How to use AI to optimize customer experience

The advent of generative AI is not only changing the way businesses operate, it is also changing the nature of how small businesses compete with larger players in their industries.

“Times are changing,” writes Professors Oguz A. Acar and Andres Gvirtz of King's College London Business School in the Harvard Business Review. “Generative AI is giving small businesses capabilities that were previously unattainable, and if leveraged strategically, it could help level the playing field.” Shopify President Harley Finkelstein is among the business leaders who agree with this assessment.

Small business owners have realized this and are taking strategic steps to capitalize on the opportunities that AI presents. Two recent surveys show how quickly this understanding is spreading. A survey by the Bipartisan Policy Center and Morning Consult found that “Small business owners' engagement with AI has come a long way in the past two years.”

In fact, 83% of small business owners using AI find it helpful. More than half say AI has had a positive impact on their business growth. Perhaps most importantly, nonpartisan polling data shows that over the next two years, 56% expect AI to help them compete with larger companies for business and sales.

Meanwhile, a GoDaddy survey of small business owners found that 68% believe generative AI tools in particular “level the playing field and allow us to compete with larger businesses.”

This should be a wake-up call for startups and other small and medium-sized businesses around the world, as well as large corporations. After all, it's a two-way street.

Sensing this threat, some large companies are investing in AI. Efforts to be at the forefront of this new technology are essential because for incumbents, “the best defense is an attack,” Bain & Company wrote in a blog post. The most successful companies “throw out legacy thinking, effectively monitor emerging business threats, invest in clear R&D and M&A strategies, and fearlessly disrupt themselves,” the global management consulting firm said.

Deloitte's latest Enterprise Quarterly Report, “The State of Generative AI,” found that even these companies acknowledge they still have a long way to go: “The percentage of organizations that report they have already achieved 'largely' or 'very large' expected benefits ranges from 18% to 36%, depending on the type of benefit they are pursuing,” the report states.

A big part of the challenge is that companies don't know where to focus first. AI tools can automate so many tasks across virtually every business function, so leaders must make strategic choices. In working with companies of all sizes, I know what they should prioritize: using AI to optimize customer experience.

CXM Transformation

For businesses today, nothing is more important than giving their customers the best experience possible. Chris Reaburn, Head of Strategy Execution at Nextiva, explains it in a blog post: “Increasing customer satisfaction and retention in an increasingly competitive world requires taking a proactive approach to defining a playbook for your team. That's where successful Customer Experience Management (CXM) comes in. CXM acts like a map, guiding business owners through every detail of their customer's journey.”

Generative AI can make customer experiences smoother than ever before, and it starts with building unified communications solutions using AI-powered tools that bring together every interaction anyone in your company has with each customer, on every platform.

Once all this information is integrated, generative AI tools can derive insights from it. These tools can also advise businesses on the next steps to take, such as what to say to customers or what offers to make, based on what is likely to be most effective.

I tell business leaders that today's customers don't compare companies to each other, they compare companies to the best experience they've had. Not surprisingly, customers have little tolerance for awkward or slow interactions, for having to repeat information, or for not getting the answers they're looking for.

Using AI to achieve this kind of mass personalization at scale allows companies to replace traditional CRM (customer relationship management) systems that were originally designed for static channels that don't allow for updates or personalization.

What was unimaginable in previous generations is now literally available at our fingertips. Organizations that use AI to transform their customer experiences will gain an advantage over their competitors, no matter how long they've dominated the market.