AI Customer Service 101: The Basics of Automation for Customer Service

Many businesses are looking for new ways to incorporate automation into their daily workflows. Though there are many ways to accomplish this, the most widely-discussed option today is artificial intelligence (AI).

AI holds a lot of potential for customer service teams and gives them the ability to work more efficiently than ever before.

Unfortunately, there are still many misconceptions surrounding this new technology and its uses. That’s why we created this resource. Keep reading to learn what artificial intelligence is (and isn’t), why it’s useful for customer service, and four ways brands are already using it to provide a better customer experience.

What is Artificial Intelligence?

Artificial intelligence refers to a computer’s ability to replicate human behavior. These systems “learn” by analyzing data from human interactions, then attempt to recreate similar interactions.

Today, AI is used for a variety of purposes. The most well-known are “virtual assistants” like Apple’s Siri, Amazon’s Alexa, and Google Assistant.

And while these three are all operated with voice commands, AI can also be used to power text-based conversations.

Why is Artificial Intelligence Useful for Customer Service?

Within customer service, AI’s biggest potential comes from Natural Language Processing (NLP). NLP gives computers the ability to “understand” the meaning and intent behind a human user’s input.

This way, there’s no need for phone tree-style multiple choice menus, or input that matches a list of pre-defined phrases. Instead, users can ask questions as they would to a human agent.

Then, they can receive helpful responses tailored to the exact question they’ve asked.

Are AI and Chatbots the Same Thing?

Chatbots often come up in discussions about artificial intelligence and customer service. As a result, some people draw the conclusion that they’re one and the same.

But, this isn’t necessarily the case.

Now, to be clear, artificial intelligence can be used to power chatbots, and can enable them to better understand user inquiries and resolve certain tasks.

But, not all chatbots are powered by AI. Some operate on simple, if/then-style programming, similar to the phone menus customers are faced with after calling a customer service line. These chatbots offer a very different experience from their AI-powered counterparts.

It’s also worth noting that chatbots aren’t the only potential use of artificial intelligence. This technology can be used to improve a variety of automated processes that have nothing to do with customer interaction.

Are AI and Automation the Same Thing?

Another term you’ll often hear used in the same breath as artificial intelligence is automation. But again, the two terms aren’t interchangeable.

Much like with chatbots, automated customer service can be improved with the use of artificial intelligence. But not all automation is powered by AI.

So while the two are closely related, it’s entirely possible to have either of them without the other.

4 Ways Artificial Intelligence can be used to Improve Customer Service

Although artificial intelligence is still in the early stages of adoption, many businesses have already found ways to incorporate it into their daily workflows. We’ve put together a list four ways AI can be used to improve customer service.

1. Self-service Resources

Many of today’s consumers prefer using self-help resources over speaking with support agents. This means, it’s more important than ever to determine what your customers need help with and then provide answers in the form of articles, videos, and tutorials.

While many companies have already invested in comprehensive libraries of tutorials and guides, their customers often struggle to find the information they need — ultimately rendering those libraries useless.

That’s where AI-powered tools like Freddy, the Freshworks omnichannel bot, become useful.

Bots like Freddy can use artificial intelligence to understand the intent behind customer questions. Then, based on that understanding, they can pull from a company’s resource library to find the information the customer is looking for.

Once they’ve found the right resource, they can use it to answer the customer’s question and direct them to the appropriate resource for additional help.

Plus, thanks to advances in semantic understanding, bots like Freddy can also direct users to other related resources and information.

As these bots gain experience interacting with customers, they can “learn” from their conversations. They can also learn from transcripts of customer interactions held by human sales, support, and marketing employees.

This way, they can develop their ability to deliver appropriate answers, and improve the customer experience they provide over time.

2. Ticket Routing

Within most customer support platforms, each new inquiry is classified as a “ticket” and automatically assigned to an agent.

Many platforms base their assignments solely on which agents have the fewest tickets assigned — but this isn’t necessarily the best way to determine who should be responsible for resolving an issue.

Every agent on your team has their own set of experiences, and some may even specialize in certain areas. Automation can help you make sure that every ticket is assigned to the person who’s best equipped to resolve it.

Expedia, for example, uses automation to route over half a million support tickets to its agents every month, with an accuracy rate of over 90%1.

This not only helps the company ensure that its customers are getting the best support possible but also enables their team to save the countless hours it would take to handle this process manually.

3. Recommended Responses

Although every customer is different, many of the questions they ask are largely the same — as are the answers that they require.

And while this repetitiveness doesn’t make answering customer questions any less important, it does mean that typing those same answers over and over can get tedious.

That’s where AI-powered recommended responses come in handy. When you incorporate AI into your support software, you can give your agents the option to speed up customer interactions by using computer-generated responses.

Each response is based on AI-powered natural language processing, and the assigned agent can ensure it’s relevant to the user’s question before delivering it.

And when the recommended responses are correct, they can drastically speed up the customer service process.

Thumbtack, for example, handles over one million inquiries per year with a relatively small number of agents — and they found that productivity improves by over 30%2 when they use recommended responses.

4. Automated Responses

Automated responses essentially take things a step beyond recommended responses by eliminating the need for approval from a human support agent.

Instead of being incorporated into the agent’s customer interactions, automated responses can be used to deliver answers on their own.

That being said, this type of automation is only ideal for relatively simple tasks.

Let’s say, for example, that a customer reaches out because they want to track an order. In this case, all they need is a tracking link — which an AI-powered bot can easily provide.

So, if a large portion of the inquiries your customer service team handles are relatively simple, automated responses could be an excellent addition to your strategy. In fact, one case study showed that an AI-powered chatbot for e-Residency was able to handle 45% of customer inquiries3 sent via live chat on its own.


Artificial intelligence holds a ton of potential for customer service teams. The challenging part, then, is figuring out the best way to incorporate it.

Fortunately, several businesses have already led the way in identifying ways in which customer support can be improved with AI.

First, it can be used to help customers find the information they need more easily, so that they can resolve issues on their own.

Then, it can enable support teams to handle inquiries more efficiently with ticket routing and recommended responses.

In some cases, artificial intelligence can even be used to provide automated responses that replicate those a customer would expect from a human support agent.

These are just the beginning. As artificial intelligence continues to develop, businesses will find more ways to incorporate it into their customer service workflows — and to provide more efficient service than ever before.

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