ARTIFICIAL INTELLIGENCE IN CUSTOMER ENGAGEMENT DO I.T. DECISION MAKERS BELIEVE THE HYPE?

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1.INTRODUCTION

Artificial intelligence (AI) is set to be one of the most powerful revenue generators in business. Research by consultants PwC, for example, predicts that AI will cause global GDP to shoot up 14% by 2030 and in the UK by more than 10% (or £232 billion).

The technology is so hot that tech giants such as Google, Facebook, Microsoft and Salesforce are snapping up AI software companies in anticipation of big returns.

While definitions of AI vary, millions of consumers are already accustomed to the technology through chatbots, using applications such as Amazon Alexa, or the Netflix video optimiser which uses viewers’ feedback to make personalised recommendations.

At Feefo, we are using natural language processing and sentiment analysis to help both businesses and consumers.

For consumers, Feefo have developed Smart Themes, which enables shoppers to make better-informed decisions, faster. Consumers can filter reviews to find what is most relevant to them far more quickly than by any other means. They can make an informed decision to buy without having to waste time trawling through hundreds of reviews or visiting other websites to give them confidence.

For businesses, we have developed Performance Profiling which enables companies to quickly understand the aspects of their products and service that are performing well, and those that potentially need improving. For brands, this means they can focus their efforts more effectively, and ultimately generate more revenue and deliver the best possible service for their customers.

While AI is clearly on the roadmap, experience however, shows that many organisations remain uncertain about the advantages of AI or fail to understand how AI can transform the way they attract, engage and keep customers.

This research explores attitudes to AI among 100 senior IT decision makers in UK organisations across multiple industries. We discover whether these IT decision makers are eager to embrace AI, and if their organisations have grasped how AI can transform customer-engagement, and most importantly, how do they see it working in practice?

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AREAS OF QUESTIONING INCLUDE:

Where do they feel the biggest impact of AI will be felt on customer-interactions?

What kind of AI functionality do they think is best?

Where and how much are they investing?

Once the technology is implemented, what will constitute success?

KEY FINDINGS AT A GLANCE:There is much enthusiasm about AI among IT decision makers

Customer engagement is where the technology will have the biggest and most immediate impact

Customer service analysis and intervention is where AI will most commonly be deployed

There is a big skills gap in developing AI for customer-engagement

AI is primarily seen as an IT or technical challenge, rather than a business problem

2. WHAT DO WE EXPECT OF AI AND HOW WILL IT WORK?

There is little doubt among the senior IT decision makers

in our research that AI will live up to all the hype as a tool

and enabler in customer engagement.

Some 96% of respondents agreed that the technology

will be either quite or very positive in its effect on their

organisation’s customer engagement. Those working

in accommodation and food are the most enthusiastic,

with 50% stating they are very positive. Three quarters

(75%) of all respondents said the technology will meet

expectations when applied in customer engagement and

only 6% said they would use the technology, but not

for customer engagement.

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Since customer service departments are often

considered to be among the most technologically

savvy, it is perhaps no surprise that AI is seen as

having enormous potential. Analysts at Gartner

have forecasted that more than 85% of customer

interactions will be managed without a human

by 2020, while AI market research specialist

TechEmergence believes that chatbots will become

the primary consumer application of AI over the next

five years.

Whatever the application, some two-thirds of

respondents (66%) agreed that failure to adopt AI

would lead to a loss of competitiveness. This belief

was highest among those working in finance and

insurance, where 93% of respondents said failure to

develop or implement AI would be a competitive

disaster. A third of respondents (33%) working in

the professional, scientific and technical sectors said

failure to adopt AI would lead to a loss of competitive

advantage, compared with 43% in construction and

manufacturing, respectively.

WHAT SORT OF FUNCTIONALITY?

While respondents can clearly see the impact of AI on

customer-engagement, it’s important to understand

the type of functionality they expect to deploy.

Respondents were asked to select which of the

following they would use:

Real time customer service centre analysis and intervention

Voice activation for customers

Predictive capabilities in customer engagement

Provision of personalised summaries of online reviews

Chatbots for customers

Real time customer service analysis and intervention were the most popular, selected by 61% of respondents. All decision makers working in the wholesale and retail sector (100%) said they will deploy AI in this way.

Voice activation was selected by 57% of respondents, reflecting the increasing expectations around AI’s Natural Language Processing (NLP) abilities. Where respondents said their organisations had already achieved full implementation of an AI application, it was for voice activation in 91% of cases.

61%

57%

66% agree that failure to adopt AI would lead to a loss of competitiveness

66%

96% of respondents believe AI will be positive in its effect on their organisation’s customer engagement

96%

53% of people said their organisation will improve customer engagement by deploying AI’s predictive capabilities.

