Is AI a magic bullet for creating an effective CX strategy, or just a quick way to alienate your customers? Well, it depends on how old they are.
ChatGPT is just another in a list of AI tools the internet says will revolutionize your CX strategy. From customer data analytics to automated CMS platforms to text and voice chatbots, it can feel like AI is necessary to deliver a modern, seamless experience. Many companies respond to all this information by jumping on the AI bandwagon without fully understanding how these tools fit into their overall CX strategy.
It’s easy to see how bringing AI tools into your CX implementation would make the lives of your team easier. You can eliminate guess-and-check tactics by leveraging data analytics tools to understand customer behavior. You can automate early-stage customer interactions, freeing up time to invest in touchpoints that matter. There’s a lot that AI can do for you as an organization.
But what about your customer? When making changes to your CX strategy, their needs should be your first consideration. Will the changes actually make their lives easier? Make their experience more enjoyable? Before you look to AI as a quick-fix for your lackluster CX strategy, you have to understand your customers’ tolerance for AI and other automation tools. That tolerance largely depends on the generation your customers belong to.
Here are two of the most popular applications for AI in customer experience, how different generations feel about them, and what they can do for your CX strategy.
AI Chatbots for Customer Interface
Chatbots come in all shapes, sizes, and degrees of annoyance. For some customers, they are a quick and easy way to get the information they’re looking for. For others, they’re a nuisance standing between them and talking to a helpful human being. And while there is variability in how generations respond to AI chatbots, even the youngest consumers are perhaps more wary of them than you might expect.
First, the positive. When choosing between speaking to a chatbot or waiting for a response, 62% of consumers chose the bot. And at least for Millennials and Gen Z, this willingness to speak to a chatbot extends to even interactions they didn’t choose. Only 28% of Millennials and 24% of Gen Z-ers found uninitiated chatbots annoying.
Now, the negative. Only 20% of Gen Z consumers prefer to start their customer service interactions with a chatbot. This is much higher than Baby Boomers (only 4%), of course, 71% of whom would prefer to start on the phone with a live agent. But it still means that 80% would prefer to speak to a live customer service representative. In addition, only 44% of Gen Z respondents believe that chatbots will ever fully replace human customer support.
So, are we embracing chatbots the way reporting would make it seem? Sort of. According to research, chatbot usage doubled from 2020 to 2022, with up to 18% of survey respondents having used a chatbot in the past three months. But this is still a relatively low number. Not to mention that 49% of consumers, when asked about their willingness to use a chatbot, responded “neutral.”
The biggest lesson from this? While chatbots are growing in popularity, they are nowhere near replacing human connection. Older consumers overwhelmingly prefer speaking to a live person to ask questions or resolve issues. But even younger consumers see the value of human interaction in the customer journey. This shows that a smooth handoff between chatbot and human CX representative is more important than ever.
Customer Data Analytics for personalization
CX personalization through data analytics is traditionally viewed as one of the “creepiest” applications of AI in CX. For instance, 60% of Gen X say they are “creeped out” by advertising that follows them across devices. As such, you have to be careful to keep your personalization efforts transparent and focused on the needs of the customer. While all generations report being between 48% and 65% comfortable with companies retaining their data for personalization efforts, this is only if the company discloses what data is being held and how it will be used.
First, the positive: Unsurprisingly, Gen Z is the most comfortable with their data being used for the personalization of their customer experience. Nearly half of respondents say they would be willing to share personal information if it would enhance their customer experience. Not only are they willing, they actually prefer it. 77% of Gen Z consumers believe it’s important for businesses to customize interactions. 62% say they are even willing to pay extra for personalization. While this is so far only a trend in the youngest generation, it may represent a shift in sentiment. Future generations may become even more open to personalization.
Now, the negative: Just 19% of Gen X and 14% of Baby Boomers say a personalized customer experience would make them much more likely to purchase from a company. Even worse, only 11% of Boomers say they would be more likely to choose a brand that provides personalization. However, this doesn’t necessarily mean that older generations see personalization as a bad thing. Rather, it doesn’t significantly factor into their consumer decision-making.
What’s the takeaway? While some older consumers may be a bit creeped out by personalization efforts, as long as you are up front about what data you are retaining and how you are going to use it, many customers actually find that personalization ads to the overall customer experience. What’s more, the younger your customers are, the more likely they are to be comfortable with personalization—and even prefer it.
How do I know if AI is right for my customers?
If these data show anything, it’s that you can’t assume what your customers want. Some things may feel intuitive (like Gen Z being the most willing to give up their data), but others are surprising (nearly a third of Boomers are fine with chatbots!). When questioning whether or not to implement new AI tools into your CX strategy, the first and most important step is to talk to your consumers—and not about AI.
Beginning the consumer research process with solutions already in mind will bias the results. Instead, take the time to talk to your consumers about their ideal customer experience, about the roadblocks they’re facing and the problems they experience. Then, you can develop touchpoints to solve these problems. Remember: AI is not a CX solution. It’s just a tool that can help you deliver solutions to your customer’s problems. So, when developing these touchpoints, consider AI tools among all the other tools at your disposal. If it’s the tool best able to solve your customers’ problems, then it’s the right tool for your CX strategy.