AI Chatbots vs. Human Collaboration in Customer Service Teams

Introduction

Earlier this year, Klarna announced that it would be replacing 700 customer service professionals with artificial intelligence (ai) chatbots. This announcement raised a lot of questions, like, if ai could handle the work of so many customer service agents, was the industry heading for an inevitable collapse? Now that some time has passed, we need to use critical thinking to assess the situation. We know that ai can handle many customer service tasks, but it also lacks expertise in many areas that humans are proficient in. So, where does the industry stand? And if you’re a business, should you get started? Replacing humans with softwareThis article discusses the hot topic of “ai Chatbots vs Humans for Customer Support” to give you some clarity.

Read also: ai for customer service: the 10 most common use cases

Customer service is an 80/20 problem

The Pareto principle states: “For many outcomes, approximately 80% of the consequences come from 20% of the causes.”

This principle also applies to customer service.

Customer service agents spend most of their time answering repetitive questions and critical issues are much less frequent. This creates a few problems:

1. Low complexity requests become expensive

A live chat interaction is expensive for businesses, costing around $7 for B2C companies and $12 for B2B. So, you can end up wasting a lot of resources on these repetitive chats alone.You can calculate your waste using our calculator.)

Both problems are areas where ai can help. However, it is not a panacea and has its pros and cons.

<h2 class="wp-block-heading" id="h-ai-in-customer-service”>ai in customer service

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

Advantages

• 24/7 multilingual support – ai can provide multilingual support to your customers 24 hours a day. Since a bot can serve multiple customers at once, it greatly reduces the overall resolution time.
• 0 seconds to the first response – ai-powered chatbots can respond instantly to a customer query, improving customer engagement and helping build better customer relationships.
• Fast data processing – Chatbots can process data in a very short period of time, allowing them to answer complex questions with contextual data every time a customer asks a question. This significantly reduces the time an organization spends training a human agent.
• Automation of repetitive queries – You can automate up to 80% of customer service queries by leveraging ai. This is because this chatbot can easily answer all the common questions about your product or service without any hassle.

Cons

• Lack of empathy – Algorithmic responses are not exactly empathetic to customers. In the case of critical problems, ai often gives 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 may 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 company does not have proper documentation of its processes and products, ai will struggle to provide comprehensive answers.
• Hallucinations – Large language models (LLMs) tend to generate meaningless and out-of-context responses when they do not have data to answer a question. While much research has been done in the area, this problem still persists.

As we explained above, using ai is not exactly a risk-free proposition. So, if you want to use ai-customer-service/” target=”_blank” rel=”noreferrer noopener nofollow”>ai in customer serviceIt is important to make a careful decision, but a human agent system is not infallible either.

Humans in customer service

Now let's look at the pros and cons of having humans provide customer support.

Advantages

• Can solve complex problems – Humans can understand and resolve difficult issues through live chat and phone calls, allowing them to provide quick resolution to customers.
• You can be empathetic – Humans can understand and adapt to changes in tone, allowing them to understand customer emotions and offer better solutions.
• Building relationships with customers – Because customer service executives are more empathetic and emotionally intelligent, they can build a stronger relationship with customers. They can understand and address their needs and provide proactive support.

Cons

• Prone to fatigue – If queries are repetitive, human agents may become tired. Since customer service tasks are often monotonous, many agents feel dissatisfied with their jobs.
• High dropout rate – As we have noted, customer service positions have a very high attrition rate, reaching an average of 35-40%. This increases costs in general and requires multiple training cycles in the role.
• Expensive – The most critical aspect of dedicated customer service specialists is cost. Hiring dozens or hundreds of people for this role can be very costly for any company.
• Higher response times – Human agents can only handle one query at a time, which can significantly increase initial response time, resulting in more friction for the customer.

What is perfect balance?

We believe that an “ai + Humans” strategy is the right solution to address the customer service problem. In our experience, up to 80% of customer service queries are repetitive and can be automated using ai. On the other hand, humans are needed to solve critical and complex problems for your customers.

When you create a transfer system where complex queries are automatically transferred to a human agent, you end up with a platform that is both cost effective and scores highly in customer satisfaction.

ai is an enabler that enhances human activity. And when many repetitive queries can be automated, human agents end up earning more revenue per person and providing support for critical issues that really require their attention.

Conclusion

The endless debate over whether ai chatbots or humans will be the future of customer service is largely irrelevant. As we’ve shown here, ai and humans excel at completely different things. While ai can automate repetitive questions and reduce first response time, humans are needed to build connections and solve complex problems. That’s why the “ai + humans” approach is the only viable solution in today’s environment.

The customer service landscape is highly competitive, and executives are increasingly using ai to improve the effectiveness of the function. But ultimately, companies that leverage the benefits of both human and ai strategies will be the ones that exceed customer expectations.

Frequent questions