How to Use AI in Customer Service

July 4, 2024 9 min read

Ken McMahon

Ken McMahon


Businesses are using AI for customer service now more than ever. What started as a futuristic concept is now the standard, helping to meet and exceed customer expectations with every interaction they have with your brand. 

Our guide to artificial intelligence in customer service details the various ways to use AI in customer support, the benefits of AI in customer service, and what to expect in the future. 

What Is AI Customer Service?

AI in customer service refers to using artificial intelligence (​​AI) to automate tasks, assist human agents, and provide automated customer support that improves over time.

Using artificial intelligence for your customer service can help businesses improve the efficiency and quality of their customer service. It can also help enhance the overall customer experience (CX).

Nextiva dashboard for customer experience

Customer Service AI Components

How does AI in customer service work? AI and customer service consist of various moving parts that come together to understand, respond to, and assist customers and human agents.

Here’s an overview of three key components and their impact on customer service and overall business operations:

  • Contextual understanding: AI uses sentiment analysis and natural language processing (NLP) to understand the context of conversations. Sentiment analysis helps AI detect how customers feel, while NLP enables AI to understand customer intent, creating faster, more accurate responses. 
  • Business relationship: Customer data integration allows AI to provide decision-makers and support teams valuable customer insights into their relationship with the business. This enables agents to prioritize high-value customers and deliver personalized experiences tailored to each customer’s needs and preferences.
  • Outcomes: Using AI for customer service can help meet business and customer expectations, reduce churn, and drive revenue. For example, AI-powered tools boost efficiency, allowing customer service teams to achieve goals such as first-contact resolution, and identify upsell and cross-sell opportunities. 

What Are the Benefits of AI in Customer Service?

Businesses are continuously finding new benefits of using AI for customer service. Here are a few advantages of customer service AI:

  • Reduces operational costs: AI streamlines workflows, automates repetitive tasks, and deflects calls, freeing up human agents to focus on more complex issues. This boosts operational efficiency and reduces costs. 
  • Increases customer satisfaction and retention: AI provides 24/7 support, seamless handoffs to human agents, and the ability to anticipate customer needs for proactive support. This builds relationships, loyalty, and customer retention.
  • Helps provide faster, more personalized support: With AI-powered chatbots and virtual assistants, you can quickly understand customer intent and sentiment to deliver fast, personalized responses and solutions on the customer’s preferred communication channels. 

12 Use Cases for AI in Customer Service

As the bar for customer expectations rises, delivering fast, efficient, and personalized service with every interaction is crucial. With AI in customer service, businesses can revolutionize how they deliver customer experiences.

Icons list keys ways to use AI in customer service.

Let’s explore how to use AI in customer service so you can level up your customer service game.

1. Intelligent ticketing and routing

Intelligent ticketing and routing uses NLP and speech analytics to understand customer intent and sentiment. The AI system can tag, categorize, prioritize, and route tickets to the right agent or department. It matches each ticket with the most suitable agent based on their expertise, workload, and past interactions, ensuring the issue gets addressed and resolved promptly. 

speech analytics

2. Handle repetitive tasks

AI helps customer service representatives by taking care of repetitive tasks so they can focus on issues that require specific expertise or a human touch. AI chatbots or intelligent virtual assistants (IVAs) can reply with human-like responses to customer questions and handle tasks like checking order statuses or resetting passwords.


3. Provide 24/7 support and self-service

AI makes sure customers get help whenever they need it, even outside regular business hours. Chatbots and IVAs are available for 24/7 customer support and offer customers self-service options. These resources — like help centers and online portals — help customers help themselves, keeping ticketing and call queues more manageable while reducing wait times.

4. Agent assistance

AI empowers customer service agents by providing real-time guidance, suggesting relevant knowledge articles, troubleshooting steps, and call scripts, accelerating response times, and improving accuracy. Workflow automation handles tasks like call logging, data entry, and ticket classification, while generative AI reduces wrap time by analyzing interactions and generating summaries, saving agents time and minimizing stress. 

5. Accelerate agent onboarding and training

AI accelerates onboarding and training for new customer service agents, ensuring they can handle customer inquiries from day one. It also provides real-time coaching during live interactions, suggesting relevant resources and best practices. AI seamlessly integrates with monitoring and feedback processes and quality assurance tools providing data-driven insights for continuous improvement.

6. Proactive customer support

AI-powered customer support looks ahead and tries to fix problems before they happen. Using predictive analytics, AI can anticipate potential problems and suggest proactive solutions. During interactions, AI analyzes real-time sentiment to prompt agents to offer proactive customer service. At the same time, automated reminders and notifications keep customers informed about service interruptions or personalized recommendations based on their history.

