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The AI-enhanced customer experience


A sea change for CX strategy, design and development

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Artificial intelligence: A new era for customer experience

Artificial intelligence (AI) is unleashing a new approach for customer experience (CX) strategy, design and development. We haven’t seen change on this scale since the internet transformed print professionals into digital pioneers. But the timeline for evolution is far shorter than it was twenty years ago. Fifty percent of companies surveyed are already taking action to deploy AI, using it to quickly access insights and automate campaigns and processes. They can also embed it directly into new customer touchpoints. However, many companies have important capability gaps, and lack the strategy and skills needed to meet their AI aspirations. As a result, executives may be overestimating the ability of their organizations to make the shift.

Déjà vu all over again

Back in the 1990s, when the World Wide Web was the digital frontier, companies – fearful of lagging behind – scrambled to build online footprints. Those early websites were mostly brochures wrapped in HTML, but that was enough to show progress and start inventing entirely new ways of connecting with customers. With no precedents to follow, creative directors, designers, writers and developers learned by doing.

Today, AI is causing a similar seismic shift for CX teams. AI systems understand unstructured information in a way similar to humans. But they not only consume vast amounts of data with far greater speed, they learn from interactions. And because AI systems can see, talk and hear, CX teams are entering a new era: creating AI-powered experiences that feel like natural human engagement.

As more companies improve their CX by adopting AI, CX leaders and practitioners are coming to grips with AI’s potential to alter the very essence of their field – from their strategies to what they design and how. To better understand the impact and profound implications of this change, the IBM Institute for Business Value (IBV) surveyed 1,194 executives from seven industries worldwide who are responsible for, or strongly influence, CX for their companies (see “Study approach” section)

Executives report an enormous appetite for AI-enhanced CX (AI/CX), with 70 percent believing their industry is ready to adopt AI/CX, and three out of four predicting AI will play an important role in the future of their organizations. However, given the changes they face on many fronts, executives may be overestimating their company’s ability to quickly transition to a robust AI/CX program. Our findings indicate many companies lack a strong foundation of key capabilities, such as CX governance and clean customer data – gaps that could make the integration of AI more difficult. Executives may assume they can train or hire the skills they need, but that could be unrealistic, considering the growing demand for scarce talent and the anticipated rapid pace of development.

Drivers and benefits: Why executives are so enthusiastic

It’s no wonder surveyed executives are eager to adopt AI/CX. Two-thirds report AI will be a disruptive force in their industry within just two years. Only a tiny fraction – 4 percent – plan to use AI so they can be the disruptors themselves. The majority (57 percent) say responding to customer demands for more personalized experiences is their number-one reason for adopting AI. The need to maintain their customer-centric brand reputations comes in second at 51 percent. For most companies, adopting AI/CX is a defensive move – more about not being left behind than leading the way.

However, executives are not swallowing a bitter pill. Far from it. Executives cite numerous benefits they think AI will deliver, with most saying growth and operational benefits are equally important (see Figure 1). Furthermore, 68 percent claim confidence in their knowledge of how AI can drive the CX goals of their organizations.


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Meet the author

Carolyn Heller Baird, Global Research Leader for Customer Experience and Design, IBM Institute for Business Value