Predictive customer service in action: best practices from market leaders
In recent weeks, we've reported on an innovative service that has recently become fashionable on the market and has enormous potential and a wide range of uses. Have you figured out what we're talking about? Probably, but since the name is cool too, we'll say it anyway: predictive customer service!
"Previously on melibo …"
In this article, we described predictive customer service in general and used a super simple example to explain how it works. It's the packed lunch someone prepared for you in your first years at school that you found in your backpack every day.
Today we want to tell you about some industry giants for whom predictive customer service is indeed their bread and butter – pun intended.
1. Sprint Corporation: AI to reduce churn and increase NPS
💡 Sprint Nextel Corporation is an American telecommunications company headquartered in Overland Park (Kansas, USA). With 55.6 million customers, it's the third-largest mobile carrier in the US.
How Sprint used predictive customer service
Sprint now uses AI to create better customer experiences. In 2014, its customer churn rate was 2.3% – twice as high as its biggest competitors. Data analysis was carried out by CX agents, which allowed for human error and shook agents' confidence in their own judgment. In practice, this meant CX agents reviewed numerous offers and picked the best one while customers waited on the other end of the line. And long waits are never pleasant.
So Sprint implemented predictive and self-learning analytics to identify customers at risk of churning. Customers were also proactively given personalized retention offers. The results were astonishing.
Sprint actually managed to reduce churn by 10% to a historic low and increase its Net Promoter Score (NPS) by 40%.
2. Harley-Davidson finds new potential customers with AI
💡 The Harley-Davidson Motor Company is an American motorcycle manufacturer founded in 1903 in Milwaukee (Wisconsin, USA).
How Harley-Davidson uses predictive customer service
The popular motorcycle company loves predictive analytics. They're used to approach potential customers, generate leads and close sales.
Harley-Davidson's AI program is called Albert and recognizes customers who are ready to make a purchase. Employees can then contact these customers directly and guide them through the sales process to find the perfect motorcycle. It's a win-win: customers get personal service at the moment they're ready to buy, and the company can focus on the "right" customers.
3. Spotify & Netflix figure out customers' preferences and tastes (on their own)
💡 Spotify offers on-demand music streaming. The service was founded in 2006 in Stockholm (Sweden).
💡 Netflix is an American company that distributes movies, TV series and other paid entertainment content online. It was founded in 1997 in Scotts Valley (California, USA).
How Spotify and Netflix use predictive customer service
Both Spotify and Netflix use AI algorithms as the basis for their services. One example: when customers browse a different movie category on Netflix than before, new recommendations need to be suggested. This gets customers to watch a particular movie.
Spotify's Discover Weekly playlists work the same way: algorithms figure out what customers like and dislike and suggest coherent content (songs, podcasts, etc.) accordingly.
4. Volvo spots damage before it happens
💡 Volvo Car Corporation is a Swedish car manufacturer founded in 1927 in Gothenburg.
How Volvo uses predictive customer service
What's every driver's nightmare? Whether you drive the car of your dreams or just a car, nobody wants a sudden, unexpected breakdown. But Volvo sees it coming, and here's how: Volvo uses data to predict when a vehicle needs servicing and which parts need repairing or replacing.
This is made possible by an early warning system that analyzes over a million data points and events every week. This predicts the failure rate of individual parts. With this information, the company can recommend customer service and maintenance schedules before a part breaks and thus avoid a bigger problem. Volvo also uses AI-powered data to identify and predict the most popular and comfortable features for drivers.
5. Sephora finds the right makeup products for you
💡 Sephora is a multinational beauty retailer founded in France in 1970. It has stores in 17 countries worldwide.
How Sephora uses predictive customer service
Searching for new makeup and beauty products can be overwhelming. But Sephora has made it easier. The retailer has introduced numerous technology offerings that help customers decide on the right product. The tools Sephora offers recommend one product or another depending on the person's lifestyle and skin tone.
Sephora's data then creates personalized profiles based on the person's purchase history and preferences. The AI searches this data to predict which products customers will need or like. These then appear in an individual section called "Recommended for you" on the homepage.
Sephora also uses data on how much its customers have spent this year to predict their loyalty and send targeted rewards and marketing campaigns. The systems work: 80% of customers are completely loyal to Sephora.
6. The Royal Bank of Scotland uses data for troubleshooting
💡 The Royal Bank of Scotland Group PLC is one of the three clearing banks and one of the oldest in the United Kingdom, founded in 1727 in Edinburgh by royal charter.
How the Royal Bank uses predictive customer service
Well, banks are made of numbers and patterns. The Royal Bank of Scotland uses these patterns to predict which products customers will want and which problems might come up along the way.
Through real-time data analysis, the bank can track complaints and understand the problems behind them – and have a solution ready. Bringing all data together in one dashboard makes it easy to understand customers, predict their wishes and then fulfill them automatically.
Examples of predictive customer service – conclusion
In this article, we've introduced you to some applications of predictive customer service in the real world.
As you can see, it's used in a wide range of sectors: telecommunications, the car and motorcycle industry, banking and more … AI knows practically no limits.
The goal these giants share is to prevent problems from occurring by detecting and avoiding them early. And in case they do occur, to have a solution ready – in other words, to be there before assistance is needed. Whether it's the moment you need a new movie category or before you have to take your car to the garage.
