Key Takeaways
- Customer churn due to poor customer service costs businesses hundreds of billions per year.
- AI-powered knowledge base technology can significantly improve every aspect of your customer service.
- An AI KMS offers better answers, faster call resolution, and can even assist customers via self-serve portals.
- When AI is implemented on a properly-prepared knowledge base, the improvements are nearly instantaneous.
The Financial Importance of Effective Knowledge Management
Good knowledge management is a must for any modern business, but it’s never more important than in customer service. Customer expectations for service and their overall experience are rising, and a business must be able to satisfy them.
This isn’t a theoretical situation either. Studies have shown that roughly 1/3 of customers are willing to abandon a company after a single bad customer experience (CX). That rises to more than 2/3, if there are two bad experiences. According to Forbes, this level of customer churn leads to hundreds of billions in lost revenues overall.
Given that new customer acquisition typically costs 5x-10x as much as customer retention, it’s clear that companies with CX issues must stop the bleeding. Better customer service is far cheaper than the cost of bad customer service.
This is why companies are increasingly adopting AI knowledge base technologies. Despite its growing pains as a technology, AI is already a fantastic fit for CS, improving services across the board. Your agents can be trained more easily, then provide better and faster call resolutions, leading to better CX and higher customer satisfaction. Even managing your call centers can become easier, with AI assistance.
Read on to learn more about how AI is revolutionizing customer service.
What Does An AI Knowledge Base Mean?
When discussing AI in your knowledge base system, it boils down to having a locally-trained AI system which has digested your entire knowledge base and then acts as a Knowledge Management System (KMS). Rather than agents – or customers – having to search through KB articles, FAQs, and similar documentation, they can simply ask the AI natural-language questions and have it provide appropriate answers.
The AI also has access to customer records, and can offer up contextually-aware suggestions that take the customer’s history into account.
Additionally, the AI can monitor content within the KB – watching for errors or discrepancies, and reporting them to human overseers. It can also suggest new articles, or potentially even be allowed to build new KB articles from existing information.
In some cases, AI can also be enhanced with MCP support, which allows it to interact with other outside AI systems. This could be used to retrieve data not currently in your KB, such as a software company’s CS agent using AI to get detailed technical info on hardware their software is being run on.
When properly implemented, an AI knowledge base chatbot basically becomes a valuable co-worker. The machine handles difficult research and analysis tasks that would take a human too long to accomplish manually.
How A Better Knowledge Base Boosts Customer Satisfaction
A well-implemented knowledge base backed by AI interfaces can improve customers’ experiences in numerous ways, even some that might not be immediately apparent.
1 – Faster call resolution
The biggest immediate benefit you’re likely to see from an AI KB system is better metrics from your CS agents. With an AI agent helping with research as well as parsing information from numerous documents, the human agent is able to quickly find answers to even difficult questions. This means:
- Lower average handle times (AHT)
- Higher first call resolution (FCR) rates
- Fewer repeat customer calls and/or scheduled callbacks
- Significantly higher customer satisfaction
Basically, it’s the definition of doing more, with less. You’ll be spending less money per call, while still providing great CX.
2 – Better agent training / feedback
AI can also be a big boon in training, as many AI-powered KMS systems now come with integrated training modules. This provides a twofold benefit: it means that agents are training directly on verified, up-to-date information within the knowledge base and they’re doing so within the same software suite they’ll be using on the job.
The result is that training time can be slashed by 50% or more, without impacting the quality of the agent’s training. Given how high turnover tends to be in CS, this leads to significant cost savings over time.
3 – Improved call routing
As mentioned above, the AI system has access to customer records, so it can assist in routing as well. When a customer calls in, the AI takes a first look at their account history and uses that to help decide on the first stop for their call.
Transfers can’t be eliminated entirely, but AI can be quite good at ‘guessing’ the right department for a customer and reducing annoying transfers.
4 – Seamless omnichannel navigation
AI awareness of a customer’s account history isn’t limited to call center contacts either. AI can put together a full picture of a customer’s interactions with a company, including both online and personal touches, and potentially even their social media interactions.
