In 2020, Decathlon launched its digital assistant, ‘Deca.’ Quite soon, this move translated in a 65% reduction in support costs by automating customer inquiries. Similarly, KLM introduced their chatbot, BlueBot, which assists with bookings and flight information via platforms like Facebook Messenger. 

Meanwhile, AI has propelled companies like Sephora, whose online sales skyrocketed from $580 million to over $3 billion by 2023—an astonishing 415% increase!

All such examples point to a massive shift—the AI moment of customer service is here, and it is gradually becoming a strategic imperative. 

Instead of relying on thousands of support agents for repetitive tasks, AI agents can efficiently address customer needs. With AI managing repetitive inquiries, customers receive immediate, automated, and personalized responses, greatly enhancing their trust and loyalty to the brand.

In this blog post, we’ll learn more about AI agents and how they are redefining customer service. We'll also review some real-world examples to demonstrate how these tools can elevate the customer experience.

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What are AI agents?

Have you noticed those friendly pop-ups in the corner of websites offering assistance? These are some of the simplest examples of AI agents.

An AI agent is a software application designed to perform tasks independently, engaging in meaningful interactions with its environment, making decisions based on preset rules, and focusing on delivering the best possible outcomes with the information at hand.

In customer support, AI agents primarily take the form of chatbots and virtual assistants. They streamline inquiries by managing routine tasks and providing instant responses. 

This allows human agents to focus on more complex issues that require critical thinking and emotional intelligence, ultimately enhancing the overall customer experience.

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What are the benefits of AI agents? 

Picture this: a digital assistant that effortlessly tackles mundane tasks, leaving your team free to innovate and connect with customers. These savvy agents are not just streamlining operations; they’re becoming trusted allies for customers seeking support.

The benefits of AI agents are substantial, from enhancing efficiency to providing personalized service. Here is how they can change the way you do customer experience:

1. More efficiency

A recent working paper from the National Bureau of Economic Research highlights that AI-based conversational assistants can boost productivity in entry-level jobs by an impressive 34%. This means you can reallocate your human workforce to focus on higher-value tasks while letting AI handle the routine jobs. 

Take supply chain management, for example. AI agents are reshaping this field by analyzing massive datasets to predict demand, optimize inventory, and identify the best delivery routes—all in a fraction of the time it would take a human. 

Similarly, in customer service, AI-driven chatbots and virtual assistants enable businesses to address customer queries promptly and efficiently, providing 24/7 support that enhances customer satisfaction.

To put it simply, with AI agents, you not only increase efficiency but also empower your team to concentrate on what truly matters—driving innovation and growth.

2. Better savings

Investing in AI is a strategy for long-term growth and sustainability. According to a Gartner study, conversational AI is projected to cut labor costs by $80 billion by 2026. This means that contact centers using AI agents can dramatically boost profitability, positioning themselves for success in a competitive landscape. 

Every business invariably experiences peak and low times, making hiring and firing based on fluctuating workloads an unsustainable strategy. This is where AI agents become invaluable. Their scalability allows businesses to adapt quickly without the hefty investment in additional infrastructure. 

Not only does this scalability enhance operational efficiency, but it also significantly reduces reliance on human labor, leading to substantial cost savings over time.

3. Consistency and accuracy

With the vast amounts of data, businesses need to analyze—covering market research, customer behavior, and emerging trends—errors are expected. However, these can lead to significant setbacks for managers and business owners. 

AI agents offer a compelling solution.

These agents interact intelligently with their environment, continuously learning from data and insights. They can make autonomous decisions and act on them, adapting to real-time situations as they arise. This capability allows them to handle complex challenges effectively, reducing the risk of errors.

So, investing in AI agents means enhancing your decision-making processes and gaining confidence in your operations.

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Types of AI agents

Various types of AI agents are available for business operations, each serving a unique purpose. From chatbots and virtual assistants to predictive analytics agents and task automation tools, these AI-driven solutions further streamline processes and improve customer interactions.

Chatbots

Designed to handle customer inquiries in real time, chatbots are AI-powered tools that provide instant responses to common questions, assist with simple tasks, and guide users through processes. Their 24/7 availability enhances efficiency in customer service, minimizing the need for human intervention in routine tasks.

Virtual assistants

Utilizing AI, virtual assistants like Alexa and Siri perform a variety of tasks based on voice commands or text input. In customer support, they help schedule meetings, remind users of deadlines, and automate client interactions, significantly boosting productivity.

Automated response systems

These systems leverage AI to send predefined replies to common customer queries. Ensuring quick and consistent responses to repetitive inquiries—such as order statuses or account details—they free up human agents to focus on more complex issues that require a personal touch.

Intelligent agents

Acting autonomously, intelligent agents perform specific tasks based on user instructions or environmental cues. In customer support, they can monitor conversations, provide real-time suggestions, and trigger actions based on customer behavior, enhancing the overall interaction.

Conversational agents

Also known as advanced chatbots, conversational agents engage customers in dynamic dialogues. Utilizing natural language processing (NLP), they understand customer intent, ask follow-up questions, and deliver personalized responses, creating a more human-like interaction.

Recommendation systems

Analyzing customer data, recommendation systems offer tailored suggestions for products, services, or solutions. In support scenarios, they can direct users to helpful articles, FAQs, or next steps based on the customer’s specific issues, making the service experience more relevant.

Predictive analytics agents

These agents use data-driven models to anticipate trends and customer needs. In customer support, they can predict peak service times and identify potential issues before they escalate, enabling teams to allocate resources effectively.

Speech recognition agents

Converting spoken language into text, speech recognition agents facilitate hands-free interactions with systems. In customer support, they can transcribe calls, analyze sentiment, and automate voice-based tasks, improving accessibility and response accuracy.

Task automation agents

Focused on streamlining repetitive tasks like ticket generation and data entry, these agents empower customer support teams to concentrate on high-value activities. This not only increases overall efficiency but also reduces the margin for error. 

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Key capabilities of AI agents

With abilities like learning, reasoning, problem-solving, perception, and language comprehension, AI agents can perform tasks that traditionally required human intervention.

a. Understands and responds to customers naturally

One standout feature is their use of Natural Language Processing (NLP), which enables AI agents to understand and generate human language seamlessly. Chatbots and virtual assistants utilize NLP to engage with customers naturally, significantly improving response times and reducing the need for human input on routine queries. 

This is why, for customer support managers looking to scale operations, AI is an invaluable tool for enhancing service delivery.

b. Learns and improves over time

Moreover, the learning and adaptability of AI agents set them apart. Through machine learning, these systems analyze data and continuously improve their performance without requiring constant manual updates. This capability is especially beneficial in predicting customer needs, enhancing response accuracy, and optimizing workflows in a dynamic environment.

c. Solves problems and makes smart decisions

Finally, the reasoning and problem-solving abilities of AI agents allow them to tackle complex tasks effectively. In customer service, this might involve streamlining support processes, automating resource allocation, or identifying trends in customer behavior to proactively address potential issues.

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How do AI agents work?

Let’s take a look at how the agents typically function on a day-to-day basis in customer service scenarios:

1. Determine goals

AI agents start by figuring out what they need to achieve based on customer questions or instructions. This could mean answering a question, providing information, or helping with a request.

2. Perception and data grouping

Then, they gather real-time information from different sources, such as customer chats and past interactions. This helps them understand what customers need and anticipate their questions.

3. Data processing and analysis

After collecting data, the agents analyze it using smart algorithms and natural language processing (NLP). In this case, they interpret customer questions and find relevant answers from a large knowledge base.

4. Decision-making

Based on the analysis, AI agents now decide how to respond to customer inquiries. They can sort issues by importance and type, ensuring urgent requests get quick attention. However, for more complicated problems, they may pass the issue to human agents while providing helpful context.

5. Task implementation

The agent also carries out tasks by taking specific actions, like answering questions or providing solutions. It checks how well it is resolving the customer's issue and adjusts its approach if needed.

6. Feedback loop

After completing tasks, AI agents generally collect feedback from customers and look at the results of their interactions. This helps them improve their responses and strategies for future conversations.

7. Continuous learning

The agents use machine learning to get better over time. With each interaction, the agents learn from what worked well and what didn’t, helping them assist customers more effectively in the future.

8. Reporting and insights

Finally, AI agents analyze interaction data to find trends in customer behavior and preferences. This information can help businesses improve their services and increase customer satisfaction.

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Some notable use cases of AI agents

Now, let’s explore some compelling use cases that highlight the transformative power of AI agents in delivering exceptional service.

Personalization

Nothing impresses a frustrated customer more than personalized attention. With AI agents, providing that level of care becomes effortless. 

Take Siri on your iPhone, for instance. It tailors its recommendations based on your unique search patterns, music preferences, and even routes taken. This individualized approach not only makes customers feel valued but also fosters loyalty. 

