The Problem
You've just arrived home and are ready to relax after a long day. You turn on your TV and open your streaming service to watch your favorite show. But try as you might, the service doesn't seem to understand what you want. It recommends movies you've already seen, or worse, movies that are not even close to your interests. It's a frustrating experience, but not an uncommon one.
Companies that offer services like movie streaming, music streaming, and e-commerce are constantly battling to improve their customer experience. They know that a satisfied customer will come back for more, but a frustrated customer will quickly leave and find another provider that offers what they need. This is where AI and ML come into play.
The Solution
Companies are using AI and ML to analyze customer data on a large scale. They collect information on the customer's browsing habits, purchase history, and preferences to create personalized recommendations. The more data they collect, the more accurate their prediction algorithms become.
Take Amazon, for example. They use AI to predict what products a customer might want to buy and use this information to tailor their homepage to each individual. Netflix uses AI to personalize the user interface and recommend movies and TV shows based on a user's viewing history. Spotify's personalized playlists are also powered by AI, taking into account the user's listening history, preferences, and even the time of day to create a playlist that suits their mood.
But personalization is just the beginning. Companies are also using AI and ML to improve their customer service. Chatbots that use natural language processing to understand customer inquiries and respond appropriately have become increasingly popular. They provide 24/7 support, are always polite, and never get frustrated.
The Results
The results are impressive. Amazon reported that their recommendation engine is responsible for 35% of their total revenue. Netflix found that 75% of what people watch are from algorithm-based recommendations. Spotify reported that its AI-powered personalized playlists have led to longer listening times and higher user retention rates.
A report by Constellation Research found that companies that invest in AI and ML-driven customer experiences increase customer satisfaction by 7.1% and reduce customer churn rates by 3.5%. The report also predicts that AI-powered customer experiences will lead to increased revenues, as customers are more likely to make purchases from providers that offer personalized experiences.
It's safe to say that AI and ML are changing the game when it comes to customer experience. Customers are no longer satisfied with a one-size-fits-all approach, and companies that fail to adopt these technologies risk losing customers to more tech-savvy competitors.
Akash Mittal Tech Article
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