5 ways to boost customer retention with AI and measure it

As we move into the new year, many companies are still feeling the pinch – and so are their customers. Budget-conscious buyers are picking and choosing carefully when it comes to where to spend their money, with half of customers saying they’re willing to switch to less expensive brands to help them save.

Smart brands know that makes now the ideal time to focus on customer retention. Build a base of loyal repeat customers and you can stay ahead of the competition with:

  • Lower churn rates
  • Better lifetime value
  • Increased opportunities for cross-selling and offering upgrades
  • Natural brand ambassadors who want to share their positive experiences with other potential customers

I know creating consistently exceptional experiences, especially at scale, can be daunting. Enter AI! Use AI in your customer service strategy to enhance customer service and harness the magic of AI for customer retention and loyalty.

Ready to get started? 

5 strategies to use AI for customer retention

1. Adopt an AI-chatbot

Your customers want quick and relevant answers to their questions. But how can you compete with giant multinationals that have a team of assistants on hand 24/7?

The answer is an AI-powered chatbot. A chatbot helps you offer 24/7 availability, without compromising on customer service quality.

Chatbots help you answer queries faster, by handling common questions, and equipping agents with relevant information for each customer. 

Using a chatbot frees up your agents’ time to focus on more complex queries. Agents get to ditch the routine questions and customers get focused and personalized attention – that means both parties are happier.

Customers can ask your chatbot for quick answers, or let it know they need a human agent. They can choose how they want to get help.

We know there are risks with AI hallucinations, with one study finding that 80% of respondents are actively weighing the risks that generative AI could have on their business. To ensure your AI-chatbot only gives accurate information, choose a training-free model that leverages the content from your own knowledge base to draft responses.

2. Empower your team with an AI assistant

AI is the assistant your team didn’t know they needed. Use AI in customer service to help your agents provide the honest and timely communication your customers crave.

Plug your AI into your knowledge base and it can draft instant and accurate responses to customer queries. It can also give your agents an overview of all customers’ past interactions so they enter the conversation with all the information at hand, and customers don’t need to explain themselves repeatedly.

AI can also help you:

  • Automate routine tasks
  • Streamline order processing
  • Manage customer accounts 

Keep your team prepared for all queries with the help of AI.

3. Use AI to turbocharge personalization

Customers want to feel understood. Seventy-one percent of consumers expect companies to deliver personalized interactions. And seventy-six percent get frustrated when this doesn’t happen. 

Using personalization to tailor interactions is an effective way to show customers that you have their back.

AI can analyze customer sentiments to help agents better understand their feelings, and draft appropriate responses. We know some people worry that AI will make interactions less human, but AI can use data to create more human and empathetic answers.

Keeping personalized interactions consistent is a challenge. AI can help your agents create seamless, relevant, and consistent personal experiences across channels.

Whether you want to help your agents draft responses, provide better customer recommendations, or suggest knowledge base articles, AI can help. AI assists in tailoring interactions to each customer’s specific needs and preferences.

With AI in your back pocket you can deliver personalized experiences at scale, creating a welcoming atmosphere where customers feel seen and valued.

4. Harness AI’s data science capabilities

AI can clearly pull its weight in direct customer interactions and assisting your team. But AI can also be the data scientist you need.

Use AI to analyze customer service data and distill it into data-driven insights your CS team can use to find trends, and identify areas for improvement.

For example, AI eliminates the need for CS administrators to manually sift through extensive numbers of CSAT responses. With AI, this task can be accomplished with just one click, not only saving precious time but also encouraging CS managers to review feedback more frequently and efficiently. Additionally, AI’s ability to process CSAT data in various languages cuts costs and time for global companies. This enables your customer service team to more easily leverage CSAT for continuous improvements.

Similarly, looking at customer service data helps you understand the customer’s journey better. Customers might run into problems at different stages, such as during initial website exploration, while making a purchase decision, during the checkout process, or post-purchase when they might face issues with the product or require support. 

Your data can tell you where customers are in their journey when they need your assistance. Then you can work to reduce friction at these specific points, making the process smoother and more intuitive for customers, and increasing their loyalty.

5. Let AI be your customers’ multilingual guide

Customers want to interact with your brand in their preferred language. But if you have a global customer base, it can be difficult to communicate in all those different languages. If you can’t afford a team of multilingual global agents, it can feel next to impossible.

The good news is, you don’t need a multilingual team of agents. AI-powered translation tools can help you communicate across the globe. Communicating in customers’ preferred language can help with engagement and satisfaction.

You can also use AI to carry out sentiment analysis on logs in different languages, to find out how your global customers feel about your products, and customer service. 

How can you measure the impact of AI on customer retention?

There are lots of ways to use AI to boost customer retention. But you need to know how well it’s working so you don’t waste your time or investment.

Is your AI working for customer retention? Find out by by taking a look at these key metrics:

  • Customer Retention Rate (CRR). Keep an eye on the percentage of customers retained over a specific period. Compare the CRR before and after implementing AI.
  • Customer Satisfaction Score (CSAT). Ask customers for feedback on the quality of service received after AI integration. Compare historical data before AI to help you gauge whether AI is having a positive impact.
  • Net Promoter Score (NPS). Check NPS trends to assess the likelihood of customers recommending you after receiving AI-enhanced customer service. Higher NPS scores indicate positive customer sentiments, and that means more potential for retaining those customers.
  • Average Handling Time (AHT):  How long does it take to handle customer queries now that you’re using AI? Reduced AHT suggests that AI is speeding up the process, and helping to create a more efficient customer experience.
  • Response Time: How fast can your team respond to queries with the help of AI? Faster response times contribute to improved customer satisfaction and can positively influence retention.

Monitor these metrics to get insights on the impact of AI on customer satisfaction, and use the data to refine your customer retention strategy.

Craft a winning AI strategy for your customer service 

Customer service AI is the ideal teammate, ready to help your CS agents deliver first-class customer experiences. AI’s analytic abilities and automation capabilities can help you provide a level of attention and personalized assistance that will win customers’s hearts and loyalty.

That’s good news for your reputation, and your wallet. In 2013, merchants lost on average $9 for every new customer acquired, but today merchants lose $29, a 222% rise in the last eight years.

Start your AI strategy with a thoughtful implementation plan that incorporates AI into your CS operation in a way that supports customers and agents alike. Be sure to start tracking its effectiveness early, so you can keep refining your strategy.

Carefully planned AI for customer service helps you go above and beyond for your customers, so that when they’re considering where to spend their money, you’re the clear choice.


Francesca Valente

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