So, for example, if a customer asks a question on the website and then calls in, the AI will be aware of this and take it into account. The customer gets a smoother experience, and doesn’t have to re-enter the same information over and over.
5 – Self-serve portals
The cheapest customer service call is the call that doesn’t happen.
AI can be used to create self-service portals that allow customers to resolve issues for themselves. This can range from giving them gated access to the KB to look up technical solutions, to being able to do minor account maintenance such as updating their phone number.
Customers love self-service options, and you’ll save money every time they use the AI rather than calling in.
6 – Tailored services and offers
Customers often say they don’t like upsells, but we know they still buy anyway. What they don’t like are upsells which don’t relate to them.
AI can assist with sales and upsells through its contextual awareness. Rather than agents blindly making offers based on a script, the AI can suggest products or services that would be genuinely appealing to a customer. This can increase upsell rates, without angering customers.
7 – Accurate staffing levels
AI can even improve call center management. Robust data analysis and reporting will give you deeper insights into your contact center operations than ever before. This leads to better predictions of future call volume, and more precise staffing levels.
Your customers won’t sit on hold for as long, while you don’t waste money having a lot of agents sitting around waiting for calls.
Why Do You Need A Well-Structured AI Knowledge Base?
When looking into AI for your knowledge base, it’s important to remember that current LLM-style AI is not truly intelligent. It’s basically a statistical analysis and prediction engine, and it is only as ‘smart’ as the data it’s fed.
So before you implement AI, you need to clean up your KB. This means:
- Centralizing as much organizational knowledge as possible, including unusual sources such as email chains.
- Reviewing and vetting current articles for accuracy.
- Implementing a heirarchical ‘tree’ structure for easier categorizating and navigation.
- Deploying robust tags and other meta-data to help the AI parse the contents of each article.
- Having time-based policies that flag articles for review if they’re old enough to potentially be out of date.
Perhaps the most important element to focus on is eliminating contradictions in the knowledge set. If one KB article says A and another article says Not-A, this will confuse the AI and lead to inconsistent answers. The more consistent your KB is to begin with, the more reliable the AI’s responses will be.
How Do You Optimize an AI Knowledge Base for Maximum Effectiveness Over Time?
An AI-powered customer service knowledge base has the potential to become ‘smarter’ and more capable over time. So AI should not be treated as a “fire and forget” solution. The best AI implementations include policies and human oversight that encourage consistent improvement over time.
This includes:
- Always keeping humans in the loop. One or more people – including Subject Matter Experts (SMEs) should be primarily assigned to overseeing the AI, monitoring its usage, and intervening if unwanted behaviors emerge.
- Integrating CS agent feedback systems. Agents need a clear way to report issues and suggestions they have for the AI system, so that real-world usage influences its development.
- Periodically reviewing the KB. Once implemented, AI can help oversee the KB and watch for problems, but you still need SMEs to occasionally review articles directly.
- Constantly monitoring KPIs. You should have some key metrics you’re tracking, such as AHT, FCR, and CustSat. Numbers should trend better over time, and any time they reverse course, take it seriously.
Along with improving performance over time, these procedures will also make it easier to calculate the ROI of your knowledge base investment and see just how much you’re saving.
In Conclusion: A Better KB Means Better CX
A company today simply cannot afford to alienate its customers with poor customer service. There are too many alternatives in a global marketplace, and buyers will move to another provider if they have poor experiences with CS. The costs from losing customers due to poor CX can be enormous, and yet is largely avoidable.
An AI-enhanced knowledge base empowers your CS agents and managers to run a better, tighter, more efficient call center that also improves CX at the same time. It’s a true win-win scenario for your and your customers.
KMS Lighthouse can be your partners in building a better knowledge base! Our cutting-edge AI-powered knowledge management system is already trusted by companies around the world, including major financial, telcom, insurance, and hospitality providers. They’ve seen what KMS Lighthouse can do, and you can receive the same benefits.
Contact us to learn more about AI knowledge base systems, or schedule a free demonstration.
