How to use
AI in business
to gain
a competitive
advantage

Author: Mike Elgan

Artificial Intelligence (AI) continues to be widely adopted by businesses, with 86% of respondents to a recent PwC survey saying it is "mainstream technology" at their company. With such broad usage, it can be challenging to best determine how to use AI in your business to gain a competitive advantage.

As this technology grows, customers are becoming increasingly comfortable with greater usage of AI in business. For example, only 16% of respondents expressed discomfort about fully automated interactions in a recent Verizon research survey. However, this should not be seen as a desire to completely remove human interaction. The research also shows comfort levels are highest when machine communication is combined with genuine human communication, with 78% saying blended interactions are equally or more satisfying than those that are human-only.

Finding the balance right between AI and human interactions—and appropriate transparency around the use of AI in business—will be increasingly important going forward. Here are some examples of how to use AI in your business in a way that strengthens relationships with your customers, delivers them an optimized service and benefits your bottom line.

How to use AI in your business to optimize customer experience

Client-facing AI operations have the potential to greatly improve your bottom-line because you can provide a tailored experience. This is a long-standing recipe for success, as customers typically want to return to sellers who they feel know them and what they like. However, as with any customer interaction, the reputation of the company is at risk if customers are unhappy or feel deceived.

Chatbots

With chatbots, customers don't have to call during specified hours or wait on hold for an available employee to purchase something, resolve an issue or have a question answered. It is important when implementing this technology that it is properly tested and processes are well-developed for when to escalate to human contact. When asked what would cause them to cease involvement with a brand, 27% of the Verizon survey respondents said an inability to speak with a live agent.

The use of chatbots and other technology that can mimic humans raises issues around transparency with how AI can be used in business. About two-thirds of the Verizon survey respondents say they want companies to indicate during an interaction when they are communicating with an AI-powered bot and not a human being.

Hyper personalization

This strategy takes things up a notch, with AI and near-real-time data providing extremely relevant and timely content to customers. Customer behavior and preferences can be finely captured, and that data can be turned into specific messaging delivered at the right time and place for maximum effect for customers.

Because hyper personalization, by its nature, involves the processing of customer data, it's important to safeguard this information and to be transparent with customers that information is being used to personalize their experience, thereby helping to build trust even further. Hyper personalization requires AI to analyze relevant data and companies must balance the desires for personalization and privacy. Obtaining personal data from external sources would cause 34% of the Verizon survey respondents to cease involvement with a brand.

How to use AI in your business to reduce costs

There are a number of AI operations that companies can introduce to their back-end operations. These not only can reduce costs but also have minimal to no interactions with customers and are therefore less likely to impact customers’ impressions of your brand. Examples of AI in business include:

Optimizing and automating business processes: Automating tasks can allow staff to focus on tasks that require human input and ingenuity thereby helping to save time and optimize personnel costs.
Increasing factory output: Manufacturers can use AI to help optimize certain production aspects, from supply chain management to scheduling optimization. The result can be higher output at lower cost.
Supply chain management: Machine learning algorithms can be leveraged in the supply chain to forecast demand, enable optimization of the transport and availability of goods, while minimizing overstocking or running out of stock on items.
Predictive machine maintenance: Factories, fleets, data centers and other elements of your organization that rely on any kind of machine that needs maintenance can be optimized with AI in business, reducing downtime and extending the functional life of the machines for long-term cost savings.
Smart store design: AI can help organize the placement of products in a store to maximize sales and manage inventory.

As AI continues to become more sophisticated, the best way to think about how to use AI in your business is to consider the fundamentals. AI in business works best when it helps with many of the traditional challenges companies have seemingly always faced, such as: