How AI is upending marketers’ customer service strategies

Even the Geek Squad is not safe from AI. Best Buy’s customer service crew, which has been around since 1994, has been pared back as part of cuts the retailer is making as it invests more in generative AI for customer service. The tactical shift is part of a larger trend occurring across retail as companies restructure customer service teams to better account for the changing preferences of consumers, who are increasingly comfortable interacting with bots while voicing complaints on social media. The moves have led to massive staff reductions—including at L.L. Bean, which recently reduced its call center hours—as brands retrain personnel to seamlessly shift between the varied platforms consumers are using, from Instagram to email. “It used to be all-humans-all-the-time was the way to say this company cares about you and develop that connection and that relationship—now it’s the other way around,” said Julianne Hudson, managing director, strategy and insights, at VML, noting that to some customers, saving time is more important than a human interaction. Now companies want to “give you all the tools, all the channels in all the places, and you choose—like choose your own adventure customer service.” The changes reflect the pressures brands are under to try to reconcile economic challenges while still offering quality service to maintain continued loyalty from customers. All the while, brands must work harder to protect their images—if a customer complains about a negative experience on social media, all the world can see. That means marketers must ensure social media teams are trained in customer service, experts say. “As social media continues to play an increasingly integral role in customer care, we expect the lines between social teams and customer service teams to continue to blur,” said Scott Morris, chief marketing officer at Sprout Social, a social media analytics company. “We are already noticing job positions that blend customer service and social responsibilities into one unified role,” he added. In many cases, AI has become the first line of all customer service interactions, experts say. But beyond that, marketers differ on how they are using technology and employees to foster the best outcomes. Some brands, such as Delta Air Lines, encourage customers to use their app for service requests. Lulus, a special occasion-focused womenswear brand that has a chat assistant and is testing more AI, offers customers the ability to shift channels from text to phone to chat. Many brands are training employees to be versatile on different platforms to meet new social media preferences from customers. Around 85% of customers are on a screen or near a screen when they call customer service, according to Kate Leggett, VP and principal analyst at Forrester. Check out the latest Ad Age events and award programs “If they have an issue, the first place they’re going to go is self-service—could be a chatbot conversation in AI, for a refund process, and as they go to the digital channels, every digital channel is front-ended by AI,” she said. Customers shop differently today Earlier this month, L.L. Bean announced it would be laying off a portion of its call center and reducing hours there as shoppers shifted from placing catalog orders by phone to buying online. The company said that more customers are shopping through stores and e-commerce; as part of the shift, L.L. Bean is reducing call center hours to 8 a.m. to 8 p.m. from 7 a.m. to 11 p.m. “In this dynamic retail environment, a strategic challenge for us has been how to best serve our customers’ evolving needs and preferences,” wrote a spokesman in an emailed statement. “Simply put, L.L.Bean customers shop differently today than in the past and we must adapt.” Similarly, Best Buy is reducing its service center workforce, cuts that include Geek Squad field agents as the retailer tries to reverse sales declines. During an earnings call with analysts in February, CEO Corie Barry discussed Best Buy’s investment in generative AI for customer service. “We are leveraging AI to summarize the main points and follow-ups from each of our customer service calls,” she said, noting that the tool reduces average engagement time by nearly 5%. AI attracting interest Kustomer, a 9-year-old company that provides AI-powered tools for brands including Abercrombie to use for customer support, this year rolled out a new offering called KIQ Customer Assist. That product helps clients improve interactions with customers by analyzing previous exchanges, offering translations to other languages and suggesting responses. Check out the latest Ad Age events and award programs “The net response is we allow the agents to do more of the problem solving, less around the monotony of typing correct responses, looking up grammar and translating,” said CEO Brad Birnbaum. He noted that Kustomer is seeing a “tremendous amount” of interest in KIQ, which has attracted “the most significant early interest” of any of the company’s product offerings to date. By the end of the year, Kustomer expects to roll out a tool that allows AI to provide actionable responses, such as shipping a new shirt size to customers, Birnbaum said. The need for more efficiency comes as brands try to meet customers in