AI in customer service refers to the use of intelligent AI models that can understand customer needs, answer questions, and resolve routine issues automatically. These models can also learn from past customer interactions and change their responses accordingly.
Do you know why most businesses lose customers? It’s not because their product is weak. Instead, their customer service is poor! Studies show that about 96% of customers will leave your business for “bad service”.
But companies have found a solution! In 2025, advanced AI technologies, such as Generative AI, Agentic AI, Conversational AI, and more, are helping both small and large businesses to offer customer support that is both fast and human-like.
Want to learn how? Read this article till the end to see the six latest ways AI is getting used in customer service in 2025.
What is AI in Customer Service?
AI in customer service refers to the use of artificial intelligence technologies in the customer support department. Initially, it offered basic automation services to businesses, such as:
- Answering customer questions
- Order tracking
- Sharing delivery updates, and more
However, in 2025, AI goes beyond chatbots and basic automation. It can now understand:
- Customer intent
- Detect emotions
- Remember past interactions
- Act proactively
Moreover, some advanced AI models can even independently assist human agents in real time and deliver hyper-personalized experiences. These systems not only minimize resolution times but also reduce customer churn.
That’s why several D2C companies and consumer brands earning $5M+ revenue are now using advanced automated support in their businesses. Studies show that in 2025, about 56% of business owners are using AI for customer service tasks.
6 Latest Ways Businesses Are Using AI in Customer Service in 2025!
Did you know? About 90% of CX leaders say using AI tools has a positive ROI for their agents. Furthermore, about 75% of CX leaders expect that 80% of interactions will be resolved without a human agent in the next few years.
But how? Has AI become that strong? The short answer is YES! To believe more, check out these six ways how AI is now getting used in business organizations in 2025:
1. Customer Support That Thinks Ahead
In 2025, customer support is not limited to only waiting for problems and then solving them. Modern AI tools go beyond basic chatbots or FAQ pages. They can understand the real intention of a customer through natural language processing (NLP).
This allows them to perform sentiment analysis to pick up emotions and improve the quality of the generated responses.
Furthermore, AI in customer service connects directly with your CRM platforms, which hold customer history. This allows businesses to:
- Offer personalized help
- Solve issues before customers even raise them (proactive approach)
- Recommend the right solutions at the right moment
The result? Fewer frustrated customers + lower chances of losing them to a competitor = More repeat business.
2. AI Agents Now Work Like Independent Team Members
“Agentic AI” is a new form of artificial intelligence. These models can act on their own, without waiting for step-by-step instructions. Unlike older chatbots that follow scripts, these AI agents can:
- Understand a customer’s request
- Decide what actions are needed
- Then complete those actions across different systems.
For example, say a customer has a billing issue. Now, the AI can check the account, find errors, resolve them, and send an update.
Moreover, these agents can also manage tasks like:
- Scheduling
- Technical support
- Account changes
By handling these repetitive or complex workflows, they free up your human staff to focus on issues that require judgment or empathy. A latest E&Y survey found that nowadays about 43% of enterprises allocate more than half of their AI budgets to agentic solutions. Moreover, about 69% of executives said their company is adopting Agentic AI to stay competitive.
3. AI Makes Intelligent Conversations That Feel Like Human
Besides, Agentic AI, there is another popular AI technology called “Conversational AI”, This technology is powered by generative AI and makes customer interactions more natural and personalized. It does so by considering:
- Real intent
- Customer emotions
- Past conversations
- Real-time details like recent purchases or account activity.
Okay, but does this model offer any measurable business value? Yes, an IBM study found that companies using conversational AI report a 23.5% lower cost per contact and a 4% rise in annual revenue (on average).
4. AI Models Automatically Update Your Self-Service Options
“AI-powered self-service” is another latest technology that gives customers real-time and personalized help. These systems study interactions across calls, emails, and social media to spot new problems or missing information.
Generative AI then uses this knowledge (along with company guidelines) to automatically create or update responses. This keeps your self-help knowledge base current without constant human effort.
A popular example here is “ Redi”, which is an AI assistant from Virgin Money. Since launch, Redi has handled over 2 million customer interactions and achieved 94% satisfaction among surveyed users.
5. Generative AI is Being Used as an “Agent Co-Pilot”
In 2025, several D2C companies and consumer brands operating in multiple regions like the US, UK, and Australia are using generative AI as co-pilots to serve their customers.
