How AI is Transforming Customer Service: Practical Insights for Small to Midsize Businesses

AI and hand

Over the last few years, artificial intelligence (AI) has experienced explosive growth in the public consciousness, with innovations revolutionizing virtually every industry, from the arts to manufacturing. One area where automation with AI has proven immensely beneficial is in customer service. From chatbots and virtual assistants that respond to customer inquiries to predictive analytics that help SMBs target marketing efforts, AI can improve customer engagement and boost your business.  

Previously, we introduced the top five areas where AI is streamlining processes and aiding business growth. In this article, the second in our series of deep dives into those five areas, we’ll focus on how AI is transforming customer service.   

The Evolving Landscape of Customer Service

Traditional customer service methods for small and medium-sized businesses (SMBs) involve manual processes, such as phone calls, email responses, and face-to-face interactions. While these methods can be effective, they come with significant challenges, particularly maintaining the staff to respond to customer needs. Human-provided support often entails slow response times, the potential for errors, and difficulty scaling to meet growing demands. SMBs may struggle to maintain consistent service quality and find it challenging to keep up with the expectations of today’s tech-savvy customers who seek instant, personalized support at all hours of the day.
Here’s where AI comes in. Rather than relying on time-consuming and error-prone methods, AI automates routine tasks, saving you time and money. AI’s advanced algorithms help provide precise and instantaneous answers, making customers feel valued and increasing your business’s overall efficiency.   

Understanding AI’s Impact on Customer Service 

As businesses increasingly adopt AI-powered tools, customer service has become more efficient, responsive, and personalized. AI can quickly analyze customer data, automate routine tasks, and provide instant responses, allowing for faster issue resolution and improved customer experiences. This crucial shift makes AI an indispensable ally in meeting these demands. Ultimately, AI helps companies enhance customer satisfaction and stay competitive in a digital-first era.  

Practical AI Solutions for SMBs in Customer Service

So far, we’ve discussed the general aspects of AI and customer service, but AI is not a blanket approach. Let’s dig into a few specific AI tools and how they’re helping customer service. 


Chatbots are computer programs that use artificial intelligence and natural language processing to interact with users by answering questions and performing tasks. For instance, you can add a chatbot to your company’s website to provide personalized purchasing recommendations based on the customer’s stated interests and preferences. 

Voice Assistants

As with chatbots, voice assistants use natural language processing to interact with customers by automated, voice-activated access to products or services. SMBs can incorporate voice assistants in ordering systems, appointment scheduling, or customer support hotlines, making it convenient for customers to engage with their business without hiring additional support  staff.

When implementing AI voice assistants or chatbots, however, be sure to consider your customer base. Are your customers strongly averse to automated services? Do not be afraid to test new ideas, but do not ignore customer feedback. Also, consider the following areas where your customer service can benefit from AI working more behind the scenes:

Predictive Analysis

Predictive analysis is an AI application that combs historical data and market trends to forecast customer demand. SMBs can use this information to optimize inventory levels and enhance supply chain management, ensuring they stock the right products at the right time. Predictive analytics can help SMBs target marketing efforts, allowing them to identify potential customers, tailor campaigns, and improve customer retention through personalized recommendations. 

Personalization Engines

Personalization engines are AI-driven software systems that tailor content, product recommendations, and user experiences to individual preferences. SMBs can use these engines to enhance customer engagement by delivering personalized content and product suggestions through their websites, emails, and marketing campaigns. By analyzing user behavior and preferences, SMBs can boost conversion rates, customer satisfaction, and overall sales, creating a more tailored and engaging customer journey.

Automated Feedback Collection and Analysis

AI-powered survey tools and sentiment analysis software can collect customer feedback, analyze it for insights, and automatically generate reports highlighting trends and improvement areas. Some methods for collecting feedback include: 

  • Chatbot surveys
  • Automated email surveys
  • Social media analysis
  • Online review analysis 

Whichever method you choose, AI’s unparalleled ability to comb vast amounts of data and aggregate it for important insights can be a boon for nearly any small-to-medium-sized business.   

AI’s Tangible Benefits for SMB Owners

Improved customer service—and the repeat business that often comes with it—is a tremendous benefit of AI, but it’s not the only one. Here are a few more positive outcomes your business may get from using AI for customer service.  

Cost Savings

Automating customer service tasks means you can get by with a much smaller human workforce, and AI is comparatively cheaper than paying an hourly wage or salary. Depending on the application, you might pay a subscription fee or pay-per-use fee, or you could opt for a one-time perpetual license payment.


AI means faster problem resolution, which can lead to increased customer retention and loyalty. Automating routine tasks, such as responding to common inquiries or processing orders, frees staff to focus on more complex issues. 


AI solutions can easily handle increased customer interactions, especially during peak times. This allows SMBs to overcome size or workforce limitations, scaling AI usage along with their business’s growth.   

Getting Started with AI in Customer Service for SMBs

If the benefits detailed above have piqued your interest, here are a few practical steps to start integrating AI into your business’s customer service approach. 

  1. Identify the most pressing customer service needs/challenges. For instance, if your company is in a sales slump, predictive analytics can help convert webpage clicks to sales by showing you how to tailor your site to customers’ preferences and buying patterns. 
  2. Start with a basic chatbot or voice assistant, then expand. Adding these low-cost, high-efficacy AI tools to your website can be a great start for incorporating AI into your customer service approach. You can also gauge customers’ satisfaction with the new tools via AI-powered surveys. 
  3. Collaborate with AI solution providers or platforms designed specifically for SMBs. For instance, Shopify provides personalized product recommendations and streamlines e-commerce operations for SMBs. Mailchimp’s AI-driven email marketing platform assists SMBs in creating personalized email campaigns and optimizing email content to improve consumer engagement.
  4. Regularly update AI models and train them based on new data and customer interactions. Collecting and integrating new customer data, monitoring AI performance, and fine-tuning algorithms to adapt to changing market dynamics keeps your business current in an ever-changing landscape.

The opportunities AI presents for revolutionizing your customer service department are plentiful. The comparatively low cost of many AI products can also help your bottom line and free up personnel to tackle more complex, hands-on tasks. 

While improving customer service is one way to spruce up your business as you know it, AI can also provide insights into new areas for business growth. Next in the series, we’ll explore how AI can enhance ideation and innovation for SMBs. 

It really all comes down to maximizing your business’s potential – for yourself, your employees, and for your customers. When you’re looking for ways to improve your business’s value, remember that Viking can help. Our professional business valuations provide a wealth of information about the current status of your business, plus actionable insight for maximizing opportunities, including how you can leverage AI. Contact Viking today for a no-cost, confidential business valuation. 

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