Artificial Intelligence

How Artificial Intelligence Will Impact Customer Service


Artificial Intelligence (AI) and automation are rapidly transforming the service industry. Automation can completely replace monotonous jobs. However, automation is also changing how customer service works, even as human interaction remains a big factor in this sphere. In recent times, AI has developed chatbots and virtual assistants that behave just like humans. For customers, it is all about experience, and if a customer cannot differentiate between a bot and human, most of the work is done.

So, what has made AI so impactful in customer service spectrum? In short, it is the understanding of content and context of the customer needs.

At, we are also using cutting-edge AI to interact with our customers. Our customer service comprises of both humans and bots as we are trying to find the right balance for providing the best customer experience(CX) possible. We will also be enabling learners to excel at AI by providing excellent premium projects related to the topic.

So, how does AI impact customer service? Let’s explore.

How Artificial Intelligence Will Impact Customer Service

Bill Price, author of the book, “The Best Service is No Service” describes the Value-Irritant matrix which consists of the 2×2 grid. The grid classifies how the AI and human interaction work together.

Artificial Intelligence Will Impact Customer Service

Credit: Bill Price

As you can observe, only two of the four actions value human interaction. The other two can be automated.

This opens up a new way for how AI can replace customer service, and it is already used by many companies around the world. Companies use a combination of technologies to make it happen. It can be big data, analytics, robotics, AI and machine learning. Let’s check out the different ways AI impacts customer service.

1. ChatBot and Virtual Agent Revolution

Everyone has heard about the chatbot revolution. Siri and Cortana are prime examples of how far chatbots have come. Many companies are also ahead of the curve and already using chatbots to interact with customers. Lyft, Starbucks, Spotify, and others have already implemented amazing chatbots to automate customer interaction.

A virtual agent compliments a chatbot. It provides a pleasant personality that interacts and learns about the customer, only to adapt and provide better service the next time it interacts with a customer. Amelia from IPsoft is one of the best virtual agents around right now. She is intelligent and smart, and quickly learns from the interactions.

Combining both chatbots and virtual agents provides an excellent window for companies to perfect customer interaction. It facilitates not only the simple questions but also complex ones. All of this is possible thanks to the data available in the knowledge base(KB) of the company. The most astonishing part is the reaction time of AI in answering the questions. They are quick and respond just like a human would.

2. Customer Service Interaction

As we discuss this point, we will also try to answer the question, “Will AI replace customer service completely?” Customer service interaction is heavily influenced by both AI and human interaction. Tiago Paiva, the CEO of Talldesk, simplifies the customer interaction tasks into two action types: emotion and urgency.


Credit: Tiago

It is clear from the above chart that some tasks require human interaction and some don’t. For example, if a customer is stuck due to a bug or not able to proceed to the payment method when he is trying to buy a premium project, he would want to get it solved using human interaction. As this is an urgent situation, human empathy is required.

Tasks such as sending an email when a premium project is going live or when a new premium project is released, have low urgency and doesn’t require human interaction. These tasks can easily be automated by AI, freeing resources and reducing errors (because humans are likely to make errors and are not perfect). This is the reason why we at LiveEdu keep a balance between automation and human interaction such that we can provide the best possible customer experience(CX).

3. Better at retaining  customers

Customers want the best possible experience. However, as companies grow, a lapse in service is unavoidable. Situations such as maintenance, upgrading service, and sudden downtime can prompt customers to feel uneasy and question their investment in the service. This will lead them to contact customer support to get it solved. AI can play a crucial role in retaining customers when this kind of situations happens.

To make it work, companies need to compare the data of the current customers and the lost customers. What series of events led the customer to leave the service? Answering this question with data can reveal a lot of action points about how customers behave. When understood completely, companies can find the right course of action and increase the chance of retaining customers, and automate it with AI capable of understanding specific actions. For example, a company can find that after a downtime arrives, customers who ask for a refund are more likely to leave the service in the next 5-7 days. The company can program the AI to find the patterns and try to explain to the customer the issues that the company is having, and how they are working hard to solve it.

4. Only contact when needed.

Learning human behavior is one of the strong points for the AI. No customer likes to be contacted when not needed. “Snowballs” is the term that is commonly used in the industry to mean repeat contacts. If a customer is snowballed, he is more likely to reject the offer. To prevent this kind of customer behavior, it is important to use Big Data Analytics and AI to improve and predict when and how to contact the customer. Things such as the time to contact and the medium through which the contact should be made is what an AI can do more efficiently than a human.


Customer service is best handled when AI is used with it. In short, AI acts as a catalyst in customer service and only improves it from many dimensions. At, we also understand the role of AI in customer service and employed it only where it is needed. Our premium projects are also aimed at helping curious learners and industry workers to discover how to use AI in their career. Head over to the premium project catalogue to find out which premium project fits you best.

About author

I, Dr. Michael J. Garbade is the co-founder of the Education Ecosystem (aka LiveEdu), ex-Amazon, GE, Rebate Networks, Y-combinator. Python, Django, and DevOps Engineer. Serial Entrepreneur. Experienced in raising venture funding. I speak English and German as mother tongues. I have a Masters in Business Administration and Physics, and a Ph.D. in Venture Capital Financing. Currently, I am the Project Lead on the community project -Nationalcoronalvirus Hotline I write subject matter expert technical and business articles in leading blogs like,, Cybrary, Businessinsider,, TechinAsia, Coindesk, and Cointelegraph. I am a frequent speaker and panelist at tech and blockchain conferences around the globe. I serve as a start-up mentor at Axel Springer Accelerator, NY Edtech Accelerator, Seedstars, and Learnlaunch Accelerator. I love hackathons and often serve as a technical judge on hackathon panels.