Instead of replacing people, it works alongside them by giving instant access to:
- Customer history
- Knowledge bases
- Suggested solutions during conversations
After the call or chat, AI also summarizes the discussion and reminds teams about pending follow-ups. This reduces the manual work that often causes stress and errors.
Furthermore, AI also supports agents in complex or sensitive situations. It analyzes a customer’s mood and provides real-time suggestions to your staff so that they can respond with the right tone and context. According to an IBM Institute for Business Value study, companies using mature AI saw a 15% higher satisfaction score among human agents.
6. Service That Feels Built Just for Each Customer!
“Hyper-personalization” is the next stage of AI in customer service. In this technique, AI adapts support to each individual in real time! It does not rely only on past data. Instead, these systems adjust tone and messages based on a customer’s current behavior, mood, and situation. For example,
- An AI studies the browsing patterns and recent activities of a customer.
- It notes their preferences and then offers the best recommendations or messages at the right moment.
In 2025, this approach is gaining traction! Nowadays, about 66% of customer service managers are using generative AI to increase personalization. The result? Your customers feel noticed and valued due to such AI-powered CX, which leads to repeat business.
But Still, a Human + AI Partnership is the Best Approach in 2025!
Despite the technological advancement, human connection is what your customers crave. Studies show that about 52% of customers still prefer human agents for empathetic support, and 88.8% think companies should always offer an option to speak with a human.
Thus, in 2025, AI + humans is the best teamwork! AI tools can work alongside your staff as a real-time partner. Conversational AI can help your agents by:
- Suggesting replies
- Summarizing customer history
- Tracking follow-ups
Whereas, Agentic AI can take care of routine tasks like billing adjustments or account updates.
In this teamwork, AI can handle repetitive or technical tasks while your human agents focus on problems that require empathy, judgment, or creativity.
Finding it Tough? Get the Perfect AI-Human Balance with Atidiv!
In 2025, 78% of organizations are already using AI in at least one business function. Among these, customer service stands out as one of the most popular applications! Studies show that the AI customer service market is projected to reach $47.82 billion by 2030.
But why such a craze? That’s largely because modern and advanced AI tools are helping companies in the following ways:
- AI models offer proactive support that predicts customer needs
- Agentic AI agents solve tasks independently
- AI-powered self-service tools keep answers updated
- Conversational AI adapts to tone and context
- Generative AI copilots assist human agents in real time
But don’t get carried away! Despite these advancements, customers still value human interaction. Thus, the most effective approach is AI + human partnership.
If creating this balance feels challenging, you can outsource 100% of your support to Atidiv. We are a leading digital customer experience solutions provider with 15+ years of expertise across 20+ industries. Our expert team delivers multiple customer support services, such as:
- AI voice support
- Inbound and outbound call center services
- Email support services
- Social media support
- Voice telco services, and more.
Book a consultation today to see how we can support your business!
AI in Customer Service FAQs
1. Is using AI in customer service too expensive for small businesses?
No! Nowadays, many AI tools offer “tiered pricing”, which increases as per business volumes. Initially, you can pick their starter or basic plans and later switch to higher options as your business scales. This makes using AI in customer service affordable for growing D2C companies/ consumer brands.
2. How is AI in customer service different in 2025 compared to earlier years?
In 2025, AI has become more intelligent and proactive. Now, it doesn’t just answer questions! Instead, it can:
- Predicts needs
- Adapts to emotions
- Learns from past interactions
Besides answering intelligently to customers, advanced AI models also respect the AI + human partnership. They can detect customer frustration and route such customers directly to a human. Such an automated support improves CX and reduces churn.
3. I don’t have technical knowledge. Can I still use AI tools?
Yes! Most AI customer service platforms are built for non-technical users. They have:
- Simple dashboards
- Jargon-free navigation labels
- Easy installations and setups
However, you may need to hire specialized staff to run them better and accurately interpret their insights. If you find it tough, consider outsourcing customer support to leading agencies, like Atidiv. Our expert team can manage everything for you without any added stress.
4. What’s the difference between Conversational AI and Agentic AI in customer service?
Conversational AI is built to communicate naturally with customers as your human agents would do. It adapts to understand customer intent and accordingly adapts its tone during live conversations. Whereas, Agentic AI goes further! It not only chats but also takes action.
For example,
- Say a customer has a billing issue.
- Now, Conversational AI can listen to the customer and identify the problem.
- Next, it can explain the steps available and reassure the customer.
- In contrast, Agentic AI can actually check the account.
- It can resolve the error (with minimal human input) and give an update.