Related: Customer Intelligence: What It Is & How to Implement It

Support CRM and screen pop for proactive customer service

7. Intelligent product recommendations

AI can recommend products to the customer during chatbot interactions or surface recommendations for customer service agents. AI analyzes customer behavior and data, like browsing and purchase history, and context from real-time conversations, to make personalized recommendations tailored to individual preferences and needs. With AI’s assistance, agents can upsell or cross-sell products, enhancing customer satisfaction and driving sales while increasing customer lifetime value. 

8. Personalized interactions

AI enriches customer interactions by personalizing conversations, such as personalized greetings, referencing the customer’s name or past interactions, which can foster a sense of connection. AI seamlessly integrates customer data for proactive support, enabling agents to offer data-driven responses and predict potential issues, ensuring a smoother customer journey and overall satisfaction.

9. Gather customer insights and feedback

AI can take large amounts of data and customer feedback and turn it into actionable insights to improve customer service. AI provides a holistic understanding of customer sentiment and feedback by analyzing text from different channels, like call recordings, live chat transcripts, and social media comments. Through sentiment analysis, AI identifies emotional tones and finds trends and patterns in customer feedback, helping businesses address common pain points. 

10. Optimize knowledge bases and content

Businesses use AI to improve knowledge-based content and self-service options. AI can identify content gaps and outdated articles by analyzing conversations, keyword searches, and customer queries. AI-powered tools streamline content creation and curation, suggesting relevant articles and FAQs. AI can also tailor the knowledge base experience to the customer based on previous interactions and browsing history, proactively offering personalized articles.

11. Multi-language support

Through real-time language detection and translation, AI enables agents to communicate with customers in their native language instantly. Multilingual chatbots and IVAs can interact with customers in multiple languages and provide support tailored to each customer’s preferences. AI also considers cultural nuances and conducts sentiment analysis across languages, ensuring respectful and effective communication that builds trust and rapport with multilingual customers.

12. Deflect tickets with AI chatbots and virtual agents

AI chatbots and virtual agents provide omnichannel support, handling common inquiries and tasks, and freeing human agents for more complex issues. With 24/7 availability, the AI-powered tools answer FAQs and handle repetitive tasks, deflecting tickets and providing immediate assistance. Recognizing customer intent and routing calls to the right place ensures agents resolve requests quickly and efficiently.

Conversational AI automates routing intelligently

Examples of AI in Customer Service

The rise of artificial intelligence in customer service continues to empower businesses to deliver exceptional experiences.

A list of icons show examples of AI customer service tools.

These are a few key AI technologies currently enhancing customer service across industries:

The Future of Customer Service AI Starts with Nextiva

From self-service options to intelligent agent assist, AI has already transformed the face of customer service. It’s not simply a luxury item that sets businesses apart — it’s an industry standard that customers have come to expect throughout different touchpoints in their journeys.  

With Nextiva’s AI-powered contact center, you get all the bells and whistles to enhance the customer experience. AI-powered customer service includes tools that provide call summaries quickly and accurately document key details and action items from the interaction, AI-powered quality assurance tools that offer more coverage and reduce manual QA, and intelligent call routing gets customers to the right agent the first time.

The future is now. Try Nextiva today. 👇

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Customer Service AI FAQS

Still have questions? Our FAQ can fill in the blanks so you have all the info you need about how AI is being used in customer service.

What are the challenges of AI in customer service?

While AI excels at handling routine tasks and customer engagement through natural, human-like conversations, navigating complex and emotional situations is still better suited for human agents.

AI can identify customer sentiment and ensure a seamless handoff between AI and agents when needed. AI learns with each interaction, continuously improving the ability to understand natural language and human emotions.

Will humans be replaced by AI in customer service?

No, AI is not here to replace human agents. AI is a powerful tool used to enhance the skills of human agents, handle routine tasks, and provide real-time support. AI empowers agents to focus on complex issues and build stronger customer relationships, resulting in better customer service experiences, increased agent productivity and efficiency, and happier agents.

What industries use AI in customer service?

AI has been adopted across various industries, including retail and e-commerce, healthcare, call centers, and banking and finance.

Basically, any industry that provides customer support can implement AI to enhance experiences, increase operational efficiency, and reduce costs. As AI customer support tools continue to evolve, businesses will certainly discover even more use cases to improve customer service.

How do call centers use AI to help customers?

AI-based call centers leverage intelligent tools in several ways.

For example, AI-powered chatbots can answer basic questions and deflect calls, while advanced IVR systems can understand natural language and route customers to the most appropriate agent.  AI can also assist support agents during calls with real-time guidance, insights, and generative AI tools for faster, more efficient service.

Ken McMahon


Ken McMahon

Ken McMahon leads Customer Success for Nextiva. His 25 years of experience leading various aspects of the customer experience including professional services, customer success, customer care, national operations, and sales. Before Nextiva, he held senior leadership roles with TPx, Vonage, and CenturyLink. He lives in Phoenix with his wife and two children.

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