis (35%), generating responses from the knowledge base (34%), expanding notes into full replies (28%), and summarizing conversations (25%). 

How AI improves customer experience 

AI can improve customer service by offering instant solutions to customers and helping businesses personalize the customer experience at scale. 

The following data underscores this trend:

27. As per a HubSpot report, 90% of customers now expect an instant response when reaching out with a service query. 

28. 61% of consumers prefer faster replies from AI over waiting to talk to a human customer service representative. 

29. 68% of users appreciate the quickness of chatbot responses. 

30. A 2023 global survey revealed that 44% of consumers appreciate chatbots for helping them find product information before making a purchase. 

31. Consumers show strong interest in AI capabilities, with 52% wanting AI to help them during product experiences, 47% favoring personalized offers, and 42% looking for AI-driven product suggestions. 

Use of AI as chatbots 

Chatbots handle queries 24/7, provide instant answers, and free up human agents to focus on complex issues. 

Let’s look at how AI chatbots are impacting customer service:

32. 49% of U.S. adults have interacted with an AI-powered chatbot for customer service in the past year. 

33. 7% of businesses regularly use IT help desk chatbots to manage common inquiries. 

34. Nearly 75% of U.S. business owners in 2023 said AI improved customer experience through instant messaging, such as chatbots. 

35. 44% of companies anticipate using AI chatbots within the next two years—a growth of 132%. 

36. 36% of marketing leaders report using chatbots and AI-based customer support, while 20% plan to implement them within six months. 

39. 34% of consumers find AI chatbots helpful in customer service, though 43% believe there is still room for improvement. 

38. 25% of companies will rely on chatbots as their primary customer service tool by 2027. 

39. Chatbots are predicted to save businesses up to 2.5 billion hours of work by the end of 2024. 

40. AI chatbots can manage up to 80% of routine tasks and customer inquiries. 

41. 75% of customers feel that chatbots struggle with complex issues and often fail to provide accurate answers. 

42. Resolution rates for chatbot users vary widely, from 17% for billing issues to 58% for returns or cancellations. 

43. 85% of consumers feel their issues usually require the assistance of human customer support agents. 

44. 35% of consumers believe chatbots can solve their problems efficiently in most cases. 

Challenges of using AI in customer service

Customers are increasingly wary of how their data is used, and AI systems raise concerns about privacy, security, and even surveillance. 

While AI offers undeniable benefits, trust remains a huge barrier to the full acceptance of AI in customer service. 

Some statistics that highlight these concerns include the following:

45. 85% of people acknowledge the benefits of AI, but only 50% believe those benefits outweigh the potential risks. 

46. 61% of customers are wary about trusting AI systems, with 67% reporting low to moderate acceptance of AI. 

47. 30% of consumers say a negative experience with a chatbot would push them to purchase from a different brand. 

48. 53% of customers would consider switching to a competitor if they discovered AI was being used for customer service. 

49. According to a 2023 survey, 90% of people said they prefer interacting with a human for customer service over a chatbot. Of these, 61% believed humans understand their needs better, 53% believed humans provide more thorough answers, 52% said humans are less frustrating, and 51% thought humans offer more options for resolving problems. 

50. 59% of consumers feel that AI has caused businesses to lose the "human touch" in customer service. 

51. When it comes to AI in customer service, only 41% of those under 34 have negative opinions, compared to 72% of people over 65. 

52. 64% of customers would rather companies avoid using AI for customer service altogether. 

How Plivo CX helps you leverage AI for customer service

AI is transforming customer service and helping brands achieve lower operational costs, higher revenue, more efficient customer service, and happier customers. 

Enhance customer satisfaction and boost your bottom line with Plivo CX, the AI-powered, omnichannel customer support platform designed for small businesses. 

The platform offers these top AI-driven features, and more:

• AI-Powered self-service chatbots: Plivo CX offers OpenAI-developed AI chatbots trained on your support content to provide accurate, conversational responses. These chatbots handle routine inquiries, guide customers to relevant information, and escalate complex issues with detailed notes and summaries to human agents when necessary. 
• Omnichannel support: The platform unifies various communication channels—such as email, voice, SMS/MMS, WhatsApp, and live chat—into a single interface. This integration ensures seamless transitions between channels, maintaining context and continuity in customer interactions.
• More productivity: Automate and personalize customer interactions with AI agents that integrate with your CRM and custom APIs, delivering instant support and freeing up your team's valuable time.
• Proactive customer service: Ensure seamless customer service with AI voice bots that proactively handle inquiries 24/7, regardless of the communication channel.
• Improved response times: Reduce response times and enhance customer satisfaction with AI that prioritizes critical tickets. Customize AI agents to ensure consistent brand messaging and strict adherence to your company policies.

Book a demo today to learn more!