Is artificial intelligence the future of customer service?

3rd Dec 2015

The UK Customer Satisfaction report produced by The Institute of Customer Service earlier this year highlighted that the UK is now in a ‘Relationship Economy’, created by the amount of choice that consumers have and customer service becoming the key differentiator in which service or product we often choose. Perceptive journalists and analysts have pointed out it is now more important than ever that customers are retained and gained through superior customer service.

The problem for organisations in having quality conversations and relationships with their customers is the plethora of channels through which customers choose to communicate. These include ‘live’ (telephone), ‘real-time’ (web chat) and ‘offline’ (social media, emails, etc.) communications. With so many formats and channels it is no wonder that organisations are struggling to understand what their customers are saying to them.

What is convenient for an organisation is not always convenient for the customer. However, the customer must always be given the choice. On average it costs organisations £3.77 to service a customer on a phone call. This cost is significantly higher than other channels such as web chat, where an operator can handle more than one customer at a time. The cost of serving customers through offline channels such as email is much less. So organisations can save costs by encouraging customers to use email, however, if the response is not quick enough then the customer will lose confidence in that channel and revert to other methods which require more human resource and incur higher cost.

Telephone still popular

By far the most popular means of communicating with customer service departments is via the telephone, perhaps because it provides customers with the opportunity to communicate their emotion and invoke empathy in the hope that their grievance will be settled sooner. This sadly is not the case, as calls are often more frustrating than reassuring, repetitive security questions and follow-up emails can simply add to the frustration.

These negative experiences are partially to blame for why people are starting to use other communication channels. Furthermore, recent customer demographics state that people over 40 would rather speak to a person, however the younger generation prefer internet and mobile for communications. Also contributing to the decline of the telephone conversation is the cost for organisations. The £3.77 it costs organisations per customer service call is significantly higher than other channels such as web chat, where an operator can speak to more than one person at a time.

As organisations become more disenchanted with the financial viability of telephone calls and as the younger tech-savvy generation grow up, voice calls could be phased out altogether. Yet, analysts still say that for more complicated, sensitive complaints we will still want to speak to a person. If their predictions are correct then the role that call operators perform should still be highly valued, and the processes clearly require streamlining.

Artificial intelligence

For those instances where a less personal approach is required, organisations are starting to use artificial intelligence (AI) in augmentation with operators. Some might say this technology is the grown-up sibling of the cinema automated booking line and is in fact not too far away from the likes of Apple's ‘Siri’ and OK Google. Programmes such as Amelia by iPsoft are not only able to understand the question that they are being asked and respond by using a manual or searching the internet, but by learning from human advisors. The future for the telephone conversation, as with all three mediums of customer service correspondence, is one of integration between man and AI.

‘Real-time’ communication is one of the emerging channels of choice by consumers. By the end of this year, 42% of the global population will own mobile phones, making the ability to chat in real time with customer service operatives easier than ever. This method is also popular with organisations and contact centres because it is very cost effective. Operators are able to respond to multiple messages at the same time and do not necessarily have to be located in one office.

Live web chats can be facilitated by standalone programmes built into websites, however more and more organisations are turning to social media as a free form of live chat. There are a number of examples of companies, including Virgin Trains and Amazon, successfully using social media as a service channel - but the pitfall with social media is that consumers tend to expect an immediate response and this then relies on a person to review and understand each post - a costly resource. 

With AI, organisations will be able to understand what customers are saying in real-time and respond rapidly and appropriately

Thanks to the introduction of artificially intelligent software programmes like IBM’s Watson and Amelia, it is possible to streamline live web chat so that human operators are only responding to exceptions or escalations, e.g. commonly asked questions such as 'I have lost my password' are automatically dealt with by AI. In addition, the implementation and integration of AI into live web chat is assisting the 24 hour support culture - it is not reasonable to ask a human to work 24 hours a day or unusual hours, but it is to ask AI to. 

Email trouble

Another way customers chose to communicate with organisations is through ‘offline’ communications, defined as emails and letters, etc. Letters or more commonly these days, email, are still consider one of the most effective way to communicate with organisations – it is more official. 94% of all online retailers provide email customer service over any other channel, conveying how important this channel is. Staff are required to read and understand these ‘unstructured’ communications before deciding how and when to respond to them.

The problem again is the ‘unstructured’ nature of correspondences such as complaints, claims, contracts etc, which makes handling email one of the most labour intensive tasks that is subject to delays, errors, misinterpretation and inconsistent judgements. As with the other channels mentioned, AI and cognitive learning technologies could be used by organisations to streamline their consumption of customer correspondences.

AI and cognitive learning technologies may be one of the emerging solutions to this problem. For example, the retail, logistics and finance industries are effectively using the technology to handle their customer service and unstructured data. AI and cognitive learning technology enables organisations to consume and understand what their customers are saying regardless of the fact that the content is unstructured and unpredictable.

More importantly, the technology is able to learn and so the workforce doesn’t need to scale to cope with growth or even unexpected surges in demand. For example, cognitive learning technology would be useful when a company receives a surge of complaints due to a rail strike, delay or even a faulty product. The system implemented could upscale accordingly without the need to employ more people or outsourcing.

Rapid response

With AI, organisations will be able to understand what customers are saying in real-time and respond rapidly and appropriately. A growing number of the correspondence received will be able to be dealt with minimal human intervention, ensuring that customers receive a swift, consistent and personal service. Whilst allowing humans to focus on more high value tasks, such as spending more time talking to customers to develop ‘relationships’ and reputation.

Cognitive learning technology will give meaning to even the most unstructured content. Organisations will be able to realise the value that would otherwise remain buried in unstructured content, providing insights and making sure that relevant information is shared with the right people and systems without delay. The productivity of staff increases and customer service and satisfaction improves, which ultimately leads to an improvement in reputation and financial performance.

Chinia Green is marketing development manager for Celaton

Replies (1)

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By Grace Evans
16th Dec 2015 13:17

Great article! AL is not only the future of customer service, but the future of mankind in general.

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