How AI Is Transforming Customer Service in 2025

• What is AI in customer service?
• The benefits of AI in customer service
• 8 ways AI is used in customer service
• Considerations when implementing AI in customer service
• 3 things to consider when implementing AI in customer service
• Is AI replacing customer service?
• The future of AI in customer service
• How to get started with AI in customer service

If you asked any customer service professional to describe the past few years, they’d likely use the terms ‘intense’ and ‘unpredictable’. The rapid rise and adoption of AI-driven tools, software, and platforms are transforming the customer experience across all businesses, regardless of industry or sector.

And while customer service representatives ride the rollercoaster, customer expectations are higher than ever. Forty-three per cent of consumers say they’d abandon a brand due to poor customer service, even if they were previously a loyal customer.

All organisations know that good customer service is the bedrock of a business. It takes a long time to get it right, and moments to undo. So – how can AI help businesses achieve their customer service goals?

To better understand the use of AI in customer service, we surveyed more than 16,000 consumers about their expectations and trust in the age of AI and compiled the results in our State of the AI Connected Customer report.

In this article, we’ll take a close look at the digital transformation AI is having on customer service within businesses, including the benefits and ways it’s being used. We’ll also touch upon where we believe things are heading, and whether the notion that AI is a credible threat to customer service jobs is valid.

In a customer service context, artificial intelligence (AI) is the use of AI-driven tools to automate and replicate areas of the customer service experience (such as support assistance and product or service recommendations) while emulating a personalised, human-centric customer journey.

The goal is to save businesses time and money by making their customer service operations more streamlined and reliable, while costing less, thanks to AI. And it’s clear that many businesses have already adopted this approach, with 83% of decision-makers expecting investment in AI to increase over the next year.

There are new and innovative AI applications being developed every day, with many now becoming mainstream features within business operations. Some of the most notable include:

• Virtual assistants: Virtual assistants help users to manage schedules, take notes during video calls, summarise calls, control smart devices, and streamline operations in general. They’re highly effective at making day-to-day manual tasks more efficient.
• AI-powered chatbots: Many businesses use AI-powered chatbots to understand and respond to customer enquiries in real-time. This resolves issues around the clock and frees up your team to focus on more complex issues that require critical thinking and empathy.
• Generative AI: In terms of content marketing, generative AI is a type of artificial intelligence that creates new content such as text, images, videos, or music by learning patterns from existing, available data.
• Conversational AI: This is a technology that can mimic human conversation. Conversational AI can recognise text and speech inputs and reply using either verbal or written responses.

How can AI help customer success? Increased productivity, improved personalisation, and quicker response times – that’s how AI improves the customer experience in a nutshell.

Let’s delve a little deeper and look at six ways AI in customer service can help your team, especially if you’re interested in getting started with generative AI.

1. Higher productivity: An AI tool like Agentforce can empower service teams to get work done faster. For example, AI can act as an assistant built directly into an agent’s flow of work. In fact, recent research shows that 84% of IT leaders believe AI will help their organisation better serve customers. Case in point: AI-based conversational assistants can increase productivity by 14% for support agents.
2. Better efficiency: Manual processes can be a heavy lift for service agents. A condensed, customer relationship management (CRM) system can integrate all the many operations and processes a business has into a single system. Our research found that 63% of service professionals say AI will help them provide faster resolutions to their customers.
3. A more personalised service interaction: AI can be used to analyse customer behavioural data, buying habits, and overall company engagement, to create a more personalised customer journey.
4. Optimised operations: AI in customer service makes customer service operations more efficient. When used in tandem with generative AI, it can be used to quickly create detailed knowledge articles to further increase optimisation to blueprint how to handle repeated customer queries, which can be shared with customers via AI chatbots.
5. Less employee burnout: AI allows agents to eliminate repetitive, time-consuming work and focus on situations that require creative problem solving, social intelligence, and complex critical thinking — activities that will move the needle on overall customer experience. It’s not a surprise that 79% of IT leaders say generative AI will help reduce team workload and thereby reduce burnout.
6. A proactive service experience: AI can dive into customer histories to determine the most optimal, tailored outcomes.

