We know that the range of AI-loaded smart products is constantly expanding. But what’s less obvious is how AI is also transforming the world of services – enabling service-based businesses to improve their offering, and even develop entirely new services and revenue streams that are underpinned by AI.
Just as in product-based businesses, AI has become a driving factor for success in the service sector. Here are three ways businesses are delivering a better service through AI.
1. Delivering a highly personalized offering
AI provides incredible opportunities to get to know your customers – what they like and don’t like, what they actually do (as opposed to what they say they do), how they engage with your service, what factors would encourage them to engage more deeply, and do on.
This is important because the more you understand your customers, the more you can customize your service to suit their needs. Driven by the likes of Netflix, this notion of customization and personalization is a major business trend. If your customers don’t already expect a more intelligent, personalized service offering, they soon will do. If you aren’t able to offer such a service, rest assured your competitors will. (And, increasingly, that competition may come from the tech sector itself. Consider the rise of personal finance apps that are seriously challenging traditional banking service providers.)
We tend to think of retail as a product-based industry, but in fact, it perfectly illustrates this move towards more personalized services. Amazon was an early pioneer of data-driven, personalized shopping recommendations, but now a wave of new services has sprung up to offer a similarly tailored approach for consumers. Stitch Fix, which delivers hand-picked clothing to your door, is a great example. With Stitch Fix, you detail your size, style preferences, and lifestyle in a questionnaire. Then, using AI, the system pre-selects clothes that will fit and suit you, and a (human) personal stylist chooses the best options from that pre-selected list. And voila, the perfect clothes for you arrive at your door every month. If you don’t like or need an item, you simply return it, and the system uses that information to provide better recommendations in the future.
2. Giving customers more value
I believe the most successful companies of the future will be those that are able to develop a meaningful, value-adding service relationship with their customers. And by value-adding, I mean genuinely making customers’ lives easier, better, healthier, and so on.
Health and life insurance provider Vitality Health is one company that’s striving to develop a deeper relationship with its customers. Rather than paying out for sickness, as traditional health insurance providers do, Vitality pays for wellness – by essentially using data and AI to track and reward customers’ healthy behavior. So, for example, members earn points according to how many steps they take each day, and these points can be redeemed against discounted services that support a healthier lifestyle. The healthier your lifestyle, the bigger the rewards. In this shared value system, customers benefit from cost savings (and, of course, healthier lives), while the insurer benefits from lower healthcare costs.
3. Predicting customers’ needs
One of the really exciting things about AI is its ability to predict behavior. The more data you have, the more accurate those predictions become, which allows you to provide services that perfectly anticipate your customers’ needs.
Amazon – always at the forefront of data- and AI-driven customer relationships – is so confident in its predictive capabilities, the company has patented what it calls “anticipatory shipping.” In essence, this means Amazon has the know-how to predict, pack, and ship products to you before you even place an order for them.
But this sort of predictive capability isn’t the sole domain of big tech companies. Elevator and escalator company KONE is able to provide a more predictive maintenance service after introducing sensors into its approximately one million lifts around the world. Because these sensors monitor how the machinery is working, KONE can better predict and manage maintenance needs, and provide a smoother maintenance service for customers.
The takeaway: Your services need to get smarter
Whether your company is already a service-based business, or you’re considering branching from products into services, AI is crucial to delivering the sort of service your customers want and need.
Because, in this increasingly data-driven world, customers expect service providers of all kinds to deliver more intelligent, customized services. It stands to reason, then, that the most successful service providers of the future will be those that can use data and AI to provide more thoughtful, responsive solutions for their customers. If you fail to do this – if you ignore AI as a powerful means to enhance your service offering – you risk being seriously left behind.
AI is going to impact businesses of all shapes and sizes, across all industries. Discover how to prepare your organization for an AI-driven world in my new book, The Intelligence Revolution: Transforming Your Business With AI.