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Why AI Makes Customer Experience Even More Important for Your Business (Thinks Out Loud Episode 427)

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Smart companies are using AI to improve their sales, marketing, and customer service. Even where the tools aren’t transformational, they’re helping businesses large and small drive greater effectiveness and efficiency. And that’s even before you consider their impact on the individuals on your team.

How is your business supposed to compete with that? Is the answer to “fight fire with fire” and simply “sprinkle a little AI on it?” Or, is there a better way? (Spoiler: There’s a better way).

So, what can you do? The answer isn’t just to think about improving your tech. It’s about improving your humanity. It’s about connecting with customers not as numbers or accounts… but as human beings. AI makes customer experience even more important. And thinking through why and how you can do that is what this episode of Thinks Out Loud is all about.

Want to learn more? Here are the show notes for you.

Why AI Makes Customer Experience Even More Important for Your Business (Thinks Out Loud Episode 427) — Headlines and Show Notes

Show Notes and Links

You might also enjoy this webinar I recently participated in with Miles Partnership that looked at "The Power of Generative AI and ChatGPT: What It Means for Tourism & Hospitality" here:

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Recorded using a Shure SM7B Vocal Dynamic Microphone and a Focusrite Scarlett 4i4 (3rd Gen) USB Audio Interface into Logic Pro X for the Mac.

Running time: 21m 04s

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Transcript: Why AI Makes Customer Experience Even More Important for Your Business

Well hello again everybody and welcome back to Thinks Out Loud, your source for all the digital expertise your business needs. My name is Tim Peter. This is episode 427 of the Big Show and I think we’ve got a really cool episode for you today. There is a lot to talk about.

Given all the changes around artificial intelligence and technology more broadly, I’ve been thinking a ton lately about how businesses can continue to compete, particularly with the largest companies out there, with Big Tech. This is especially problematic for small and mid-sized businesses because you don’t necessarily have the technical capabilities, you don’t necessarily have an IT team, you’re not going to build your AI, your own AI models or things along those lines.

It’s also not limited to those companies, because plenty of larger businesses aren’t going to do those things either. And even if you do, competing with, I don’t know, Google, and Amazon, and Apple, and Microsoft, and Meta/Facebook, it’s reasonable to assume that they’re going to do a really good job of that.

So, the question becomes, well, how do you compete?

And there’s a couple of phrases that I keep coming back to again and again that all say the same thing in slightly different ways. One is from my friend Mark Schaefer, who says, the most human company wins. Going back even further, I’m reminded of Peter Drucker’s famous saying that the first job of business is to create a customer.

I’d argue that there’s only one way to do that. There’s only one way to do any of those, and that’s to take care of our customers.

In a prior episode of the show, I talked about why we owe it to our customers to make their lives better. That’s the core of everything you do. It’s all about how do we help our customers accomplish their goals and get on with their lives.

And the companies that do that well are the companies who will succeed going forward. Every time.

You’ve heard me say plenty of times in the past that customer experience is queen. I’m always going to use that phrase. I love that phrase. I think it’s an incredibly important framing device for thinking about how we should treat our customers.

Also, in one way of thinking, it’s wrong. Bear with me. I don’t want to throw out years and years and years of research and years and years and years experience and years and years of speaking about this topic. Customer experience is queen. It also isn’t just the queen. In many ways, customer experience is everything.

Remember, social is people. All marketing is social, and the most human company wins.

Obviously, I’m bullish on artificial intelligence and its potential impacts on marketing and on customer service. You’re going to be using tools that have AI embedded in them more and more every day. What’s also true is that AI is a tool. So are many of the things you use in your marketing and in your business every day. A customer relationship management (CRM) platform is a tool. So is a customer data platform, a CDP. So is search engine marketing and email marketing and retargeting and, frankly, things like training for your employees. They are all ways of providing your customers with better experiences. Providing a customer with a better experience.

Or at least those tools should be.

If you’re not using those tools to improve the customer experience, to connect more deeply with your customers, to make their lives better, I’d say you’re doing it wrong. I’m going to say that again because it’s super important. If you’re not using these tools to improve customer experience, to connect more deeply with your customers, to make their lives better, you’re doing it wrong.