One NZ, a leading telecommunications provider, is a good example of a business that has harnessed the benefits of AI to improve their customer service.

- Jason Paris, Chief Executive Officer, One NZ

They tapped into the power of Agentforce to integrate their different data stacks, marketing systems, and deployment tools into a single streamlined system, resulting in faster response times and an intelligent AI customer experience.

How Agentforce and Data Cloud Are Helping One NZ Scale | Salesforce

The scope of AI applications within a business and customer service context is continuing to expand as AI becomes more refined. Here are eight examples of how businesses are using AI for their customer service.

• Conversational AI and virtual assistants
• Generative content
• Case routing and prioritisation
• Sentiment analysis and customer emotion detection
• Personalisation and next base action
• Predictive analytics and churn prevention
• Automated summarisation and note taking
• Knowledge management and recommendations

Customer service chatbots and AI assistants are a main feature on most business websites now. They’ll sit in the corner and be on hand to assist a customer in an instant. They often act as the first point of call for virtual assistants to engage with agentic AI to help solve a customer issue.

The biggest benefit of this type of AI customer support live chat, as opposed to a human responder, is that they are available 24/7. Successful brands like Fisher & Paykel use Salesforce’s Agentforce to power this always-on support. Through implementing an AI live chat, they cut call times in half and are now able to resolve up to 65% of issues without needing human intervention.

Fisher & Paykel Builds Lasting Customer Relationships With Salesforce | Dreamforce 2024 | Salesforce

Generative AI is increasingly being adopted by businesses across the world. In another of our in-depth research surveys, the State of IT AI and App Development Report, 85% of IT leaders are already, or expect to be using generative AI in the next two years.

It’s not just content for the purposes of marketing where generative AI will likely be utilised. Drafting customer emails, generating internal knowledge bases, and meeting summarisations are all additional uses of this powerful form of AI.

While there are many valid concerns regarding its use, there’s no doubt that generative AI is revolutionising the customer experience.

We’ve taken proactive steps to safeguard our customers who use our generative-AI tools with our Einstein trust layer. By requesting content prompts through Einstein, we guarantee the results generated will have passed through a rigorous set of trust and accuracy checks, as well as ensuring your data is safeguarded at all times.

It’s easy to fall into the trap of simply addressing customer queries in the order that they come in. In some ways, this is the fairest way of doing things, but it’s not always the most optimal.

There are now AI tools available that can triage and prioritise cases based on metrics such as urgency and sentiment. It makes it far more likely that cases of a time-sensitive nature (like customer complaints or deadline-specific queries) are dealt with swiftly and accurately, reducing the risk of escalation.

Businesses can also use intelligent case routing to analyse incoming customer inquiries and route them to the service representative or department with the most relevant experience or knowledge.

Customer sentiment is a great indicator for businesses to determine how well their customer service is being received. With AI, businesses can quickly gather aspects such as customer reviews, feedback forms, and social media mentions, and combine them into a metric that will let them know how they’re doing.

Additionally, for interactions involving telephone or video calls, businesses can deploy emotion detectors to help analyse customer sentiment and gauge a customer’s true feelings regarding an interaction. Voice pattern recognition can help operators quickly gain control of a situation to potentially diffuse things before they escalate.

Personalised experiences are becoming a key contributor towards excellent customer service, and businesses seem to be responding. According to our research, 73% of customers now believe that companies treat them as an individual rather than a number.

AI has given businesses the tools to achieve this. Product recommendations based on a customer’s search history and tailored customer service solutions to interactions are good examples of how personalisation is being deployed. This often leads to an increase in customer loyalty and impressive customer satisfaction scores (CSATs).

This is a feature that we’ve incorporated into our Marketing Cloud software. We prioritise customer satisfaction and provide our customers with vital analytics to maintain progress at all times.

AI isn’t just helping customer service when things are going well. It’s also being used to help rectify situations when things are a little less smooth.

