“Customer service is make or break for your SaaS business” is not just a trope. We have the receipts: 80% of customers think the experience a company provides is just as important as its products or services.

But maintaining high-quality customer service while managing costs becomes impossible as your business grows and customer inquiries skyrocket. This is especially true in SaaS, where signing up is simple, but the volume of user queries that follow can be overwhelming. Enter automation, an obvious solution to handling more inquiries as you scale your business.

Unfortunately, automation isn’t enough to meet the increasing demands of customers on its own. Automated customer service partnered with generative AI — now that’s another story entirely.

As a Customer Solutions Consultant, I’ve had the incredible opportunity to help SaaS businesses implement and improve their automated customer service strategies. If you’ve been wondering what most high-growth SaaS companies have in common, look no further. You’ll find an automated customer service strategy backed by AI .

In this post, I’ll explore the topic in more depth: automated customer service, how an AI agent is redefining automation in the SaaS industry, and how you can implement it into your SaaS customer service strategy (aka, get with the program).

What is automated customer service?

You might be thinking, "Automated customer service? Isn't that just glorified phone trees and chatbots that make me want to throw my computer out the window?" It depends.

Automated customer service is the use of technology to handle customer inquiries and support tasks, without direct human intervention. It aims to streamline support processes, reduce response times, and improve overall efficiency while maintaining a high level of customer satisfaction.

When it comes to automated customer service, I can confidently say that most of us have had disappointments. You’ve likely had an automated customer service tool, like a chatbot, fail to deliver on its potential .

But AI agents are changing the game.

The Swiss Army Knife of automated customer service: The AI agent

Rather than try to build and maintain scripts for every issue, an AI Agent reasons through a customer problem using knowledge and data from your SaaS tech stack to identify the best step to take. It considers your customer’s persona. Are they a system admin with advanced permissions or a standard user? Are they using mobile on an Android phone or using your web application?

The AI agent can be programmed to recognize these differences and provide custom responses accordingly. They use this and the context of the conversation to determine the best path to resolution, delivering a truly personalized experience.

Think of it this way: an AI agent is like a Swiss Army knife — it’s versatile, efficient, and always ready to help solve a problem.

SaaS users have broad but specific problems to solve, and I know from experience that an AI agent is the only automated customer service solution that can cover all the bases. Here’s why:

• It’s available 24/7: AI agents provide round-the-clock support. This is crucial for SaaS companies with a global customer base.
• It’s scalable: As customer inquiries increase, AI agents can handle a growing volume of requests without a proportional increase in costs.
• It’s consistent: AI agents deliver consistent responses — across channels and languages — to ensure every customer receives the same high-quality support.
• It powers personalization: An AI agent can integrate with your customer data platforms to provide personalized solutions based on customer history and preferences.
• It’s continuously learning: An AI agent is coachable. It centralizes your interaction insights so you can guide it to learn from customer conversations and optimize your customer service over time, providing more accurate and helpful responses to increase Automated Resolution (AR).

Using an AI agent for automated customer service ensures you’re available to customers 24/7, that the conversations are always consistent, and that your automated customer service strategy scales as your business grows.

For SaaS, this means instant self-service, automating more complex tasks like converting users from free to paid plans, and creating effortless onboarding experiences.

Let’s look at these AI agent capabilities in more detail.

A 24/7 automated customer service superhero 

SaaS customers need instant access to self-serve. They need to make account changes when it’s convenient for them. They want to quickly hop in and process a renewal without having to wait to connect with a human agent. And when it comes to converting freemium users to paid, the stakes are high. You don’t want to give people any reason to run to the next solution.

The more difficult it is for customers to self-serve, the more likely you’re sending them straight into the lap of your competition. Empowering customers to resolve inquiries on-demand strengthens customer satisfaction, loyalty, and retention — 67% of customers prefer this over speaking to a company representative.

AI agents can do this while handling a wide range of customer inquiries, making them the perfect fit for SaaS business. From simple FAQs to complex troubleshooting across the platforms your software is serviced, it’s there anytime a customer needs them. Bonus points if the AI agent can do this across channels and languages.

Personalization at scale: Because one size fits none

SaaS companies can have hundreds to thousands to millions of users. The idea of giving all of them personalized experiences might sound overwhelming to us, but to an AI agent, it’s a walk in the park.

An AI agent effortlessly analyzes user data and behavior patterns and tailors these insights into a customer service experience unique to each individual user. It's like having a personal concierge for every customer.

This definitely comes in handy for SaaS users, particularly when it comes to providing tiered support. You can give an AI agent instructions to treat different customer tiers with varied levels of personalized support — from newly onboarded users, to VIP power users of your platform.