It’s been true for years that we have to make that experience better. Sure, we want to be more efficient, we want a lower cost, I’ll come to that in a moment. But one of the things you should be doing with getting more efficient and getting more effective at what you do is using that to create better, deeper experiences.

The fact is that most AI will be invisible to users. Most tools, when they work well, are invisible to users. Most people still say that they haven’t used AI yet. There’s a lot of research that shows the vast majority of Americans say they have not yet used AI. And that’s simply not true.

Because Google is the most visited website in the world. And it’s showing AI Overviews — its own Artificial Intelligence Overviews product — roughly 15 percent of the time. In e-commerce, it’s showing AI overviews roughly 23 percent of the time. In healthcare, it’s showing it more than 60 percent of the time. In other words, though, almost one in four e-commerce searches on Google present the company with an AI generated experience and sixty percent of healthcare related experiences are AI generated. Customers just don’t see it because they don’t need to. To borrow a phrase from Apple, “it just works.”

And you can apply this to almost any technology we use to connect with customers. Think about the first website you ever saw, you ever interacted with, or at least the first one you can remember. You might even be able to apply this to one you saw today. You can tell when the company you’re working with values its customers over its brand message, or frankly, the egos of folks in the corner office. It’s instantly apparent. The former company, that values its customers, talks about your problems and how the company can help solve them. Or better yet, it simply helps you solve them without talking about anything. It just gets you to the thing you need.

The other type of company talks about how great the company is. They talk about their values. They talk about, you know, all of the wonderful things that they do in the community. And that’s great. I’m not saying you shouldn’t talk about that on your website. I’m saying it’s not what you should lead with.

Doesn’t it piss you off when a website or an app doesn’t help you do what you’re trying to do? You’re busy. Your customers are busy. We all want to accomplish the goals that we have, the tasks that we have to check off of our to do lists, and get back to the things that actually matter in our lives, right?

That’s the whole game right there.

Historically, Big Tech has done this brilliantly. When Big Tech gets it right, it’s because they’re focused on the needs of their customers. Google’s basic interface hasn’t changed in years. It’s simply a search box asking, what do you need? There’s a reason they’ve become the most visited website in the world.

You want another example? Open up your browser and type in relentless.com. For those of you who’ve never done it before, or if you’re listening to this in the car, or on a treadmill or something along those lines, it’s going to take you to Amazon.

Jeff Bezos’ original idea was to be relentless about serving the customer. They obviously didn’t use that as their brand name; they decided Amazon would be better. But they’ve kept the URL alive. And I’d argue on their best days, they’ve kept the idea alive.

There’s a reason they’ve become Amazon, this Big Tech behemoth that scares the hell out of people. And it’s almost entirely due to that relentless approach to taking care of the customer.

I’d also argue that they’ve lost their way in recent times, at least some of the time. They’ve put too much focus on advertisers, too much focus on cheap, questionable products that flood their search results, too little focus on eliminating spammy reviews. And it’s why you’re seeing customers like Shein or Temu have some success taking business from Amazon. Yes, obviously there’s a low price there thing, too. I’d also say that this is a case where two or more things can be true at once. It’s absolutely true that the experience on Amazon isn’t as good as it once was, and that is undoubtedly tied to some of the struggles that they’re facing with these upstart competitors.

Okay, you might ask, though, what about business value? You know, customer experience can be hard. Taking care of people can be hard. Isn’t the bottom line important and isn’t providing a great customer experience expensive? Sure, it is. It can be. I agree with that. You can absolutely, absolutely do it in ways that cost a bunch of money.

I would also argue that it’s a lot cheaper than providing a bad experience.

  • Are guests who cancel their reservations at your hotel or restaurant cheap?
  • Are returns of your products cheap?
  • Do you think bad reviews don’t cost you money?

More simply, do you think you’re going to drive business value if you don’t take care of your customers?

I can’t picture that. We all know that your customers rely on their friends and family and influencers and creators to help them find the products and services that work for their needs. Word of mouth has been a core component of marketing, the most social form of marketing since the beginnings of business.

There’s great, great research out there that shows that seven in 10 people, 69 percent of all Americans aged 16 to 54, follow creators and influencers regularly, almost every day.

