# 3 AI Customer Service Benefits for Small Businesses | Capterra > Knowing what to look for in an AI-powered customer service tool can help you evaluate its effectiveness and make a business case for investment. Learn more in this guide. Source: https://www.capterra.com/resources/ai-customer-service --- Customer Acquisition and RetentionCustomer Services & Support # 3 Ways AI Can Boost Your Customer Service Efforts By Lauren Spiller Lauren Spiller Lauren Spiller is a senior content writer at Capterra, covering sales and CRM with a focus on retail and customer experience. After receiving an MA in rhetor... [See bio & all articles](https://www.capterra.com/resources/author/lspiller/) Published December 20, 2022 6 min read ## Learn how AI can provide value to both your customer service team and customers. Customer service leaders are feeling optimistic about [artificial intelligence (AI)](http://capterra.com/resources/how-does-ai-work), with over 65% planning to add AI-powered solutions to their tech stack by 2023[\[1\]](#sources). But as you start exploring ways to supercharge your own customer service efforts with AI, you might have questions about the benefits of this emerging tech, as well as which solutions will help you achieve your goals.  By understanding what to look for in an AI-powered customer service tool, you can evaluate its effectiveness _and_ build a business case for investment. To help you get there, we’ll discuss three Gartner research-backed benefits of AI solutions for customer service[\[1\]](#sources). We’ll also provide examples of use cases so you can envision AI’s role in your own service strategy.  What is an AI-powered customer service tool? AI-powered customer service refers to a number of different technology solutions that use **machine learning** and **natural language processing** to streamline customer service tasks. - **Machine learning (ML)** extracts insights from data to create data models. These models are then used to make decisions and solve problems. A machine learning model can recommend products to customers and agents by identifying common questions. - **Natural language processing** enables computers to understand human language by analyzing text and extracting meaning from it. The computer is then able to perform tasks such as translating languages and understanding customers’ questions. While AI-powered customer service doesn’t refer to any one tool or [software category](https://www.capterra.com/categories/), we’ll help you narrow your search by highlighting different types of tools that provide the benefits listed below, as well as specific features and capabilities to look for within those tools. ## 1\. AI provides actionable insights through predictive analytics One major benefit of AI-powered tools is their ability to obtain insights and predictions through predictive analytics. Predictive analytics uses data, statistics, algorithms, and machine learning to predict future outcomes based on historical data. You can use these predictions to guide your customer service strategy and ensure that customers receive the best experience possible.  _Image of dashboard from predictive analytics platform_ [_AI Surge_](https://www.capterra.com/p/233422/AI-Surge/) Use cases for AI powered customer service tools that use predictive analytics include personalization, customer lifetime value (CLV) models, and customer routing. **Personalization** allows businesses to tailor an experience or information to a specific customer or segment of customers based on information the company has learned about them. Examples of use cases include creating a [customer journey](https://www.capterra.com/resources/customer-journey-mapping-benefits/), or offering personalized recommendations. **Customer lifetime value models** show how buyers respond to offers and help define what revenue could or should be depending on customer satisfaction. [CLV](https://www.capterra.com/resources/what-are-kpis-in-marketing/#4-customer-lifetime-value-clv) is often used with other metrics such as [customer acquisition cost](https://www.capterra.com/resources/what-are-kpis-in-marketing/#2-customer-acquisition-cost-cac) and customer churn. One way to use a CLV model is to offer loyalty benefits to high-profit customers to maintain those relationships. **Customer routing** uses data and models to route or match customers with the best resource or customer service agent. Two examples of use cases are routing customers to agents with matching or similar personality profiles, and routing high-risk-of-churn customers to agents who score high on customer retention. Feature spotlight To get actionable insights from customer data, check out [conversational artificial intelligence tools](https://www.capterra.com/conversational-ai-platform-software/) with [reporting and analytics](https://www.capterra.com/conversational-ai-platform-software/?feature=%5B29743%5D&sortOrder=sponsored) capabilities. They can help you create reports from each customer interaction, including human-computer interactions. Just make sure it lets you create documents or dashboards for easy-to-read interpretations of that data, like in the image above. ## 2\. AI improves both customer and agent experience through natural language processing Another benefit of AI is its ability to enhance customer _and_ agent experiences using natural language processing. NLP makes it easier for agents to do their jobs by guiding their decisions while assisting customers or performing administrative tasks. NLP also makes it easier for customers to resolve issues on their own, providing a better customer experience.  _Sentiment analysis dashboard in customer experience platform_ [_Keatext_](https://www.capterra.com/p/173675/Keatext/) Use cases for AI powered customer service tools that use natural language processing include conversational agents, such as [chatbots](https://www.capterra.com/resources/applications-of-artificial-intelligence/#practical-application-2-customer-service) and virtual assistants (VAs), and sentiment analysis. **Conversational agents** interact with people via text or voice conversations. The two types we’ll highlight for our use cases are the **AI chatbot** and the **virtual assistant.** - The **AI chatbot** is useful for tasks that involve gathering and forwarding information, such as identifying a user’s intent before passing them on to a human agent, or answering FAQs. It can also assist customers who are having trouble logging into their account and schedule appointments, if linked to a calendar. - The more sophisticated **virtual assistant** helps businesses conduct personalized conversations with users and automate tasks or processes with/without human assistance, such as: - Communicating with customers in ways that feel more natural and less scripted - Observing customer purchasing behavior  - Building and maintaining data models (e.g., trend cycles and retention)  - Predicting and recommending production initiatives **Sentiment analysis** aims to determine a customer’s attitude or overall emotional reaction. At its most basic, it looks for negative versus positive sentiment, but more advanced approaches evaluate based on multiple criteria (e.g., a review of a restaurant can be evaluated for its sentiment toward service, meals, prices, and atmosphere). Feature spotlight To make life easier for both your customers and agents, you should first explore our collection of [natural language processing software](https://www.capterra.com/natural-language-processing-software/). Features such as sentiment and text analysis, speech tagging and filtering, and multi-language processing will not only help you improve customer engagement, but also streamline business processes and enhance business insights. Other AI-powered options to consider include: - [Conversational AI software](https://www.capterra.com/conversational-ai-platform-software/) that offers both [sentiment analysis and chatbot](https://www.capterra.com/conversational-ai-platform-software/?feature=%5B29747%2C29733%5D&sortOrder=sponsored) capabilities - [Customer experience software](https://www.capterra.com/customer-experience-software/) with [sentiment analysis](https://www.capterra.com/customer-experience-software/?feature=%5B36524%5D&sortOrder=sponsored) capabilities - [Chatbot software](https://www.capterra.com/chatbot-software/) that provides automated responses to customer queries - [Virtual assistant software](https://www.capterra.com/virtual-assistant-software/) that helps businesses leverage AI bots ## 3\. AI optimizes workflow through task automation and augmentation A third benefit of AI is both the automation _and_ augmentation of business processes. While a common fear of AI is the [replacement of automatable roles](https://www.capterra.com/resources/restaurant-automation/), an AI tool can actually enhance existing tasks to the benefit of customer support agents. AI’s ability to automate and augment processes reduces costs and improves efficiency by freeing resources for higher-value tasks.  _Pre-built bot worker templates in RPA platform_ [_Tonkean_](https://www.capterra.com/p/173174/Tonkean/) Use cases for AI powered customer service tools that optimize workflow include intelligent document processing (IDP), workforce management (WFM), post-call wrap-up, and robotic process automation (RPA).  **Intelligent document processing** involves extracting data from documents such as an invoice, warranty, or a scanned driver’s license. It uses text analytics and ML to help agents process invoices, orders, payments, and warranties. It can replace existing, labor-intensive manual entry systems, which saves money, reduces labor, and allows for faster service and data entry. **Workforce management** applications help determine how to allot resources for your agents based on records that indicate needs and preferences. They can create schedules that best match anticipated demand for different skill sets at different times and can also offer rewards and recognition suggestions to managers based on data collected in that time period. **Post-call wrap-up** solutions use speech-to-text capabilities to listen to and transcribe calls and assist agents in entering summaries and wrap-up codes. This results in faster record closing, lowered agent fatigue, better compliance, and increased accuracy. **Robotic process automation** solutions automate