An AI agent can also ensure customers have instant access to convert their accounts from “freemium” to paid the exact moment they’re ready to make the switch. From there, product adoption is seamless, with user guides and how-tos at their fingertips — delivered directly from the AI agent.

A tool for retention

The average monthly churn rate for SaaS companies is 3-8% . A seemingly low number, but in actuality, there’s lots of room for improvement.

With the right guidance in place, an AI agent can mitigate cancellations and improve customer retention. Training the AI agent to identify customers that may be at risk of canceling their services is a great way for self-service SaaS platforms to keep customers. They can proactively determine whether the customer is eligible for a discount or updated payment terms and provide them with the option before they exit through the back door.

If you’re a CX leader or AI Manager, reducing churn is not only better for you and your team, it gives CX a bigger seat at the table.

Implementing an AI agent for automated customer service in your SaaS company

Start small

Onboard the AI agent across support channels to automate simple, repetitive tasks before moving on to more complex interactions.

Most of the time, SaaS customers will come to us with the urgent need to handle their most common inquiries. We call these questions “low hanging fruit” because they’re better handled by automation than agents (and they’re easy automation wins).

With an AI agent for automated customer service, you don’t have to waste time manually building out the answers to these FAQs — the AI agent will crawl your knowledge base to surface the content from your support documentation and generate the answers for you, further leveraging the investments you’ve already made.

It’s also essential to think about what metadata we can pass to the AI Agent. If customers are already logged into your platform, the AI Agent is already primed with the information it needs to support them. The AI agent can identify their status in the CX journey and point them towards the right resources to take the next step.

Integrate with existing systems

Ensure your AI agent can access relevant customer data and product information.

In order for the AI agent to start resolving customer inquiries, it needs to be connected with other third-party systems to access and process the information it gathers — like customer data — to trigger actions like processing a renewal or troubleshooting an issue.

Figuring out which third-party systems to connect to, and to what end, is what we call developing an API strategy.

Without this, your AI is only going to be able to provide basic answers. Customers today want automation to take action on their behalf — to perform complex actions like refunding a payment, updating an account, and personalizing the experience. You’ll want to work with AI solutions that allow you to manage the business logic behind how your LLMs use your APIs . The AI agent should know when to connect a customer to a third party software that can help them take action.

Here’s a few questions to ask yourself when developing an API strategy:

• What actions do I want to expose to my customers?
• What is the level of readiness of my APIs that power those actions?
• How can we surface them in a safe and controllable way?

Train your team

Equip your human agents with the skills to work alongside AI, focusing on complex problem-solving and relationship building.

With generative AI helping teams build, launch, and maintain automation faster and with less effort, customer service teams can spend more time on analyzing and optimizing their customer service automation. It also offers employees the chance to advance their careers in customer service, allowing human support agents to engage in more fulfilling work by tackling complex issues where exceptional service truly excels.

Your AI Manager should be involved, if not spearhead, content innovation and audit initiatives. But their scope of ownership will evolve as generative AI is adopted across your organization. To ensure their focus is aligned with your automation strategy, we recommend following these principles:

• Transition from policy and content review to analysis and insights. As your CX strategy matures in its adoption of AI capabilities, ensure your bot manager transitions their time spent in the bot towards data analysis, review, and insights.
• Make your AI Manager the bridge between cross-functional teams. They should work in concert with content, product, analytics, revenue, and any other relevant teams to stay aligned, delivering business insights from the most important source of feedback – your customers.
• Position your AI Manager as a trailblazer. This is an excellent opportunity to shine a light on your in-house customer service expert. Your AI Manager will have a unique and powerful understanding of the performance of the business through the customer’s lens.

Continuously monitor and improve

Regularly analyze the performance of your AI agent and make adjustments based on customer feedback.

To maximize the impact of your AI and increase Automated Resolution (AR), it's crucial to create a center of excellence that focuses on continually improving your AI strategy. Over time, you’ll want to progress from simply measuring resolution to improving it.

An AI agent gives you faster, and more accurate, insight into how you can do this — pulling in information from multiple data sources to give you an overview of your customer data without duplicating effort or maintenance.

It can also create new answers to unforeseen questions dynamically — with no manual training. It gives you a smarter, more humanistic, and more resourceful AI agent with less effort to build and maintain.

The future is automated (and it's awesome)

Automated customer service, particularly through AI agents, is becoming a critical differentiator for high-growth SaaS companies. If you're a SaaS company looking to turbocharge your growth, it's time to embrace it. Your customers (and your bottom line) will thank you.

By leveraging this technology effectively, SaaS businesses can provide superior customer experiences, scale their support operations efficiently, and gain a competitive edge in the market.

Going from email auto-responders to an AI agent capable of handling all your customer inquiries didn’t happen in a day, but it was worth the wait. With AI in your arsenal, you can finally live up to the high expectations of automated customer service.