Customer expectations have steadily increased since the COVID-19 global pandemic. The pandemic proved that businesses, especially eCommerce platforms, could provide customers with a highly personalised customer experience without dramatically increasing headcount.
CRMs like Dynamics 365 and CDPs harvested data and allowed businesses to provide customers with greater value at a time when competition online was at an all-time high. Powered by AI, CRMs allowed businesses to do far more than let a customer know their order was on the way.
Although life returned to normal, customer expectations did not and businesses are under pressure to meet, if not exceed, those expectations and engage with them in a more personalised way.
Artificial intelligence (AI) represents an opportunity for businesses to drive their customer engagement. By simplifying processes, offering actionable insights, and enabling personalised interactions, AI allows marketing teams, especially small teams, to do more for their audiences. For organisations using platforms like Microsoft Dynamics 365, AI-driven tools such as Copilot offer new possibilities for enhancing the customer experience.
Some businesses have been reluctant to adopt AI in any meaningful way with legitimate concerns giving them pause. Whether AI proves to be a boon or a curse, for now, it is still one of the most powerful ways to create a more personalised customer experience, allowing the team to take on other tasks.
The Role of AI in Customer Engagement
Artificial intelligence has become a cornerstone of modern customer engagement strategy, supporting business in two key areas: administration and execution. With customer expectations so high, it’s no longer enough to react to customer needs, businesses must anticipate them.
Equally, the level of intervention required to produce the customer experience demanded is prohibitive.
AI enables organisations to deliver proactive, personalised, and seamless interactions that meet customer expectations and, over time, foster loyalty.
At its core, AI analyses data and identifies patterns in moments, providing valuable, actionable insights. Powerful CRMs, like Dynamics 365, can consolidate data from various customer touchpoints such as email, phone calls, website visits, and more. Using those data points it can create a unified customer profile. This consolidated view allows businesses to understand customer behaviour better and tailor their engagement strategies accordingly.
AI allows you to enhance customer engagement at scale. Personalisation that might previously have required hours of manual analysis takes moments. This enables businesses to provide high-quality, consistent interactions across a growing customer base without overburdening teams already in place.
Additionally, AI can improve the efficiency of internal processes, ensuring teams are more responsive and better equipped to meet customer needs. For example:
- Customer Prioritisation: AI can identify high-value customers or urgent issues, escalating them before they become unmanageable or the customer becomes too frustrated.
- Trend Identification: By analysing customer feedback in real-time, AI can uncover emerging trends which can help businesses take advantage of opportunities or adapt before a negative trend becomes a threat.
- Employee Assistance: Tools like Copilot offer real-time guidance to employees, such as suggesting answers during customer interactions or automating follow-up tasks.
AI is a force multiplier for your team’s capabilities, enabling them to focus on building meaningful relationships while the technology handles the heavy lifting.
How AI Streamlines Processes
CRMs like Dynamics 365, augmented by AI simplify customer engagement in several ways, making interactions more seamless and efficient. While streamlining can be viewed a threat to someone’s role within a business, it allows those individuals to do more, faster. It also frees them from mundane tasks to focus on where they can deliver the most value for the customer and to the business.
In an ideal world, it should free up time to allow for personal development as well.
- Analysing Customer Communications
AI can process and analyse customer interactions across multiple channels, such as email, chat, and social media. With Dynamics 365, AI-driven analytics uncover patterns and sentiment in customer communications, offering insights into how customers feel and what they need.
AI can identify recurring complaints or frequently asked questions, allowing businesses to address these proactively. This improves customer satisfaction and reduces the workload on customer service teams.
- Automating Responses
AI can generate preset responses to common queries, reducing the time spent on repetitive tasks. Dynamics 365 Copilot goes a step further by crafting dynamic, context-aware responses. When correctly integrated, Copilot can answer questions about products or provide customers with an update on delivery times.
These tasks are usually handled by a member of the team via email. It’s time-consuming work and provides a frustrating experience for the customer who wants a quick answer to a simple question. - Enhanced Decision-Making
With its ability to process vast amounts of data, AI helps businesses make informed decisions. Dynamics 365 leverages AI to provide actionable recommendations, such as identifying upselling opportunities or suggesting ways to resolve customer issues. This data-driven approach ensures that decisions align with customer needs and business objectives.
The Power of Copilot in Dynamics 365
Microsoft’s Copilot integrates directly into Dynamics 365 giving users a suite of tools designed to enhance customer engagement and streamline processes. Having this functionality native to the platform gives users a competitive edge, both in terms of functionality and compatibility with the CRM. Notable functionality includes:
- Chatbot Capabilities
Copilot can be programmed as a chatbot to handle customer queries 24/7. Copilot can be customised to reference specific resources to inform its answers as well as preprogrammed with set responses to specific questions. By pointing Copilot at specific internal resources, you can ensure it provides accurate answers to your customers’ questions.
- Personalised Customer Journeys
With access to customer data in Dynamics 365, Copilot enables businesses to create highly personalised interactions. It can suggest the next best action based on customer history or recommend content tailored to individual preferences, driving better engagement and loyalty. - Advanced Resource Management
Copilot can pull information from a variety of sources, whether internal databases, specific web pages, or even the broader internet, to answer queries. This ensures that customers always receive accurate and up-to-date information, regardless of the complexity of their question.
