Four Challenges to Overcome for AI-Driven Customer Experience

To launch a successful virtual agent project for your organization’s customer service capability, the company must overcome four hurdles.

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Are you ready to turn your company’s customer service over to AI-powered virtual agents? Whether your goals include creating a fully digital business, improving customer experience, or cutting costs, virtual agents and automation offer many benefits. But, as with any technology, making the switch isn’t trivial.

Consider the experience of Mark Baylis, vice president of customer service and digital customer engagement at Optus, Australia’s second-largest telecom operator. He believed in the potential advantages of using virtual agents for customer service, but he needed to convince the company’s leadership team that the investment would make sense.

Baylis planned to have virtual chat agents handle half the incoming queries, which would cut costs by 50%. But the cost savings alone weren’t enough to overcome corporate resistance. Baylis recognized that this shift was not just about the customer service division but about the company’s larger digital transformation. By positioning the switch as part of the larger transformation effort, the investment in virtual agents became more persuasive to management. It also helped that virtual agents could handle more customer requests at peak hours and improve the quality and consistency of Optus’ customer experience.

By focusing on strategy, not just cost savings, Baylis was able to win over Optus’ CEO and C-level decision makers at a meeting in 2017. One person at that meeting described it this way: “The general reaction was excitement. It was in line with trends in the market.” Leaders at the meeting recognized the need to adopt the new technology and master it to prepare for the future.

In many ways, what happened at Optus is typical for companies that are considering AI-enabled technologies for their customer-experience strategy. Proponents must overcome four types of hurdles: economic, technical, political, and cultural.

The economic hurdle: demonstrating improvements to the bottom line. If your company currently has more than 1,000 phone or text chat agents answering customer questions, then it’s a candidate to benefit economically from a virtual agent system. Because they scale without the need to hire more people, virtual agents can pay for themselves — provided there are enough customer service intents that are easy to automate.

For example, at Dish Network, where customers initiate 6 million chats per year for sales and support, virtual agent automation generated millions of dollars in annual savings.

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An MIT SMR initiative exploring how technology is reshaping the practice of management.
More in this series

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