Transforming Customer Experience with AI: Takeaways from Forethought’s 2024 Benchmark Report

In today's fast-paced digital landscape, customer experience (CX) is paramount for business success. As leaders, understanding how to leverage artificial intelligence (AI) effectively can set your company apart. The Forethought 2024 AI in CX Benchmark Report included 512 participants and offers insights into AI adoption, effectiveness, and best practices. Here are the key takeaways every leader should know.

AI Adoption and Effectiveness

AI is no longer a futuristic concept; it's a present-day reality transforming customer experiences across industries. According to the Forethought report, 54% of businesses have integrated AI in some form, and the trend is on the rise. Notably, businesses that implement AI effectively experience a trifecta of success: nearly double the ticket deflection rate, significant cost reductions, and a 5% increase in customer satisfaction scores.

Optimal AI Strategies

To harness the full potential of AI in CX, it’s crucial to adopt the right strategies. The report highlights several critical insights:

• Dedicated AI Solutions Outperform Add-ons: Companies using dedicated AI platforms or suites for CX consistently outperform those relying on help desk add-ons. This included better ticket deflection, higher CSAT, and stronger NPS.
• Data is King: AI models trained on company-specific data deliver superior performance compared to those using generic public data. Companies achieved the highest deflection rate when companies trained their AI model on their organization's historic data. Here are the most common choices to train the model, note that models can also be trained on a mix of these options:

Avoiding Common Pitfalls

While the benefits of AI are clear, the path to successful implementation is fraught with potential pitfalls. The report warns against sub-optimal approaches:

• In-house Development Risks: Relatively few companies opt for in-house development and doing this internally often leads to lower net promoter scores (NPS), reduced ticket deflection, and higher operational costs.

• Limited Data Utilization: AI systems trained solely on help center or public data significantly underperform compared to those leveraging deep, company-specific data. Companies leveraging historic training data for AI saw a significant year-to-year increase in deflection rates, with 56% reporting improvement compared to only 30% who didn't use such data.

Key Metrics for Success

The Forethought report emphasizes three critical metrics for evaluating AI’s impact on CX.

1. Deflection Rate: The highest deflection rates are achieved by companies using dedicated AI point solutions, with year-over-year improvements most pronounced in those using dedicated AI platforms.

2. Customer Satisfaction (CSAT): While all AI solutions for CX led to a net improvement in CSAT year-over-year, dedicated point solutions had the strongest impact, with 50% of companies reporting gains compared to only 8% experiencing a decline.

3. Cost per Resolution: Surprisingly, AI solution type had a smaller impact on cost per resolution and training data played a larger role. Companies using dedicated point solutions with their own historic data achieved the lowest cost ($5), while in-house built AI with historic data led to the highest cost ($14).

Adoption Trends and Sentiment

Adoption rates vary significantly across industries, with hospitality and media leading the way, while insurance lags behind. Despite these variations, the sentiment towards AI is overwhelmingly positive, especially among companies using dedicated AI platforms. These organizations report higher satisfaction and loyalty, reflecting the tangible benefits of well-implemented AI solutions.

Implementation Goals and Challenges

Companies have diverse goals when adopting AI for CX, but common themes include improving CX and automating deflection. These priorities vary by job level, team size, industry, and revenue band. However, one consistent challenge across all segments is integration. Even across varying complexity, ensuring seamless integration of AI systems remains a critical hurdle to overcome.

Conclusion

The Forethought 2024 AI in CX Benchmark Report provides interesting data points for executives looking to leverage AI to enhance customer experience. By adopting dedicated AI solutions, partnering with specialized vendors, and utilizing company-specific data, companies can achieve remarkable improvements in ticket deflection, customer satisfaction, and cost efficiency.

As AI continues to evolve, the companies that embrace these insights and act swiftly will be best positioned to lead in the competitive landscape.?

---

About Me:

With over 15 years of experience in the SaaS industry, I help companies leverage technology like personalized onboarding experiences and data-driven customer success programs to create exceptional customer experiences. At Insight Partners, I advise portfolio companies on post-sales strategies that deliver predictable outcomes, boost revenue, and improve efficiency.

Let's Connect:

Follow me on LinkedIn for more insights on customer experience and growth strategies.