46% of all respondents said their organisation plans to use AI to provide personalised summaries of online reviews. Indeed, 100% of businesses in the accommodation and food sector are planning to use AI to provide personalised summaries of online reviews, compared with 50% in wholesale, retail and the professional, scientific and technical sectors.

Finance and insurance is where the greatest percentage of respondents

(75%) said their businesses will use AI for customer chatbots. Surprisingly, the enthusiasm shown towards the use of AI for smart review summaries was even stronger than that for chatbots (selected by 42%) despite the latter’s comparative ubiquity.

This is evidence of a growing understanding that solutions such as Feefo’s Smart Themes can transform the way consumers use online reviews, providing bespoke summaries in real time that give the customer confidence to make a purchase, while nurturing engagement with them for the future.

Where respondents said their organisations had already achieved full implementation of an AI application, it was for voice activation in

91% of cases

100% of businesses in the hospitality and retail sector are planning to use AI to provide personalised summaries of online reviews

61% of businesses with more than 1,000 employees will use AI for review summaries, compared with an average of 44% among those with fewer

75% of respondents in the finance and insurance sectors will use AI for customer chatbots

53%

46%

75%

WHILE BUSINESSES BELIEVE AI WILL WORK

IN CUSTOMER ENGAGEMENT, WHAT SORT OF

IMPROVEMENTS DO THEY EXPECT TO SEE?

The research shows that respondents primarily see AI as a technology that will allow businesses to be more responsive – a capability selected by 59% of respondents. Just more than half (51%) can see it predicting customer needs (tying in with predictions from analysts Forrester that companies will use AI technologies to anticipate requirements by context, preference and prior inquiries). But 45% said the biggest area in which it will make a difference with customers is through improved personalisation, where the technology’s capacity for crunching data to bring an organisation closer to each of its thousands of customers is unrivalled.

59% of people primarily see AI as a technology that will allow businesses to be more responsive

75% of IT decision makers working in education or accommodation and food services said using AI to improve personalisation will be their organisation’s main method of deploying the technology to boost customer engagement

80% in admin and support services said AI will improve customer engagement by making their business more responsive

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59%

75%

80%

FEEFO’S SMART THEMES

CAN TRANSFORM THE

WAY CONSUMERS USE

ONLINE REVIEWS

3. MAKING A SUCCESS OF AI IN CUSTOMER ENGAGEMENT

Investment in AI is one thing, but having the human

and intellectual resources to ensure its effective

implementation is another. AI can call on many

different disciplines and levels of skill, not all of

which can be available to each business.

Natural Language Processing, for example, promises

widespread benefits in customer interaction,

especially in making reviews quicker to understand

and more relevant. Yet being underpinned by several

AI technologies and syntactical text analysis, it is a

solution that requires expertise in its implementation.

The skills gap in AI is certainly emerging as a real business challenge. A survey by the Confederation of British Industry in association with IBM found that only a third of companies feel their business has the skills to maximise the benefits of AI transformation.

It was not a surprise then, that only 19% of respondents in this research said their company has sufficient capacity and resources to develop AI technologies.

Approaches to overcoming this skills deficit vary. While more than a third (36%) said they will hire additional staff with AI expertise, nearly a quarter (24%) plan to acquire off-the-shelf solutions like Feefo reviews, which can be integrated into existing systems. A fifth of respondents (20%) said their organisation will bring in the necessary talent and resources from outside.

Buying expertise is something even the tech giants do when it comes to AI. Apple, for instance, acquired Emotient in 2016, while Salesforce has bought MetaMind. Spotify, too has acquired MightyTV, an AI start-up that brings a new level of sophistication to customer recommendations.

When decision makers were asked about expenditure on AI over the next three years, the largest group (20%) said they expect their organisation to spend between £250k and £499,999.

£10m +

The next largest group was the 17% predicting expenditure of between £500,000 and £999,999, while just 2% said their organisation would invest more than £10 million. Some 14% admitted they were still in the dark and did not know how much their business would spend.

19% of respondents said their company has sufficient capacity and resources to develop AI technologies

Over one third of organisations will hire additional staff with AI expertise before implementation

23% of businesses with up to 1,000 employees will commit between £2 million and £4.9 million to AI, along with 22% of those with a thousand or more staff

50% in the hospitality and retail sector will spend up to £1 million on AI over the next three years

Unsurprisingly perhaps, the decision makers also gave a range of figures when they were asked how much their organisations had already invested in AI. Just more than a fifth (21%) said their business had invested between £250,000 and £499,999 and almost the same proportion (20%) said it was between £100,000 and £249,000.

10% (one in ten) have already invested between £1 million and £1.9 million, and 9% have spent up to £4.9 million

Only 2% have already

committed

amounts up to

£10 million

5% of

organisations

are yet to spend

anything on AI

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£250k - £499,999

£500k - £999,999

19%

1/3

23%

50%

4. WHO IS DRIVING AI DEVELOPMENT IN ORGANISATIONS AND HOW WILL SUCCESS BE MEASURED?

Addressing the challenges of AI, an article in

Harvard Business Review raised the prospect

of organisations appointing a Chief Artificial

Intelligence Officer (CAIO) in a bid to add more

technological impetus to the board. It was not

a development that the author welcomed and

other commentators agreed, pointing out how

organisations should primarily approach AI as

solving business problems.

