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AI chatbots ‘vs’ human customer service – which is better?

  • 13/03/2023
  • Paul Atkinson

AI chatbots ‘vs’ human customer service – which is better?

concept showing a female customer service representative versus a robot

Artificial intelligence is now all around us, infiltrating more and more aspects of our daily life. While some people still identify AI with robots and believe it is all somewhat 'otherworldly,' the fact is that artificial intelligence is already integrated into our daily lives and may provide significant benefits in terms of a business's development.

Excellent customer service has always been essential, but as the economy grows more competitive, it is even more critical that clients connect with your organisation smoothly. In the current economic situation, that's the only way to keep clients and grow.

75% of consumers feel it takes too long to reach a live representative. Consumers expect to be served around the clock and to receive the assistance they require as soon as possible. Nevertheless, a person on the other end of the phone can only manage one query at a time. In contrast, artificial intelligence can oversee several tasks making little or no mistakes.

Regular client engagement is what drives income for many businesses. As a result, companies are compelled to spend enormous sums of money on salaries for staff members who provide round-the-clock help. Is AI more effective than humans in customer service, or have human agents established such a high standard? When can you combine digitalisation with a human touch to improve client experiences?

Are chatbots outperforming humans in customer service?  How artificial intelligence influences customer service? Businesses are debating whether human or AI-powered chatbot-based service is better for their clients. In this article, we look at both choices.

Benefits of ‘human’ Customer Service

smiling man at his laptop wearing a headset

1. Being compassionate and empathetic goes a long way

Humans are unique in every way, including their reaction flexibility and empathy for consumers. More than 40% of consumers prefer to get their questions answered via live chat over any other method because humans are naturally emotional beings. Consumers are happier when their problems are dealt with personally and respectfully.

2. Live agents can react better 
Not all problems are serious, and some issues are resolved quickly, which live agents are better at responding to. Chatbots follow a more systematic line of questioning to understand the problem and provide solutions that closely match the issue. If the enquiry becomes too in-depth for the chatbot, it must redirect the ticket to an available customer service operator, which delays the problem being resolved. 

3. An experience-driven approach is more advantageous.
People learn through experience, and as customer service representatives can respond to different circumstances and use their knowledge and expertise to provide excellent service. Humans are more adept at dealing with frustrated, unhappy, or even stressed consumers to achieve the best possible outcome. 

4. Understanding cultural sensitivities
Companies deal with people of diverse nationalities, cultures, and backgrounds daily. Being sensitive to different characteristics and the consumer's personality depending on these variables means the customer experience is tailored much more to their needs. One of the primary advantages of using humans rather than chatbots is embracing cultural sensitivity.

What benefits can chatbots bring to Customer Service?

Chatbot concept, online assistance, chat robot answering questions.

Spending on activities that focus on existing customers is outpacing spending on new customer acquisition. Customers can now enjoy access to customer service 24/7 and, at the same time, get the right help they need with the minimum of fuss or delay. 

However, the call handler on the other end can only handle one call at a time. What happens when your customer base is growing - you need more staff. The more customers contact your helpdesk, the longer they wait until they reach the agent. After all, they are only human, and therefore capacity is limited. 

Artificial intelligence, however, can work non-stop, making the odd mistake. Chatbots are computer-programmed software using machine learning and artificial intelligence that improves the customer journey and fulfils client enquiries. 

Chatbots are gaining popularity globally because of the following strengths:

1. Available 24/7 
Shorter response time and more reliability. A chatbot may operate indefinitely and handle many inquiries at once. Chatbots, by definition, do not need (lunch, comfort, etc.) breaks and are not restricted in the number of hours they may work. As a result, you can contact the service provider at any time. 
The chatbot will answer some of the basic questions, but if the question gets more complex, the bot (thanks to natural language processing – NLP) will link the customer with the agent who can handle their request. So, not only does this offer the perfect solution, reducing the response time, but it also allows a genuine 24/7 customer service offering, which further translates into improved customer satisfaction.