If a business does have to make a difficult decision, such as a price hike, or if they get caught up in a negative news story, businesses can use AI to predict which issues could escalate and lead to increased churn. This helps companies proactively address customer concerns, optimise resource allocation, and personalise customer interactions.

With our Service Cloud application, businesses have a dedicated incident management system that detects potential incidents before they can become a problem. This allows service reps to offer a tailored resolution before escalation becomes a risk.

AI can now effectively listen in on sales and video calls and take summative notes to present once the interaction has ended. Without having to worry about note-taking, operators are free to fully concentrate on the call.

As part of our Einstein software package, our customers can use Conversation Insights to flag key moments in every call, add in important keywords that might crop up in conversations, and compare customer signals that might have frequently appeared.

AI-powered self-service solutions, such as knowledge bases or FAQs, leverage natural language processing to understand customer queries and provide relevant information or troubleshooting steps. This allows customers and agents to find answers quickly without requiring human interaction.

We’re travelling through a delicate time when it comes to the use of AI in customer service. While the benefits are undeniable, trust in AI, which is vital to its acceptance, is low. Forty-two per cent of customers trust businesses to use AI ethically , down from 58% in 2023.

Areas of particular concern that businesses have to address include how data is used and whether the AI still has a human connection. Seventy-three per cent of consumers want to know if they’re talking to an AI , so businesses need to make sure that transparency is one of the primary drivers behind their AI practices.

This transparency involves letting customers learn more about things such as the intended purpose of the AI, how the AI they are using works, how data is being used, and the security protocols in place.

It’s not surprising that businesses want to incorporate AI into their operations in some way. However, regardless of whether you just need it for one or two functions or you’re looking to rebuild your entire business infrastructure with agentic AI, there are certain considerations to be aware of.

People have valid concerns that AI could take over their jobs , and this concern isn’t unfounded. Australia’s Social Policy Group says the structural shifts will be “tectonic”. Their prediction modelling “finds that over the next five years, Australia will face significant layoffs across most sectors of our economy. If the adoption of AI maintains its current pace, a third (33.18 percent) of the workforce could experience a period of unemployment by 2030. In the event of a slowdown in the adoption of AI this figure could reduce to 1 in 5 working adults facing job loss (21.82 percent).”

This, understandably, makes people apprehensive about embracing the new technology.

As you bring AI into your organisation, communicate how AI will help your customer service teams achieve more. As part of your training, offer reassurance that their human skills are very much still needed for success.

AI is – right now – predicted to enhance human customer service agents, rather than replace them, although this relies on businesses following responsible AI practices. The reason behind this prediction is centred around two key points:

1. At the moment, AI struggles to comprehend and address complex queries. It is limited in its ability to solve problems and think critically. However, as the technology advances, this is likely to improve.
2. AI can’t replicate emotional intelligence (EI). Humans have empathy. They feel loyalty and connection, and they can use their emotions and creativity to solve problems. No matter the evolution of AI, it will never be able to have a human experience.

The concern that AI might replace human customer service is a grave one felt by both customer service agents and consumers, and it’s a concern that organisations should keep front of mind as they explore AI tools.

We’re well into the establishment of AI as a permanent fixture across all business fields and sectors. And while it’s impossible to know exactly what the future holds, there are certain predictions that are more likely than others to transpire.

In our State of the AI Connected Customer report, we highlight that nearly half of customers expect AI to match human cognitive capabilities within the next decade. And with this rapid increase of potential, the principles behind ethical AI, such as trust and transparency, will need to be enforced more firmly than ever before.

Hyper-personalisation of the customer experience, more nuanced sentiment recognition, and advanced AI automation are all likely to play a pivotal role in the future of AI customer service.

AI in customer service doesn’t have to be difficult to understand or implement. The best way to begin is by understanding how it can support your team and scale your operations.

To help, we’ve created the practical ebook, Building a Business Case for Service with AI. This resource includes insights from service leaders at Fisher & Paykel and Magentus, along with a ready-to-use business case template to help you secure executive buy-in and prove the value of AI.

Additionally, why not check out our upcoming events, where you’ll find exclusive talks and insights into everything that’s coming up in the AI landscape.