AI Chatbot vs Human Collaboration in Customer Service Teams

Introduction

Earlier this year, Klarna announced that they replaced 700 customer support professionals with artificial intelligence (AI) chatbots. This announcement raised a lot of questions, like, if AI could manage the works of so many customer service agents, was the industry heading towards an inevitable collapse? Now that some time has passed, we need to use critical thinking to assess the situation. We know that AI can manage a lot of customer support tasks, but it also lacks expertise in a lot of areas that humans have mastered. So, where does the industry stand? And if you are a business should you start replacing humans with software? This article discusses the hot topic of ‘AI chatbots vs humans for customer support’, to get you some clarity.

Also Read: AI for Customer Service | Top 10 Use Cases

Customer Support is an 80/20 Problem

The Pareto Principle states: “For many outcomes, roughly 80% of consequences come from 20% of causes.”

This principle holds true for customer support as well.

Customer Support agents spend most of their time with repetitive questions, and critical problems are far fewer. This leads to a few issues:

1. Low-Complexity Requests Become Expensive

A live-chat interaction is expensive for businesses, costing around $7 for B2C companies and $12 for B2B ones. So, you can end up wasting a huge amount of resources on these repetitive chats alone. (You can map out your wastage using our calculator.)

2. Average Revenue per Employee is Reduced

If most of your work day goes into unproductive repetitive tasks, a lot of important issues get deprioritized. So, if a customer support executive is stuck on tickets that can be answered with an email macro, they might end up ignoring more critical issues faced by another customer.

3. The Customer Suffers

When the solutions for customers are stuck behind a long waitlist for tickets, they suffer. Customer Support executives who are busy replying to repetitive questions are not able to resolve the more pressing issues and it affects the overall CSAT score.

Moreover, with the current ROI restrictions, most businesses can’t scale their Customer Support functions.

This leads to large waiting queues and poor customer satisfaction. On the other hand, the customer support executive role sees attrition rates as high as 35-40% and 75% of these agents feel pressure to handle more requests and work faster.

Both of these problems are spaces where AI can help. However, AI is not a panacea, and there are pros and cons.

AI in Customer Service

First, let’s discuss the pros and cons of having AI in customer service.

Pros

• 24/7 Multilingual Support – AI can provide multilingual support around the clock to your customers. Since one bot can handle multiple customers at a time, it massively reduces resolution time overall.
• 0 Second to First Response – AI chatbots can immediately engage with a customer query. This improves engagement with the customer and helps to create better relationships with them.
• Fast Data Processing – Chatbots are able to process data in a very short period of time. This enables them to answer complex questions with contextual data whenever a customer asks the question. This significantly reduces the time an organization spends to train a human agent.
• Automation of Repetitive Queries – You can automate as much as 80% of your customer support queries by leveraging AI. This is because this chatbot can easily answer all the common questions about your product or service without any friction.

Cons

• Lack of Empathy – Algorithmic answers are not exactly empathetic to your customers. For critical issues, AI can often give answers that sound mechanical and disappoint customers.
• Less Contextual Understanding – While AI can understand information-based contexts, it still struggles to understand context changes. For example – AI might not be able to understand subtle cues in human behavior.
• Need for Proper Documentation – AI can only be as advanced as the data it is trained on. If your business doesn’t have proper documentation of its processes and products, AI will struggle to provide comprehensive answers.
• Hallucinations – Large Language Models (LLMs) have a tendency to hallucinate nonsense and out-of-context answers when they don’t have data to answer a question. While there has been a lot of research in the area, this issue is still persistent.

As we explained earlier, using AI is not exactly a risk-free proposition. So, if you want to use AI in customer service, it’s important to make a careful decision. But, a human agent system is not foolproof either.

Humans in Customer Support

Let’s now see the pros and cons of humans providing customer support.

Pros

• Can Solve Complex Problems – Humans can understand and solve difficult problems over live chat and phone calls. This allows them to provide swift resolution to customers.
• Can be Empathetic – Human beings can understand shifts in tone and adapt to it. This allows them to understand the customer’s emotions and provide better solutions to them.
• Build Customer Relationships – Since customer support executives are more empathetic and emotionally intelligent they can establish a stronger rapport with customers. They can understand and cater to their needs and provide proactive support to customers.

Cons

• Prone to Fatigue – If queries are repetitive, human agents can get tired. Since customer support tasks can often be monotonous, a lot of agents feel dissatisfied with their jobs. 
• High Attrition – As we pointed out, customer service jobs see a very high level of attrition, reaching up to 35-40% on an average. This increases costs across the board and requires multiple cycles of training in the function. 
• Expensive – The most critical aspect of specialized customer support specialists is the cost. Hiring tens and hundreds of people for the function can be very expensive for any business. 
• Higher Response Times – Human agents can only attend one query at a time which can drive the first response times much higher. This means more friction for the customer.

What is the Perfect Balance?

We believe that an “AI + Human” strategy is the right approach to the customer support problem. In our experience, as much as 80% of the customer support queries are repetitive and can be automated through AI. On the other hand, humans are needed to solve critical and complex problems for your customers.

When you create a handoff system where you automatically transfer complex queries to a human agent, you get a platform that is cost-efficient and scores high on customer satisfaction.

AI is an enabler that enhances human activity. And when you can push a lot of repetitive queries to automation, human agents end up earning more revenue per person and providing support to critical problems that actually require their attention.

Conclusion

The endless debate about whether AI chatbots or humans will be the future of customer support is largely irrelevant. As we have demonstrated here, AI and humans excel at different things altogether. While AI can automate repetitive questions and reduce first response time, humans are needed to build connections and solve complex problems. This is why the “AI + Human” approach is the only feasible solution in the current atmosphere.

The customer support landscape is very competitive and executives are increasingly using AI to enhance the effectiveness of the function. But, ultimately the businesses that leverage the advantages of both human and AI strategies will be the ones who will exceed customer expectations.

Frequently Asked Questions