Introduction
Earlier this year, Klarna made a notable announcement – they were replacing 700 customer support professionals with AI chatbots. This sent ripples through the industry, sparking numerous questions. If AI could take over the work of so many human agents, was the customer – support industry on the brink of an inevitable collapse? Now, with some time passed, it’s crucial to critically assess the situation. While AI has shown the ability to handle many customer – support tasks, it lacks in areas where humans have an edge. So, where does the industry stand today, and should businesses start replacing human agents with software? This article delves into the much – debated topic of ‘AI chatbots vs humans for customer support’ to offer some clarity.
Customer Support is an 80/20 Problem
The Pareto Principle, which states that roughly 80% of consequences come from 20% of causes, holds true for customer support as well. Customer support agents often spend a significant amount of their time dealing with repetitive questions, while critical problems are far less common. This situation gives rise to several issues:
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Low – Complexity Requests Become Expensive: A live – chat interaction can be costly for businesses. B2C companies may spend around $7 per interaction, and B2B companies around $12. Thus, a large amount of resources can be wasted on these repetitive chats alone.
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Average Revenue per Employee is Reduced: When most of an employee’s workday is consumed by unproductive, repetitive tasks, important issues tend to be deprioritized. For example, if a customer support executive is bogged down with tickets that could be answered with a simple email macro, they might overlook more critical issues faced by other customers.
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The Customer Suffers: When customers have to wait in long queues for their tickets to be resolved, they are the ones who bear the brunt. Customer support executives preoccupied with repetitive questions are unable to address more pressing issues, which in turn affects the overall customer satisfaction (CSAT) score. Additionally, due to current ROI restrictions, most businesses find it difficult to scale their customer support functions, leading to long waiting queues and poor customer satisfaction. Customer support executive roles also face high attrition rates, as high as 35 – 40%, and 75% of these agents feel pressure to handle more requests and work faster.
AI can play a role in addressing these problems, but it is not a cure – all. Let’s explore the pros and cons of AI in customer service.
AI in Customer Service
Pros
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24/7 Multilingual Support: AI can offer round – the – clock multilingual support to customers. Since a single bot can handle multiple customers simultaneously, it greatly reduces the overall resolution time.
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0 Second to First Response: AI chatbots can immediately engage with a customer’s query, enhancing customer engagement and helping to build better relationships.
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Fast Data Processing: Chatbots can process data rapidly, enabling them to answer complex questions using contextual data. This significantly reduces the training time required for human agents.
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Automation of Repetitive Queries: Up to 80% of customer support queries can be automated using AI. These chatbots can effortlessly answer common questions about a product or service.
Cons
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Lack of Empathy: Algorithmic answers often lack empathy. For critical issues, AI responses can seem mechanical and disappoint customers.
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Less Contextual Understanding: While AI can understand information – based contexts, it struggles with context changes, such as subtle cues in human behavior.
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Need for Proper Documentation: AI’s capabilities are limited by the data it is trained on. Without proper documentation of business processes and products, AI may struggle to provide comprehensive answers.
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Hallucinations: Large Language Models (LLMs) have a tendency to generate nonsensical and out – of – context answers when they lack the necessary data, and this remains an ongoing issue despite research.
Humans in Customer Support
Pros
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Can Solve Complex Problems: Humans can understand and resolve difficult problems during live chats and phone calls, providing swift solutions to customers.
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Can be Empathetic: Humans can detect shifts in tone and adapt accordingly, understanding customers’ emotions and providing better solutions.
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Build Customer Relationships: Customer support executives, with their empathy and emotional intelligence, can build stronger relationships with customers, understanding and catering to their needs, and providing proactive support.
Cons
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Prone to Fatigue: Repetitive queries can tire human agents. The monotonous nature of customer support tasks can lead to job dissatisfaction.
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High Attrition: As mentioned, customer service jobs have a high attrition rate, averaging 35 – 40%, which increases costs and requires multiple training cycles.
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Expensive: Hiring a large number of specialized customer support specialists can be a significant cost for any business.
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Higher Response Times: Human agents can only handle one query at a time, resulting in longer first – response times and more friction for customers.
What is the Perfect Balance?
An “AI + Human” strategy appears to be the ideal solution to the customer support problem. Based on experience, around 80% of customer support queries are repetitive and can be automated using AI. On the other hand, humans are essential for solving critical and complex customer problems. By creating a handoff system that automatically transfers complex queries to human agents, businesses can achieve a cost – efficient platform with high customer satisfaction. AI acts as an enabler, enhancing human activity. When repetitive queries are automated, human agents can focus on more important tasks, increasing their revenue – per – person and providing better support for critical issues.
Conclusion
The ongoing debate about whether AI chatbots or humans will dominate the future of customer support is, to a large extent, irrelevant. AI and humans have distinct strengths. AI can automate repetitive questions and reduce first – response times, while humans are needed for building connections and solving complex problems. The “AI + Human” approach is the most practical solution in the current competitive customer support landscape. Businesses that leverage the strengths of both will be the ones to exceed customer expectations.
