How to Achieve Personalized Customer Service with AI Tools

Learn how virtual assistants and chat bots create personalized customer service

Which experience makes you feel more valued as a customer?

Hello. Thanks for calling our Hotel.  How may I help you?


Good morning, Laura. I see you are a Loyalty member since 2007, and have stayed at our property in London every year around this time. Are you calling to make another reservation? If so, I see you have 345 Loyalty points available to use towards your stay.


Personalization as a driver in customer service


Delivering personalized customer service is more than just addressing a customer by name in an automated email, or segmenting by interest; it is a way to capture the customer’s attention and create a level of engagement that is authentic and relevant at every stage of the customer journey.  According to Accenture, 41% of U.S. consumers abandoned a brand due to lack of personalization and trust.

For organizations to succeed in creating a truly personalized CX, innovative approaches must be implemented that resonate deeply with customers so that they feel valued and appreciated. These strategies are increasingly being explored with Gartner stating that by 2018, over 50% of companies will have redirected investments towards customer experience innovations.


AI and Personalization – The Paradox of Personalization via a Machine

With unprecedented advances in algorithms and other machine learning tools, AI-enhanced solutions, such as virtual assistants or chatbots, can learn how to respond, engage or process many standard tasks — including customer service queries.  

But can AI via a machine be used to deliver a personalized experience? Increasingly, the answer is YES. AI has the power to achieve mass personalization by harnessing huge amounts of data from multiple data sources and uncovering patterns in customer behavior. AI uses interaction history to develop a specific profile of each customer, allowing them to deliver high levels of personalization in customer engagement.

Examples of AI-Driven Personalized Customer Service


Image personalization: Netflix has added the concept of artwork personalization to its personalized recommendation system for subscribers. Based on detailed user profiles, Netflix’s algorithms choose personalized visuals to accompany each title.

For example, those who tend to watch movies of a certain genre might be shown an image reflecting that genre, or those users who tend to watch movies featuring a certain actor, might be shown a visual with that actor’s face.

Personalized product recommendations: AI-driven recommendation engines offer customers products tailored to their preferences. 45% of online shoppers are more likely to shop on a website that makes personalized recommendations. Retail giant Amazon has been leading the industry’s CX personalization efforts since 2013. 

Amazon uses past purchases and viewed product history to recommend additional products and its highly-segmented emails utilize personalization tokens targeted to the individual. Amazon reports that 35% of all their sales are generated by the recommendation engine.

Location-based personalization: Home Depot uses AI to offer localized design trends and products based on shoppers’ locations. For example, customers located on the West Coast receive a different set of recommendations than those on the East Coast.

On another level, recognizing that its warehouse-style stores can easily overwhelm customers, the company app, which has been downloaded 20 million times, displays the specific locations of recommended products – sometimes with Waze-like guided directions.


AI Innovations that can boost personalized customer service

Virtual Assistants

Over the last few years, the industry has turned toward conversational AI platforms – known as chatbots – to automate and scale one-on-one conversations. According to Chatbots Magazine, businesses can reduce customer service costs by as much as 30% with virtual agents and chatbots.

Using AI to enhance interactions with customers is quickly gaining traction. According to a 2018 survey, 15% of Americans say they have used a chatbot to interact with a company in the prior 12 months, and Gartner projects that more than 85% of all customer interactions will be managed without a human by 2020.

Chatbots can be utilized to personalize interactions across almost every industry, by enabling a two-way conversational at scale. For example, a software company’s bot may ask if a customer is a new subscriber or an experienced developer, and tailor the technical language of the conversation based on the response.

A pet store bot may first ask about a customer’s pet, and then customize the rest of the interaction around whether the subject of interest is a dog or a bird. Or a foodie bot might ask details about dietary restrictions and flavor preferences before suggesting an eatery.

Online fitness company Verve Health has a chatbot that gives fitness advice. New users are first asked if they have any injuries or health issues, and the bot tailors its workout suggestions based on the user’s limitations.


Customer Analytics

Most businesses capture basic customer data like spend, gender, age and location. With AI, businesses can vastly expand their pool of data to collect information such as real-time location, context, behavior and values.

Collecting data on these variables enables businesses to personalize the customer experience across channels, including customer service, email campaigns, in-app and website recommendations, and social media engagement. According to Gartner, by 2040, more than 40% of all data analytics projects will relate to an aspect of customer experience.

A Washington-based Zoo & Aquarium combines real-time weather data with ticket sales, mobile check-ins, and past attendance data to predict how many employees or supplies to bring in on any given day to best support its visitors.

Easyjet used customer data to build personalized stories, such as when and where the customer first traveled with easyJet, and where they might like to go next. Twiddy, a vacation rental company, analyzed how rental volume and demand shifted from week-to-week, and made pricing recommendations to homeowners based on seasonal trends and the size/location of the home, delighting its customers with helpful, actionable information.


Customers today are more likely than ever to make their purchasing decisions based on customer service. With 73% of consumers choosing to do business with brands that take into account their personal information and 86% of customers stating that personalization plays a role in their decision, the ability to treat customers as unique individuals is a win-win. AI is quickly becoming a priority for companies to boost their CX at scale by providing   memorable personalized customer service.

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