Analyzing past interactions and preferences, AI agents deliver responses that resonate, enhancing satisfaction and turning happy customers into vocal advocates for your brand.

Handling FAQs

Many customers have similar questions, which can overwhelm human agents. AI agents excel in this area, effortlessly handling frequently asked questions without the risk of fatigue. 

For example, Zomato’s support system provides a menu of FAQs for users to choose from, making it easy for hungry customers to find the answers they need quickly and efficiently.

Automated ticketing

AI agents use built-in intelligence to automate ticket generation and resolve issues seamlessly. 

Consider Apple’s customer care: if you forget your Apple ID, you simply input your details, and the AI generates a ticket for you. You receive updates via email and phone, ensuring a smooth resolution process. This automation saves time and enhances the customer experience.

Feedback collection

Uber effectively uses AI agents for post-ride feedback collection. After each ride, users are prompted to rate their experience, and based on their ratings, AI can generate follow-up questions to delve into specific concerns. 

This proactive approach allows Uber to continuously refine its services while ensuring customers feel heard and valued.

Problem resolution

Spotify showcases AI agents in problem resolution through its virtual assistant. When users encounter playback issues or account problems, the AI chatbot swiftly gathers details and provides tailored solutions. 

Analyzing user data and recent activity offers specific troubleshooting steps, significantly improving the user experience with quick, automated responses.

Language translation

Google Translate exemplifies AI in language translation, using advanced neural machine translation technology. It translates entire sentences, considering the context for more accurate translations. 

Users can type, speak, or scan text for instant translation, making it invaluable for travelers and professionals needing real-time communication across language barriers.

Proactive customer engagements

Alexa sets the standard for proactive customer engagement. Amazon’s AI-driven strategies provide timely notifications based on user preferences. 

From order updates and product reordering suggestions to personalized content recommendations, Alexa keeps users informed and engaged, enhancing their overall experience.

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Future trends of AI agents in customer service

While the AI agent technology is still in its early stages, growing investments in these tools are likely to propel agentic systems to significant milestones and enable widespread deployment in the coming years.

McKinsey's latest The State of AI in early 2024 survey shows that more than 72% of companies are embracing AI solutions, with a notable surge in interest around generative AI. This growing momentum signals a pivotal shift in how businesses approach their strategic planning. 

Agent-driven automation has the potential to revolutionize entire industries, delivering unprecedented speed and efficiency that can redefine operational success. 

Also, the growing complexity and autonomy of AI agents present significant challenges and risks. Deploying these agents is like adding new team members—they require thorough testing, training, and coaching before they can operate independently. 

However, even in their early stages, the potential opportunities these virtual colleagues can unlock are vast and exciting. Embracing this innovation proactively can position organizations to harness the transformative power of AI agents for future success.

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Plivo CX: Adopt the best AI agent for customer service 

The future of AI agents in customer experience is brimming with exciting opportunities, from tailored services to voice-powered support. As these technologies advance, businesses that integrate AI-driven strategies will not only meet rising customer expectations but also craft memorable experiences that foster brand loyalty.

The takeaway is clear: AI isn't just a passing trend—it's the cornerstone of future customer engagement. 

You can now elevate your customer experience with the AI-driven customer service platform Plivo CX’s OpenAI-driven chatbots, which offer instant and personalized responses that turn service into a dynamic, engaging interaction. 

Here’s what Plivo CX’s chatbots can do for you: 

• Leverage your expertise: Integrate your custom knowledge base and train AI agents to make informed decisions, enabling them to make informed decisions based on your company's policies and brand guidelines.
• Take immediate action: AI agents can efficiently handle customer problems, including exchanges, information updates, and order tracking. This reduces average handling time and increases overall efficiency.
• Seamlessly escalate when needed: When AI agents cannot resolve an issue, they automatically hand over the issue to the most suitable agent. You can also equip your team with notes and summaries to effectively handle escalations.
• Always available: The agents are available 24/7 to handle customer questions. Conversations can be paused and resumed, ensuring a seamless experience.
• Easy to update: Plivo CX’s AI agents are simple and cost-effective to update, whether launching new products, promoting offers, or communicating policy changes.
• Make AI your own: Set boundaries to keep your AI agent on track. Align your AI agent with your company's identity, policies, and processes.

With additional features like the unified agent desktop facilitating seamless communication across channels—email, SMS, chat, WhatsApp, and voice—your support teams will operate more efficiently and effectively than ever before.

To try Plivo CX today, book a demo!