The Business Case to Keep Customer Interactions Human

Today's contact center leaders face mounting pressure to do more with less. This drive for efficiency has led many companies to consider leveraging artificial intelligence (AI) and automation, which promises to streamline processes, cut costs, and boost productivity. But, while automation of certain customer support processes does have some potential to improve the bottom line, the complete removal of human decision-making, flexibility, and creativity can significantly impact the customer experience and, ultimately, business success.

Despite AI's capabilities, human interactions are essential for effectively resolving issues, retaining customers, and driving revenue growth. Recent studies have shown that human agents outperform AI assistants in seven out of 10 critical customer service tasks. This is particularly true for complex problem-solving and achieving first-call resolution. The findings indicate that while AI can handle simple queries, customers believe that human agents are more effective for nuanced and complicated issues.

While automated systems can be efficient, they often lack the flexibility and empathy of human agents. Humans uniquely possess the ability to feel, think, and experience, which allows them to build relationships and foster trust. Replacing this human touch with AI can alter companies' brand stories and change how consumers feel about their interactions with them. Companies rely on their ability to evoke positive emotions and build strong ties with customers, which then translates into long-term relationships, repeat business, positive word-of-mouth referrals, and a significant place in customers' lives.

Still, for many companies, there is an over-reliance on AI for customer service, which poses several risks to the customer experience. Customers might experience frustration when AI reaches its limitations or provides impersonal and inadequate responses. AI's inability to empathize or build rapport can make customers feel undervalued, potentially harming brand reputation.

Flexibility and creativity are vital components of excellent customer service, but they are often challenging to automate. Human agents can think outside the box, rely on past experiences, and make exceptions to appease and delight customers. Memorable customer service stories usually involve human representatives going above and beyond, something AI cannot replicate.

While there are real costs associated with maintaining human-led customer service, businesses can manage these expenses by leveraging AI to enhance efficiency without replacing human agents. AI can and should be used as a tool to improve back-end processes, such as analyzing customer data to predict needs, routing customer inquiries more intelligently, and handling routine tasks to free up human agents for more complex interactions.

Despite companies' claims that AI investments aim to enhance service and simplify lives, customer skepticism remains high. When asked why companies are deploying chatbots, 57 percent of people in a recent survey said they believe it is to save money and cut jobs.

Concerns about AI also extend beyond job displacement. The PWC 2024 Voice of the Consumer Survey found that 80 percent of consumers are worried about how companies will use AI , and 83 percent emphasize that protecting their data is crucial for building trust. PWC notes that company transparency about AI use can go a long way toward creating a "trust premium" with customers, potentially enhancing customer loyalty and revenue.

The Business Impact of Human-Centric Service

AI has proven effective as a tool for routine tasks, such as analyzing customer data to predict needs and routing customer inquiries more intelligently. However, PWC data shows that 64 percent of U.S. consumers and 59 percent of all consumers feel companies have lost touch with the human element of customer experience, and 71 percent of Americans would rather interact with a human than AI.

A recent survey by Callvu found that 81 percent of respondents would prefer to wait to speak with a live agent rather than an automated system. This preference underscores the value customers place on human interaction, suggesting that live agents are not just a fallback but a preferred choice for many.

The preference for human interaction is not merely nostalgic; it has tangible business implications. One in three consumers (32 percent) said in PWC's survey that they would walk away from a company they love after just one bad experience. But, as an-often cited article by the Harvard Business Review revealed, increasing customer retention rates by just 5 percent has the potential to boost profits by 25 percent to 95 percent. This wide range highlights how even modest improvements in CX can affect customer retention and company profitability.

All of the data combined indicates a persistent preference for human interaction, even in an increasingly digital world. While new technology and tools are appealing and sometimes necessary, the human touch remains irreplaceable in customer interactions. Businesses must strike a delicate balance between leveraging AI for efficiency and preserving the invaluable human element that customers trust and prefer. In doing this, companies can ensure that they deliver exceptional customer experiences that drive loyalty, satisfaction, and long-term business success.

Natalie Ruiz is CEO of AnswerConnect, a provider of customer experience solutions for small and mid-sized businesses.