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ZDNET’s key takeaways
- 82% of people prefer human customer service reps to AI.
- Overreliance on AI could cause reputational damage.
- Some companies are reinvesting in humans over AI.
This time three years ago, most people had never heard of generative AI. Today, the technology is a cultural behemoth, and businesses across virtually every industry are facing huge pressure to embrace it.
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At least at first glance, customer service would seem to be a field that’s particularly ripe for AI-powered automation. Chatbots specialize in fielding simple queries, while newer and more powerful agents can access a business’s internal files to provide up-to-date information, send follow-up emails, and perform other complex tasks. Little wonder that a fleet of companies like Salesforce and Microsoft have been replacing human customer service reps with AI.
New research, however, suggests this could turn out to be a mistake — that despite the huge amount of marketing gusto that’s been poured into selling generative AI-powered customer service tools to businesses, the technology could in fact be doing more harm than good.
Humans over bots
You know that relief you feel when you finally get past a customer service bot and an actual person picks up the phone? Turns out most other people seem to feel that way too, even in the age of AI.
Also: Despite AI-related job loss fears, tech hiring holds steady – and here are the most in-demand skills
A survey conducted earlier this year by HubSpot and SurveyMonkey found that 82% of respondents prefer talking to a human being during customer service interactions, even when their wait time is exactly as long as it would’ve been if they were interacting with a chatbot.
Similarly, a recent report from Verizon found that 88% of respondents felt satisfied with their interactions with human customer service reps, compared to 60% who said they were satisfied with interactions handled by AI.
The upshot is that even though replacing human customer service employees with AI could save businesses money in the short term, it could also cause frustration among customers over time, producing reputational damage.
Also: Consumers more likely to pay for ‘responsible’ AI tools, Deloitte survey says
Shai Ahrony, CEO of marketing agency Reboot Online, calls this phenomenon the “AI aftershock.”
“Companies that rushed to cut jobs in the name of AI savings are now facing massive, and often unexpected costs,” he told ZDNET. “We’ve seen customers share examples of AI-generated errors — like chatbots giving wrong answers, marketing emails misfiring, or content that misrepresents the brand — and they notice when the human touch is missing.”
He added that the backlash has spread to social media.
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“Some have even left negative reviews and shared warnings on X, TikTok and Reddit advising others to avoid companies that overuse AI. This kind of reputational damage can be expensive,” he said.
Changing course
Some companies have already learned painful lessons about AI’s shortcomings and adjusted course accordingly. In one early example from last year, McDonald’s announced that it was retiring an automated order-taking technology that it had developed in partnership with IBM after the AI-powered system’s mishaps went viral across social media.
Also: Forensic vibers wanted – and 10 other new job roles AI could create
More recently, fintech company Klarna started hiring human customer service employees again after realizing that AI was delivering a “lower quality,” as company CEO Sebastian Siemiatkowski told Bloomberg. (Siemietkowski told CNBC in Maythat his company’s investments in AI had contributed to an employee headcount reduction of about 40%.)
A global survey of 2,000 CEOs conducted by IBM early this year found that only about one in four internal AI business initiatives has delivered expected ROI. Even more jarringly, a MIT study published in August showed that 95% of businesses’ experiments with AI have not delivered any real returns.
“Humans are underrated”
McDonalds’ and Klarna’s decisions to backtrack on AI in favor of humans is reminiscent of a similar about-face from Tesla.
Also: The work AI should really be doing, according to these pros
In 2018, after Tesla failed to meet production quotas for its Model 3, CEO Elon Musk admitted in a tweet that the electric vehicle company’s reliance upon “excessive automation…was a mistake.”
“Humans are underrated,” he added.
Businesses aggressively pushing to deploy AI-powered customer service initiatives in the present could come to a similar conclusion: that even though the technology helps to cut spending and boost efficiency in some domains, it isn’t able to completely replicate the human touch. At least for the time being, its shortcomings very well may overshadow its benefits.
