Customer retention is critically important to the longevity of any business that relies on maintaining a subscription-based, SaaS, PaaS, etc., business model. Practical applications for artificial intelligence (AI) have developed to the point where AI can automate customer success and customer support processes. In August, G2 launched the Proactive Customer Retention category under its Customer Service category to accurately represent the growing market of AI applications in customer success and service support functions.

AI-driven customer service software products supplement SMEs

Practical applications of artificial intelligence like machine learning in customer service are well on their way toward becoming ubiquitous as it has in other industries. The traditional path to acquiring subject matter expertise in customer success or support was through years of experience and training to develop the wisdom to recognize and anticipate escalation trends. However, these teams still reveal weak points in their communication hierarchy. The issue being individual customer service professionals can identify problem trends in their own account portfolios. This impacts reaction time to problem trends across the entire team because communication is limited to daily team meetings or team chats. 

This can now be solved with proactive customer retention software. These products can provide rapid top-down trend analysis and disseminate its findings to the entire department in minutes. This helps supplement current SMEs by covering their blindspots by facilitating intra-team communication and budding SMEs by developing their expertise with examples of trends to recognize and anticipate. The software acts as a wingman and guide post for customer support teams. Only AI-driven software products can fulfill this service responsibly.

On G2, another Customer Service category that requires its products to have an AI feature is the Feedback Analytics category. In this category, NLP is used to extract insights from text to find customer sentiment and feedback trends. PCR software takes technology like NLP and machine learning to the next level by discovering possible case escalations before customer feedback. A common purpose between both these products is that they provide a bird’s eye view of the customer experience via automation. This process typically requires substantial training and experience to develop by conventional means without automation.

The impact of using PCR software on your bottom line

Studies since the 1990s have shown that the cost of onboarding a new customer can be 5 to 25 times more expensive than the effort to retain a current customer. A study by Bain & Company shows that improving retention rates by 5% can increase profits by over 25%. The customer success manager (CSM) role was, in part, created to fulfill this opportunity to reduce churn rate as a cost-efficient strategy. Other studies also show that response time to customer complaints on Twitter could impact customer desire to pay almost $20 more for a plane ticket. 

Source: Harvard Business Review 

Using proactive customer retention software’s capabilities to improve response times by automating the analysis of customer complaints for problem trends, outreach recommendations, and active tracking of customer sentiment could indirectly support sales efforts to close better deals. This can help provide more value to the customer support team, which is usually seen as an expenditure with little contribution towards creating business value. 

Looking forward

The complete potential of finding practical applications of NLP and machine learning on customer feedback datasets is yet to be fully realized. Feedback analytics software utilizes NLP to discern customer sentiment, key phrases, and trends. Proactive customer retention software uses NLP and machine learning to promote outreach to reduce churn and escalation likelihood. The next step will be product development using this data for contact center agent quality assurance and for generating product feedback insights.

With the proliferation of the subscription-based business model, proactive customer retention software will be a very attractive option for reducing the overhead costs associated with a large customer support team. Automating preventative measures to reduce the number of customer escalations will also ease the strain on the team workload. Businesses will recognize the bargain of buying an ounce of prevention for a pound of cure.

Edited by Shanti Nair