The Impact of AI-Powered Customer Service on Customer Loyalty

The rapid advancement of AI technology has transformed the entire global customer service industry and organizations are increasingly using AI-based solutions such as chatbots, virtual assistants, and automated response technologies in their operations. The shift in technology has opened up doors for businesses to improve quality of service, increase capacity and strength long-lasting client relationships. This research investigates the effects of three critical constructs—AI service quality (AISQ), AI responsiveness (AIR), and customer trust in AI system (CTAI) to affect customer loyalty within the context of AI-driven customer service given its high reliance on AI enabled-service interactions across various sectors. This research describes customer loyalty as a dependent variable while observing AISQ, AIR, and CTAI as respective independent factors. To achieve the criteria for which this research is conducted, an extensive questionnaire was developed through literature available nowadays. Non-probable random sampling approach was used to distribute 350 questionnaire surveys of customers who made a use of AI-based service platforms earlier, and based on the collected completed responses (n = 172). Correlations among the variables and testing of the hypotheses were analyzed by using SPSS 26. All inferences were made at a significance level of 5%. The results show that AISQ, AIR and CTAI have significant effects on customer loyalty. This study investigates numerous theoretical and managerial implications as well as potential opportunities for future research.