How is artificial intelligence reshaping the customer service industry and improving retention rates? It looks as though the machines have a few tricks up their sleeves, and could reshape how organisations approach customer service techniques as we move into the future.
Let’s begin to unpack how artificial intelligence is helping companies operating in a somewhat stagnant industry when it comes to customer retention rates, and poor customer service: telecommunications companies.
Studies from the past five-years have shown that telecommunications companies are struggling to create new revenue streams within their industry. To make things worse, these same companies have invested billions into the development of new networks like 5G connectivity.
In light of dwindling revenue streams and major investments into their infrastructures, a number of these telcos are looking to shore-up their long-term financials with even more investments channeling into the world of artificial intelligence.
The most recent example of this is the move from Vodafone, who teamed up with Google for a six-year deal.
Leif-Olof Wallin, vice president of research at Gartner has said that “Telcos are investing an insane amount of money into network equipment and spectrum licences for 4G and 5G, but they are struggling with profitability to get return on their investments, because the investments are extremely high.”
“They need to operate more efficiently, to reduce costs, which is why they’re using public cloud services.”
Gartner predicts that the globe’s public cloud computing market will grow to $332 billion in 2021, a 23% increase over the year before.
Perhaps more significantly, Vodafone is looking to minimise its operating expenses and most notably, retain customers in the interest of saving money. It is significantly more expensive to acquire new customers than retain existing customers, and these telcos recognise this.
As a result, they’re looking – and investing – in artificial intelligence to reshape their customer service model and improve retention rates. Gartner’s research indicates that the public is much more receptive to companies that allow them to update their contract or upgrade their handset online, rather than calling the telco themselves.
Vodafone is now looking at how artificial intelligence can underpin its customer service model, and automate certain services, in the hope that more than 50% of its services will be automated in the near future.
The first iteration of this automated customer service came in the form of a chatbot known as TOBi, which Vodafone says handles more than 900,000 conversations with customers each month.
How Artificial Intelligence is Reshaping Customer Service
Artificial intelligence is helping to reshape Vodafone’s customer service and customer retention rates by eliminating the need to call a customer service member to sort out relatively simple problems.
The chatbot is powered by IBM’s Watson artificial intelligence engine, which is able to access customer records and help the customer make certain service changes online. Vodafone has signed a deal with Amazon Web Services to “bring business applications and computing power closer to where the data is located, using the cloud and 5G mobile internet – a concept called ‘edge computing,’” according to the BBC’s Mary-Ann Russon.
The company says that its most recent agreement with Google will allow its to expand the automation of its customer service methods while increasing customer retention and satisfaction rates as the speed and accuracy of its services increases.
So far, Vodafone says it has more than 700 potential uses for the emerging technologies that will help it minimise costs and increase efficiency, speed and delivery of its customer service system and overall operating efficiency.
Nick McQuire, who works as chief of research at CCS Insight, has told the BBC that “this is an important announcement which highlights the level of technology transformation happening in telecoms which is perhaps more dramatic than in any other industry at the moment.”
McQuire continued to explain that “with the changes brought on by the pandemic, along with the transition to 5G and the cloud happening across the sector, operators are getting aggressive in turning to data analytics and machine learning to help them drive improvements to operations, and above all, improve the customer experience.”