The Transformative Impact of AI on Customer Service

BT has announced plans to replace around 10,000 jobs with artificial intelligence. This could make it harder for consumers to get hold of a real human in customer services. The telecommunications giant revealed it will slash up to 55,000 jobs in total by 2030 amid growing concerns about the impact of AI on the job market.

So, it seems that AI has the potential to have a major negative impact on both the employee and customer experience. So how can brands embrace this new technology to reap the cost benefits AND enhance the customer and employee experience?

Customer service has always been a critical component of any business, but with the emergence of new technologies, traditional ways of providing support have undergone a dramatic shift with the advent of highly automated contact centres and for many consumers the experience has become worse. This transformation will only accelerate with Artificial Intelligence (AI). AI, with its diverse applications, is revolutionising the customer service domain. Here we look at the pros and cons and finish with some advice on how to make the most of the opportunity.

Always-On Customer Support

One of the most evident benefits of employing AI in customer service is the availability of support around the clock. Chatbots and virtual assistants don’t need to sleep or take breaks, so can provide instantaneous responses to customer queries at any hour. This 24/7 support system is not just a win for customers who seek prompt responses but also a cost-effective strategy for businesses that need not invest in round-the-clock human support. Chatbots also don’t get tired or lose their temper whatever the time of day.

Scalability and Efficiency

When the volume of customer inquiries surges, it’s AI to the rescue. AI-powered solutions can handle multiple interactions simultaneously, ensuring that customers don’t have to wait in long queues. Not only does this enhance the customer experience, but it also allows human agents to focus on issues that need a personal touch, ensuring efficient utilisation of resources and a more rewarding role for agents. Previous research has found that customers are happy to have easily resolved queries or transactions handled by a chatbot or on-line help. We would much rather have AI deal with our problem quickly and efficiently, even if it is a robot, rather than sitting in a queue listening to one of those incredibly irritating and disingenuous messages that say, “Due to exceptionally high call demands, our agents are unable to answer your call at this time, however, your call is very important to us so please call back”.

AI is a data powerhouse. By analysing vast amounts of customer data, AI can offer invaluable insights into customer behaviour and preferences. These insights enable companies to provide more personalised and proactive service. For example, by predicting when a customer might face an issue, support can reach out proactively, often solving problems before the customer even knows they exist. In the case of healthcare, AI can access a patient’s history and an enormous amount of comparative data to quickly diagnose an issue and recommend appropriate follow up treatment. How often have you had the
experience of having to explain numerous times to various medical staff your history and the nature of your problem and wondered, “Shouldn’t they know this already?”

Streamlining Routine Tasks

AI automates mundane and repetitive tasks, freeing up human agents to focus on more complex issues. For instance, AI can easily handle queries about account balances, order status, or basic troubleshooting, while humans can take care of escalated issues that require empathy and judgment. When the problem is acute or complex, we still prefer to have the comfort of speaking with a human. For example, if we believe our account has been hacked, we seek assurance from a real person. AI coupled with human agents enables the best of these approaches to be merged seamlessly. We call this ‘High Tech/High Touch’, and the best organisations do this brilliantly. First Direct has been rated the best retail bank for customer service on numerous occasions. It marries an extremely easy app and web site with AI chatbots with very responsive, highly-trained and warm call centre agents.

Language Processing and Natural Conversations

With Natural Language Processing (NLP), AI systems can understand and engage in human-like conversations. This capability allows for more natural interactions between customers and AI support tools, improving the overall experience. One recent study found that AI generated email responses to common customer complaints were judged to be more empathetic and helpful, achieving higher customer satisfaction scores than their human counterparts. And they can do it again and again. However, despite the numerous benefits, it’s crucial to recognise that AI is not without its drawbacks.

The Missing Human Element

AI, no matter how advanced, lacks the human touch in dealing with very difficult situations. In emotionally charged interactions or extremely complex cases, the inability of AI to empathise can leave customers frustrated. Human agents excel in building relationships and trust, which AI can’t replicate entirely.

There may come a time when AI has the nuance to be able to conduct this kind of interaction, but it is currently some way off. Having said that, this is where many organisations still need to improve their human communication as they either fall back on defensive language, hide behind rules or fail to propose timely solutions.

Privacy and Security Concerns

With AI systems handling sensitive customer data, privacy and security become paramount. There’s an underlying risk of data breaches and misuse. Transparent policies regarding data handling and robust security measures are critical in addressing these concerns. However, this is nothing new and increasingly politicians and technologists will call for ‘guardrails’ to control and regulate AI.

The Way Forward

It’s evident that AI brings cost saving to organisations and potentially, a plethora of benefits to customers, but it’s not a one-size-fits-all solution. The future of exceptional customer experience lies in striking the perfect balance between AI and human interaction. Utilising AI for first-level support and routing more intricate issues to highly trained human agents seems to be the winning strategy. Our ‘High Tech/High Touch’ mantra is key here and a fundamental part of how we design customer experiences.
In conclusion, AI is not just a trend; it’s a transformative force in customer service. There is no going back as the ‘genie is already out of the bottle’. Businesses that leverage AI intelligently while investing in the resources to deliver the personal touch are the ones that will thrive in this ever-competitive landscape.

Shaun Smith, Smith+Co

(Full disclosure: It seems appropriate in writing about AI to utilise it in order to demonstrate its potential. Accordingly, I used OpenAI Chat GPT4.0 to help draft this blog. Approximately 40% was generated by AI and 60% penned by me. Can you spot the difference?)

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