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Will Customer Service be replaced by Artificial Intelligence?

With all the buzz about ChatGPT, the way people view AI is changing fast. But, even with impressive advancements in automation, there’s still one question on everyone’s minds.

Technological advancements often influence how customers think, and there’s a growing acceptance of automation.

According to our 2023 trends survey, 92% of participants mentioned an increase in their trust in AI over the last year. The introduction of ChatGPT by OpenAI has particularly sped up the adoption of generative AI, notably in the customer service sector.

Good news for businesses: as automation provides an excellent way to scale support without increasing costs. Generative AI is also impressive at enhancing customer experience by resolving queries faster and delivering a more natural conversational interaction.

Elevate your customer support this year by downloading the 2024 Customer Service Trends Guide.

Despite the positive impact on a company’s finances, the ongoing debate centers on a significant question: Will AI replace human agents? This post examines the current state of the customer service industry, emphasizing the human impacts of automation.

1. What does the customer service industry look like today?

The global business landscape has faced consecutive challenges with the pandemic and recession, leading to widespread hiring freezes and layoffs. In response, resource-strapped companies, spanning all industries, have had to make tough decisions to stay afloat, often turning to the automation of customer service to meet consumer demands. The emergence of generative AI becomes particularly appealing in this context, as it offers a higher-quality customer experience than its predecessors.

Adding to the dynamics of the current customer service landscape is the fact that being a support agent ranks among the top 10 most stressful jobs globally, with a 40% annual turnover. What if AI could enhance the agent experience instead of simply replacing their roles?

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2. Is AI capable of replacing humans?

Many in the customer service industry are concerned about whether AI will eventually replace humans. The current answer is no — at least not at the moment. Intelligent Virtual Agents (IVAs) cannot replace human rapport or engage on an emotional level, traits that are crucial in customer service.

However, automation remains a significant topic in customer service. With an increase in high-volume transactional requests and the demand for swift service, companies are implementing automation platforms to efficiently process large amounts of data. This isn’t just advantageous for business outcomes; by automating repetitive tasks like password changes or order status checks, customer service agents can focus on more complex queries.

Nevertheless, offering generic, simplistic answers, even for mundane requests, isn’t sufficient in customer care. To make AI a valuable asset in customer service, our approach needs to become smarter and more sophisticated. The objective of CX automation should never solely be deflection. Maximizing the potential of this groundbreaking technology requires a strategic approach that involves collaboration between humans and AI. The following section provides a detailed exploration of Ultimate’s recommended approach to automation.

3. Current Objective of Artificial Intelligence

The truth is, that AI cannot replace human interaction. Customers crave a connection with someone who understands them. Emerging automation technologies like generative AI are most effective when integrated into a team of human support agents, addressing what we’ve identified as the three pillars of customer service:

AI Understanding Customers: Efficiently organizing vast amounts of data, including calls and emails, is essential. Through data collection, AI can predict how customers will pose questions. Generative AI, utilizing large language models (LLMs), enhances this capability by instantly emulating elements such as brand tone of voice. Through automation, a bot can learn how customers express themselves, enabling more human-like communication.
Adaptable Platform: Conversations in personalized solutions have various endpoints, requiring bots to be proficient in all responses.
Support Teams Crafting Great Experiences: Customer service conversations follow specific steps to reach resolutions. Agents must comprehend the information, verify and correct it, confirm details with the customer, update information, and conclude discussions via email confirmation.

AI should not be viewed negatively in the customer service industry. Bots assist agents in optimizing workloads, increasing customer satisfaction, and fostering client loyalty. When implemented correctly, automation leads to happier customers and more fulfilled roles for agents.

4. What are some Pros of using AI for customer service?

Certainly, technology will play a significant role in our future, but so will customer support teams. AI lacks the capacity for creativity and empathy when clients require it, highlighting the essential role of human agents in preserving customer satisfaction.

AI enables you to manage a large volume of user requests

The accumulation of customer data grows alongside the extent of customer engagement. However, without AI, handling such extensive data could lack meaning due to the limited capacity of humans to process vast amounts of information. AI has become a valuable tool in this context.

Instead of outrightly replacing all human agents with automation, AI can serve as a supportive tool to alleviate overwhelm during busy seasons, assist in handling escalated queries, and liberate agents to concentrate on more creative and fulfilling tasks.

This capability enables the creation of targeted marketing campaigns and the resolution of intricate issues related to customer questions and complaints. For the data being collected, relying solely on Excel sheets is insufficient; hence, having a robust and reliable Customer Relationship Management (CRM) system is essential for enhanced customer service delivery.

AI enables your team to concentrate on complex issues

AI can autonomously handle routine tasks, allowing your employees to dedicate more time to critical responsibilities. This enables agents to concentrate on intricate support issues while ensuring comprehensive customer care.

When freed from numerous small yet time-consuming tasks and equipped with instant access to necessary data, agents can wholly focus on assisting individuals reaching out for help.

However, it’s important to note that AI shouldn’t be left entirely unsupervised. The chatbot software or technology you employ may require occasional intervention to ensure everything runs smoothly.

AI is cost-effective

Artificial intelligence may seem like a costly investment for your company, but the initial expenses can be quickly recovered.

The advantages of AI-powered customer service include automating simpler tasks, freeing up your employees’ time, and enabling them to handle a larger volume of customers. Consequently, you can achieve significantly more with your employees’ time and resources.

Nearly every major tech company incorporates some form of artificial intelligence into their customer service. By implementing a chatbot or an automated system, companies are already saving up to 80% on customer service costs.

For customers, AI offers significant benefits. There are no human operators, minimal waiting times, and a reduction in errors. Customers receive real-time responses to their inquiries from a bot, eliminating the need to wait for interaction with a human operator.

5. Cons of using AI for customer service

Until now, we’ve looked at the advantages of Artificial Intelligence in Customer Service. However, it’s equally important to examine the flip side of the coin for a more thorough understanding and long-term integration of AI in the Customer Service industry.

Risk of losing the human touch and creativity

A chatbot can imitate human speech effectively.

However, while an AI-powered chatbot can undoubtedly substitute (and even surpass) a human worker in terms of efficiency and issue resolution, it might struggle to replicate the human touch.

Customers desire personalization but don’t want the experience of conversing with a robot. This holds especially true for older customers who may not be tech-savvy and have always preferred human interactions, whether online or offline.

While incorporating AI is undeniably innovative, it currently falls short in terms of creativity when compared to a human.

Despite the vast potential of AI, it still has limitations in providing certain aspects and cannot ensure the same level of creativity.

Inability to improvise and emote

Even though chatbots utilize an extensive database to offer suitable answers, this isn’t always adequate. They lack context awareness, leading to customer frustration and a diminished inclination to continue communication.

If there’s a misunderstanding between the customer and the chatbot, the conversation may loop repetitively, leading to no conversion and a failure to boost sales.

6. The final say on AI vs. Humans

The customer service sector is rapidly evolving to meet customer demands, and the integration of bots has become essential for many companies. This instills fear among agents of potential job loss, with concerns about being replaced by machines — especially as automation becomes more sophisticated with advancements like generative AI. It’s crucial to dispel these fears and inform employees of the actual role of AI when implemented effectively.

At Ultimate, we advocate that the ultimate customer experience is attained when humans and bots collaborate to complement each other. This innovative technology is designed to support customer support teams, alleviate their workload, and uncover new opportunities that were previously unavailable.

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