every channel where they request help. Younger customers are increasingly turning to social media channels, including Facebook, Instagram, X and even TikTok, for support. A recent report from Sprout Social found that 56% of Gen Z and 48% of millennials use social media as a channel for customer care from brands. In contrast, 39% of Gen X and 30% of boomers use social as a means of customer service; instead, both of the older cohorts rank email and phone as primary channels. In addition, Sprout found that 89% of Gen Z consumers say they’re using social for customer service more now than a year ago. More news: 20 brands catching Gen Z’s attention right now “Social media is trending as a go-to customer service channel,” according to Morris, who added that Sprout expects social’s prominence to increase. “While channel preference differs between generations, the demand for timely, personalized support continues to rise among all consumers,” he noted. With the rise of public-facing social media platforms, brands need to be more responsive than ever so they do not appear callous when faced with customer complaints. Such needs are helping to blend marketers’ social media staff with customer support. Boarded at 830pm it is now 2am.What are you plans to get us off this train. https://t.co/8uS1gQa6Fh— Tom Colicchio (@tomcolicchio) April 16, 2024 .@Verizon, my wife and I got new phones Sunday and your customer service rep forged our signature on a legally binding doc. He also signed us up for several add-ons that we didn't consent to. Your customer service didn't remedy the situation + tried to claim that it was not fraud— Josh Peterson (@joshtweeterson) April 24, 2024 VML’s Hudson said a big trend with marketers of late is to “upskill” or “reskill” their customer service groups. For example, employees are trained on digital customer service skills, often incorporating AI, leaving call center employees to unpack more complex calls that require a human interaction. Staffers are also trained on how to answer inquiries specifically on social media—what is appropriate for a response on what platform, for example. “They’re not necessarily getting rid of customer service centers—they’re just repurposing the employees, the hours and their skills,” Hudson said. The way marketers structure their teams depends on the industry, experts say. Retailers might use AI for most inquiries, whereas a wealth management company could have a human backed by AI analysis tools, suggested Forrester’s Leggett. She noted that overall, many customer service agents will be skilled at “context switching” between platforms such as chat, social media and voice. “What companies find is the bulk of inquires are easy questions, so you will need less agents but the agents you end up keeping are the ones that are more specialized, that have more advanced skillsets that can deal with the harder work,” she said. Empathy and efficiency At Delta, the carrier has been making investments in self-service options to route customers to the brand’s website and app and get a faster response. Delta monitors social media for customer service inquires, but sends those travelers to a messaging channel that is encrypted and secure, a spokesperson said. The moves are working—since pre-pandemic, app visits have grown more than 60% and nine times more customers are using digital channels for service, according to Delta. “While certain requests require the personal touch of a phone call, many of our customers (about 30% of our total volume and growing) enjoy the convenience of our messaging channel,” a Delta spokesperson wrote in an email. See all of Ad Age’s 2024 Creativity Award winners here Lulus has found success in balancing the omnichannel needs of its customers with its communication offerings, according to Tiffany Steinberg, head of customer experience for the 28-year-old brand. For example, if a customer calls in by phone, but has to get in a car, Lulus will switch formats to email so the customer can read responses later. The 50-person customer service team is also testing AI and exploring when a shopper wants to talk to a human and when AI will suffice. Lulus has a chat assistant for some self-service options, but also cross-trains all employees so if one channel is busier than another on a certain day, a staffer can adjust coverage. “Essentially customers utilize whatever channels we have, people can have flexibility to start on one channel and move to another,” said Steinberg. “We lean into what does this person need from us as an actual human being.” There are risks, particularly as brands explore more uses of AI for customer-facing exchanges, experts say. If a brand moves too far into AI, it can risk alienating customers, particularly those older consumers who prefer phone calls as a method of contact. Marketers should keep both the phone lines and digital lines open, said Hudson. “It’s a fairly complex calibration of all of the needs and getting that right depending on the target audience,” she added. “There’s this weird balance between empathy and efficiency.” Sign up for Ad Age newsletters From influencer marketing to agencies, get the latest news and analysis delivered to your inbox Click here

How AI is upending marketers’ customer service strategies

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