WHO THEN IS DRIVING A PROJECT AS SIGNIFICANT AS AI DEVELOPMENT?

This research found that for the largest percentage of organisations it is the Chief Technical Officer who is in charge (47%) while for more than a quarter (26%) the Chief Digital Officer is driving the project. It is only in 36% of cases that the Chief Executive is at the wheel, reflecting how AI is still viewed as a development for IT to manage.

Given the broad range of answers, there is clearly substantial overlap in responsibilities. In more than a fifth of organisations (22%) it is the data scientist who was reported to be in charge of AI and in 15% it was the Chief Marketing Officer.

Despite who is responsible for driving the project, having confidence that the board and senior management understand AI is certainly going to be important to overall success.

When respondents were asked if their board and senior managers understand AI sufficiently, a remarkable 82% said they are confident that they do. Confidence is highest among those working at organisations with between 250 and 999 employees (93%) and lowest at those with more than 1,000 staff (67%).

In terms of industry sectors, all of those working in the professional, scientific and technical arena (100%) have confidence in their board’s understanding of AI, whereas those working in construction have the lowest levels of confidence (71%).

Regardless of who is at the helm of the project, how can organisations measure AI’s success in customer service? Should it be a question of optimising time-to-resolution cycles and Net Promoter Scores (NPS)?

Among our respondents there was some diversity of opinion. This ranged from valuing higher customer retention as most important (selected by 31%) to higher rates of customer satisfaction (selected by 30%). A fifth (20%) said it is all about winning new customers, but only 18% said AI should be judged on its ability to help with upselling and cross-selling to current customers.

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82% of people are confident that their board and senior managers understand AI sufficiently

CTO47% of respondents stated that the Chief Technical Officer is in charge of AI

50% of those in wholesale and retail want to measure the success of AI through increased customer retention, whereas a third (33%) in the same industry said it should be through winning new customers

5. CONCLUSIONThe Feefo research clearly reveals that organisations in all sectors of UK business are steadily embracing AI, primarily as a tool to transform customer engagement. Given the global nature of competition, they have recognised this is an urgent necessity.

It is certainly encouraging that so many respondents recognise the role of AI in transforming the customer journey. Nearly half, for example, said their organisations will deploy an AI solution to provide bespoke summaries of online reviews to their customers. Many also recognise that their lack of AI expertise is no barrier to adoption, because highly effective, off-the-shelf solutions such as Feefo’s Smart Themes and Performance Profiling can now be integrated into their existing systems.

At Feefo, we have long understood how real reviews influence consumers powerfully, converting them from browsers into customers. The ratings and opinions of fellow customers become highly persuasive once they are known to be 100% genuine.

Now Feefo is taking this further by employing AI to help consumers cut through the noise and get to the opinions that matter to them most. As more of us shop online and the range and number of opinions on individual products grows exponentially, it becomes ever more time consuming to arrive at a confident buying decision.

By employing sentiment analysis and offering user-friendly filters, AI solutions such as Feefo’s Smart Themes help consumers make the right decision quickly, without having to trawl the web for opinions on multiple sites.

For businesses that want to stand out from the competition, there are huge advantages. The more that consumers engage with an AI-powered review system, the greater the insight gained by the business into the complexities of its customers’ requirements. And the results soon speak for themselves in greater revenues as more consumers press the “buy now” button.

A business of any size must now seriously consider how it is going to address AI in customer engagement and ensure it has access to the right skills and solutions. Companies need to enlist the support of organisations that have the experience, focus, capability and resources to address the challenges, especially in the most urgent area of activity for AI – customer engagement.

Matt West Chief Marketing Officer

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THE MORE THAT CONSUMERS

ENGAGE WITH AN AI-POWERED

REVIEW SYSTEM, THE GREATER

THE INSIGHT GAINED BY THE

BUSINESS

THE SURVEY

100 SENIOR DECISION MAKERS WORKING IN IT

From the industries including:

SIZE (employees)

AGE OF RESPONDENTS

RESPONSIBILITIES COVERING:

7% aged 18-2410% aged 55-64

17% aged 45-54

21% aged 35-44

45% aged 25-34

Information and communication

Manufacturing

Education

Construction

Finance and insurance

25%

14%

8%

7%

14%

15%

28%

30%

18%

25 - 49

250 - 999

1,000 +

50 - 249

39% HR

40% Operations

35% Sales and Marketing

35% Finance

66% IT

21% Legal

28% Admin

22% Facilities

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team will be happy to help you.

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