Practical Applications of AI in Dynamics 365
As AI is part of Dynamics 365, users can take full advantage of it to help them run their businesses more effectively. By streamlining and speeding up tasks or processes that would otherwise require hours of manual intervention businesses can operate more efficiently, and more profitably.
- Proactive Customer Support
AI tools in Dynamics 365 can predict potential issues before they arise. For instance, AI can flag delays in delivery schedules or identify customers at risk of churn based on historical data. This allows businesses to take proactive measures to address concerns, enhancing customer trust and loyalty.
- Real-Time Insights
AI-powered dashboards in Dynamics 365 provide real-time insights into customer interactions, enabling businesses to respond promptly and effectively. For example, managers can track response times and satisfaction rates, ensuring customer service teams meet performance benchmarks. - Automated Campaign Management
For marketing teams, AI simplifies campaign planning and execution. Dynamics 365 uses AI to segment audiences, optimise messaging, and schedule communications at the best times for maximum impact. This level of precision drives engagement and improves ROI. - Intelligent Sales Assistance
Dynamics 365 Copilot can assist with lead scoring, identify cross-sell and upsell opportunities, and even draft personalised follow-up emails. This ensures sales teams focus on high-priority tasks while AI handles the heavy lifting.
Concerns Around AI in Customer Engagement
Despite its benefits, some businesses hesitate to adopt AI due to concerns about cost, complexity, or the fear of losing the ‘human touch’. However, tools like Dynamics 365 Copilot work alongside human teams, not replace them. The intention is to provide teams with greater bandwidth by letting the technology handle the low-level or mundane tasks.
- Cost and Implementation Challenges
Some perceive adopting AI technologies as expensive and resource-intensive. Businesses may worry about the initial investment required for software, training, and system integration. Additionally, the implementation process might disrupt existing workflows, causing temporary inefficiencies. However, this is mitigated with the right planning and support, and the long-term ROI often outweighs the upfront costs. Native solutions like Copilot make integration much less of a concern.
- Data Privacy and Security
AI thrives on data, which raises concerns about how it collects customer information, stores, and uses it. Businesses must adhere to data privacy regulations like GDPR and maintain robust security protocols to prevent breaches. Transparency about data usage can help alleviate customer concerns and build trust. - Over-reliance on Automation
While automation can streamline processes, over-relying on AI for customer interactions may result in impersonal experiences. Customers still value genuine human connections, especially for complex or sensitive issues. Striking the right balance between automation and human intervention is key to maintaining strong relationships. - Bias in AI Decision-Making
AI systems learn from the data provided, which means they can inadvertently inherit biases present in historical datasets. This could lead to unfair or inaccurate decisions, negatively impacting customer satisfaction and brand reputation. Regular audits and careful training of AI systems can help mitigate these risks. - Resistance to Change
Both employees and customers may resist the introduction of AI, fearing it could lead to job losses or depersonalised service. Clear communication about the purpose of AI, as a productivity multiplier, not a replacement is important. Buy-in from company leadership and robust training for employees can ease this transition and foster acceptance.
The Future of AI in Customer Engagement
The potential of AI in customer engagement is still in its early stages, and the future promises even greater possibilities. As technologies like Dynamics 365 Copilot continue to evolve, businesses can expect AI to play an even more integral role in their customer strategies.
- Hyper-Personalisation
AI is already helping businesses personalise customer interactions, but as the technology progresses how the AI leverages the data will become more efficient and its responses will be more authentic. There is a downside; removing humans from customer interaction can create distance between the business and their customers. However, with appropriate triaging and reporting (which the AI will get better at too), team members can still have customer contact when required.
- Voice and Sentiment Analysis
Future AI tools will integrate more advanced capabilities like voice and sentiment analysis. We’re all familiar with assistants like Syri and Alexa who we can speak to, and they respond with answers to our questions.
The technology behind them is improving at an impressive rate. Aside from understanding a wider range of questions, the AI will be able to analyse the voice and understand tone and sentiment. This would allow AI to triage calls and either adjust responses or provide customer service teams with notes about the customer’s stress/agitation levels to help them manage the situation more effectively. - End-to-End Automation
From initial inquiries to post-purchase support, AI will streamline the entire customer journey. The first two points feed directly into this. The more data the AI can access and understand the more useful it can become. Handling post-purchase support can be an effective way of dealing with teething problems and gauging customer satisfaction while keeping the team productive. The AI can be trained to escalate issues if an answer isn’t immediately available, preventing frustration on the part of the customer.
AI, when used correctly, can help businesses engage with their customers more often and more efficiently. It can help users to glean valuable insights from the CRM to make customer interactions more rewarding. It can also lighten the load so customer success teams can focus more on the success side of their role and less on the brush fires that can break out. With Dynamics 365, organisations can streamline processes, provide deeper insights, and deliver personalised experiences that build trust and long-term loyalty.
If your business is ready to take customer engagement to the next level, now is the time to embrace AI.
Learn more about how you can combine CRM and AI to drive customer engagement.
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