Building an AI Chatbot for Customer Success

Earlier this year, Klarna launched an AI customer service assistant using OpenAI, which engaged in 2.3 million conversations within a month, reducing repeated inquiries by 25% and projecting a $40 million profit improvement for 2024. AI chatbots are ideal for handling straightforward customer interactions, with human fallback for complex issues. Companies face choices between proprietary AI models, like OpenAI, and cost-effective open-source options like Llama 3, depending on their technical capabilities. Klarna's approach involved fine-tuning an OpenAI model with company-specific data for accurate, branded responses and integrating retrieval-augmented generation (RAG) to draw on a knowledge base for precise information. The guide details building a chatbot using tools like Next.js, Stream Chat, Pinecone, and OpenAI, emphasizing the importance of carefully crafted prompts, managing AI hallucinations, protecting personal information, and maintaining appropriate tone. It also highlights the need for human escalation when AI encounters complex, sensitive, or emotionally charged issues, ensuring a balanced customer support strategy.