Why Use AI Copilots in SaaS? How AI Copilots Improve Software

This guide explains why experts are using AI copilots to reduce churn and make users more efficient in SaaS.

·6 minute read
Cover for Why Use AI Copilots in SaaS? How AI Copilots Improve Software

AI copilots are software systems that help users operate software more efficiently. Powered by recent developments in artificial intelligence, specifically large language models (LLMs), these systems can interpret user input (in the form of text or voice) and perform tasks on behalf of the user or provide suggestions to help the user complete tasks more quickly.

An example of an AI copilot

Why Use AI Copilots in SaaS?

Any software as a service (SaaS) company faces the same challenge: retaining users. This can be framed as increasing retention or reducing churn, but the concept is the same: the longer users stay with your software, the faster your business grows.

A second, related challenge is customer acquisition. The more attractive your software is to new users, as perceived through your marketing materials and website, the more likely they are to sign up.

AI copilots help with both of these challenges, and some others. Here's how AI copilots can improve your SaaS product:

  1. AI copilots create more magic moments
  2. AI copilots increase user efficiency
  3. AI copilots are attractive features
  4. AI copilots reduce support costs
  5. AI copilots provide invaluable data for improving your product

AI Copilots Create More Magic Moments

A "magic moment" is a term used in product management to describe a specific moment in a which a new user fully realizes the value of the product. This generally comes from the user leveraging a feature to solve the core problem that drove them to the product in the first place.

AI copilots get users to magic moments faster by exposing a new input method that lets the user get a solution immediately. Rather than having to learn how to use your software by reading tutorials, going through an onboarding experience, and clicking around, they can just explain the problem to their copilot and see the copilot solve it for them.

Magic moments aren't limited to new users, though. In fact, users can experience them all the time. Active users who regularly experience magic moments due to mastery of a product are generally referred to as power users. The greater the percentage of your user base that you can turn into power users, the better your retention will be and the faster your business will grow.

AI Copilots Increase User Efficiency

While we're on the topic of power users, a critical barrier to a user feeling a magic moment is the amount of time it takes them to perform key tasks in your product. If a user finds themselves facing a repetitive, boring set of tasks (especially ones that they need to do regularly), they're more likely to churn and less likely to recommend your product to others.

AI copilots increase user efficiency by giving users a shortcut to every task or set of tasks in your product. Instead of having to click through a series of menus, sometimes over and over again for repetitive tasks, users can just ask the copilot to do it for them.

Let's look at an example. Say you're using a customer relationship management (CRM) tool and you want to create a list of leads to follow up with and draft personalized email sequences for them. This would take quite some time, even if the email sequences largely followed the same format. With a copilot, you could just tell it to create the list and draft the emails, and it would do it for you in a few seconds.

AI Copilots are Attractive Features

Cloud-based SaaS products are getting more and more competitive in every niche. Breaking through the noise and acquiring users is a challenge that gets harder and harder. Similarly, raising money for a startup is getting trickier as well, a natural response to the increased competition.

AI copilots can make the difference in attracting users. Having them demonstrates that your product is on the cutting edge of technology, and that you're clearly investing in making your solution the best it can be.

To investors, this is also a good sign. It shows that you're thinking about the future of your product and that you're willing to invest ahead of the curve to ensure it remains the best in its class.

AI Copilots Reduce Support Costs

Support costs are a significant expense for any software company. The more users you have, the more support agents you need, and the more expensive it gets. Furthermore, every support ticket is a chance for a user to get frustrated and churn.

AI copilots reduce support costs by automating away the most common support requests. If a user can get the answer to their question by asking the copilot, they're less likely to reach out to your support team.

This translates to happier users and a more cost-efficient human support team. You might think that a chatbot could have the same impact without the need for a full AI copilot, but there are some key differences between the two that make copilots more effective at reducing support costs:

  • Chatbots can't perform tasks: Chatbots can answer questions and provide information, but they can't actually operate the software on behalf of the user. This means that users still have to do the work themselves, or turn to support if they can't figure out how.
  • Chatbots can't interact with the UI: Chatbots can't click buttons, fill out forms, or navigate the UI. This means that while they can redirect users to support or relevant documentation, they can't actually show the user where they should be going to solve their problem.

AI Copilots Provide Invaluable Data for Improving Your Products

Finally, AI copilots can provide you with a wealth of data about how users are using your product. Every question, every task, every automation that a user asks the copilot to do is a data point that you can use to improve your offering.

Here are some ways you can use this data:

  • Identify common pain points: If a lot of users are asking the copilot to do the same task, it's likely that task is too difficult or time-consuming.
  • Find the magic moment: If you find a lot of new users asking the copilot to do the same task, that task might be the magic moment for your product.
  • Improve your onboarding: If you see a lot of users asking the copilot how to do something, that's a sign that your onboarding experience could be improved.
  • Discover new features: If you see a lot of users asking the copilot to do something that your product doesn't currently support, that's a sign that you should consider adding that feature.

So, Why Use AI Copilots in SaaS? Because They Rock

AI copilots will drive up your key metrics (acquisition & retention) while reducing your support costs and signaling to your investors and customers that you're serious about building the best product you can and staying at the bleeding edge of technology.

This post is part of our guide on how to build an AI copilot. If you're interested in integrating one, check out Rehance for the easiest way to get started.