  • 55 percent of those who are exposed to a brand through those creators research the brand’s website.
  • 46 percent of those follow a brand on social media.
  • 43 percent of them purchase from a brand.
  • And 42 percent recommend brands that they learn about through creators and influencers to someone else.

Do you think creators and influencers want to be associated with people who, or with companies who provide bad experiences? I guarantee that they don’t. So we need to be thinking about how we’re building an experience that matters.

I worked for years for a bunch of hotel companies running e-commerce and web channels for them. My team was responsible for hundreds of millions of dollars in revenue, many hundreds of millions of dollars in revenue for our hotels. And we had great ROAS on our ads, we had outstanding rankings in search engines, we had a really good social presence, fantastic email campaigns, an amazing conversion rate. We drove traffic to our sites, and we turned that traffic into sales. By any measure, we were incredibly successful.

The one thing we found though, again and again, was that very little we did affected repeat business. Don’t get me wrong, we were able to get people to return to the website and book with us again.

But the website wasn’t what drove the repeats. It was the experience guests had on property. The better the experience, the more likely guests were to return. More importantly, the worse the experience, the less likely guests were to return. There was nothing we could do to get people to come back. No amount of discount we could offer for most customers to get them to come back if they’d had truly terrible experiences at our properties consistently.

And I see the same thing with clients in B2C and B2B every day today. Happy customers buy more, they spend more, they repeat, they renew, they return.

A B2B client I work with changed its customer support process over the course of the last year or so. They’ve worked to improve first touch issue resolution. They want to make it easier for their customers to get answers that they need and then, you know, get back to work. The result has been a measurable increase in client retention and a streamlined renewal pipeline for their sales teams. They’re also not having to offer as many renewal discounts as they once did. It’s improving their revenues and it’s improving their profitability.

Now what they’re starting to do is layer technology on top of that to make the support process even easier. They’ve provided some AI support tools to their account teams and to their CSRs. They’ve provided that capability to internal folks to make issue resolution even simpler.

They didn’t turn on a chatbot for customers. They didn’t turn this into a self service thing. Instead, they’ve provided that capability to internal folks to make it faster and easier for their team to answer customer questions. And make the customer experience better. Ultimately, they’re simply trying to be more effective and efficient using the tools they’ve already built to provide a great experience to the customer.

They’re making that experience better, and expect to see some pretty significant benefits from it over time.

We live in a time of fairly consistent, continual, and rapid change. And it makes me think about a question that Amazon’s Jeff Bezos asked again and again and again, which is, in changing circumstances, don’t ask what will change or when will things change. Ask, “what won’t change?”

And the simple fact is, the first job of business is to create a customer. The most human company wins again and again and again. Creating great experiences for customers gets them to come back and buy from you and interact with you and want to work with you again and again and again.

That’s not going to change.

Social is people. All marketing is social at its best. Customer experience is queen. Give the queen her proper respect. We do owe it to our customers to make their lives better. That’s what they’re looking for. That’s ultimately what they care about and what they want to buy. That’s what they need. A better life. When you take care of your customer, your business gets better, your customer’s lives get better, and I’d argue our world gets a little better too.

So let’s make our customer’s world a better place. Think about how you can make your business more human. Think about how you can be more social, more focused on people.

The better a job you do of that, the better off we’ll all be.

Show Wrap-Up and Credits

Now, looking at the clock on the wall, we are out of time for this week. I want to remind you again that you can find the show notes for this episode, as well as an archive of all past episodes, by going to timpeter.com/podcast. Again, that’s timpeter.com/podcast. Just look for episode 427.

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Show Outro

Finally, and I know I say this a lot, but I want you to know how thrilled I am that you keep listening to what we do here.

It means so much to me. You are the reason we do this show. You’re the reason that Thinks Out Loud happens. So please keep your messages coming on LinkedIn, keep hitting me up on Twitter, sending things via email. I love getting the chance to talk with you, to hear what’s going on in your world, and to learn how we can do a better job building the types of content and community and information and insights that work for you and work for your business.

So with all of that said, I hope you have a fantastic rest of your day. I hope you have a wonderful week ahead, and I will look forward to speaking with you here on Thinks Out Loud next time. Until then, please be well, be safe, and as always, take care, everybody.

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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