processes that previously had to be identified and then modeled by a human. They do this through process mining, which analyzes workflows to identify opportunities for improvement. This results in improved processes and increased automation, as shown in the image above. Feature spotlight To automate and augment processes for your customer service team, we recommend the following AI-powered solutions: - **Workforce management solutions** offer [AI-based workforce scheduling](https://www.capterra.com/workforce-management-software/#buyers-guide-content) to address shift work challenges. Browse our database [here.](https://www.capterra.com/workforce-management-software/) - **Robotic process automation software**’s goal is to reduce repetitive work and enhance productivity in your workplace using [AI and machine learning](https://www.capterra.com/robotic-process-automation-software/#buyers-guide-content), as we covered in our use cases above. Learn more [here](https://www.capterra.com/robotic-process-automation-software/). - **Workflow management solutions** also use [machine learning](https://www.capterra.com/workflow-management-software/#buyers-guide-content) to drive automation. Filter your [search](https://www.capterra.com/workflow-management-software/) by platforms that feature [business process automation](https://www.capterra.com/workflow-management-software/?feature=%5B39305%5D&sortOrder=sponsored)**.** ## Building your business case for AI investment Now that you know what to look for in an AI customer service tool, your business case for investment will be even stronger if the solution you’re eyeing offers the following two features: - **CRM integration.** AI solutions can be integrated with your [customer relationship management software](https://www.capterra.com/customer-relationship-management-software/) to automate tasks and speed up customer interactions. They do this by enabling search functionality that guides your agents to the information they need to resolve queries and increase customer satisfaction. - **Code-free development.** [No-code software development](https://www.capterra.com/resources/how-pms-can-use-low-code-and-no-code-software-to-fill-the-tech-talent-gap/) allows non-technical employees to design and deploy software modules with minimal coding experience, which saves you time and money while still getting your team the tools they need.  Not ready to invest in software? You might be interested in AI-as-a-Service, or AIaaS. AIaaS allows you to experiment with AI technology to meet business goals without a large initial investment and with lower risk.  _Note: The screenshots of applications selected in this article are examples to show a feature in context and are not intended as endorsements or recommendations._ ## Capterra's 2026 Software Buying Trends Report ### Download our 2026 Software Buying Trends Report to see how successful software adopters avoid disappointment and how your business can, too. * * * Sources 1. [3 Ways AI Benefits Customer Service Organizations](https://www.gartner.com/document/4007924), Gartner * * * Looking for Artificial Intelligence software?Check out Capterra's list of the [best Artificial Intelligence software](https://www.capterra.com/artificial-intelligence-software/) solutions. ### Was this article helpful? * * * ## About the Author [### Lauren Spiller](https://www.capterra.com/resources/author/lspiller/) Lauren Spiller is a senior content writer at Capterra, covering sales and CRM with a focus on retail and customer experience. After receiving an MA in rhetoric and composition from Texas State University, Lauren has pursued a career that allows her to help others through writing. Lauren’s research and writing for Capterra is informed by nearly 300,000 authentic user reviews and more than 15,000 interactions between Capterra software advisors and CRM or sales software buyers. Lauren also... ### RELATED READING - [Free CRM Software vs. Paid: Features, Costs, and Comparison](https://www.capterra.com/resources/free-vs-paid-software-for-crm-guide/) - [How to Unlock Real AI Benefits in Sales and Marketing](https://www.capterra.com/resources/ai-benefits-sales-marketing-software/) - [5 Key Help Desk Software Features With Top Products That Offer Them](https://www.capterra.com/resources/help-desk-software-key-features/) - [Help Desk Software for IT Support: Features and Benefits 1,300+ Users Value](https://www.capterra.com/resources/it-help-desk-software-features-benefits/) - [Checklist for SMBs: How to Choose the Right Customer Service Help Desk Software for Your Business Size](https://www.capterra.com/resources/choosing-customer-support-help-desk-software/) - [What is CRM Software and What Does a CRM System Do?](https://www.capterra.com/resources/what-is-crm-software/) - [CRM Software with AI Features in 2026: Benefits, Features, Costs, and FAQs](https://www.capterra.com/resources/crm-software-with-ai-features-guide/) - [Contact Management in CRM: Features, Benefits, Best Practices, and FAQs](https://www.capterra.com/resources/contact-management-in-crm-guide/) - [How Help Desk Automation Drives Stronger Support Performance](https://www.capterra.com/resources/helpdesk-automation/)