2.  Keep overhead costs low
Following the above, it's easy to understand how appealing chatbots may be to a firm trying to cut expenditure by 20-30% because there's no need to provide holiday or sickness pay or oversee expensive recruiting and training requirements. You only have to train a robot once! 
Hiring people is a complicated process. Recruitment, training, and trial periods are costly and do not guarantee that the employer will have an excellent customer service representative. Hiring people is a complicated process. Recruitment, training, and trial periods are costly and don't guarantee that the employer will have an excellent customer service expert.

3. Better response time
When deciding to contact a customer service team, receiving a prompt response and answer to an issue or resolving a problem is always welcome. The eCommerce sector has embraced chatbots. It's thought that this year (2023), AI Chatbots will deliver over $10bn in annual cost savings for the retail, banking, and healthcare sectors (up  $6bn in 2018).

4. Customer insights
AI customer service solutions give information on client behaviour, collecting and analysing data on purchase history, giving businesses valuable insights to tailor their marketing plans and improve customer service.  All this information provides for a more tailored client experience, and the benefits of this are substantial, with over 50% of shoppers believing 'personalisation' positively increases their purchasing decisions.

5. Customer personalisation
Research has shown that 59% of shoppers who have experienced personalisation think it dramatically influences their purchase decisions. Using the vast data available, AI can find patterns and trends to predict your customer's next purchase.

What are the challenges associated with chatbots:

1. Installation costs 
For AI chatbots to be effective, businesses must implement custom-built software into their existing IT systems. Yet the expense of custom software development might be costly. According to a recent Gartner 2021 CMO Survey, technology accounts for 26% of their spending to support customer retention and growth. Despite the high return, some small or micro businesses may not have large budgets to afford this investment to implement an AI system.

2. Lack of creativity
In truth, an artificial intelligence computer is only as creative as its developer. It does not grow more creative as it learns. As a result, it is hard to delegate creativity-demanding tasks to the program. 

3. Problems with accuracy
Just like humans, programs can make errors, depending on how they’re programmed. Unlike humans, they usually don’t see them in time. This means it’s still essential to check an AI’s results to make sure no mistakes have been made.

Summary: Artificial or Human Intelligence in Customer Service

So, is AI the future of customer service? Artificial intelligence will keep growing in popularity, and the wealth of evidence proves it works. AI development services increase efficiency, improve processes, or boost sales – everything any company appreciates.

It is a difficult call when we consider the difference between artificial intelligence and human intelligence. Comparing the strengths, flaws, and customer benefits all help focus on which one is superior in its delivery.

While live chat in customer service has been a game changer. How a chatbot can handle multiple queries at a low cost could be a real turning point for AI as the future of business. However, as customer service representatives, humans still have a considerable role, as they will always offer the unique personalised touch that customers value enormously.

Chatbots will only partially replace people in the customer service business, but combining the two that complement each other, will undoubtedly result in improved customer service experiences.

Dan Hancocks, CEO of CoCredo Credit Reference Agency, says: 2023 will present numerous exciting opportunities for the business credit industry, allowing us to play a more prominent role in providing unique end-to-end solutions that will deliver better advice and insights to business leaders, assisting them in making critical decisions that improve their cash flow and efficiency. Accelerated by the COVID pandemic, it also answers the global customer demand for a more streamlined data consumption experience. 
These emerging technologies will drive customer experience initiatives and shape broader business strategies, giving the credit industry a competitive edge. However, there is a definite need to balance technology with a genuine and personalised customer service experience. As a sector, we should maintain a delicate balance between providing automation to systems and processes when it’s convenient and offering access to an in-person service when required – however, determining the difference is a significant part of the challenge.

As the epidemic demonstrated, people love people, and life is much more difficult without essential human contact. The same applies to customer service too. Speaking with real people listening carefully to customer questions, and providing proper support to achieve the best possible outcome.

As AI technology snowballs, people are still looking for that "something extra" that goes above and beyond – which a bot can't provide.  

At CoCredo, one of the UK's leading Credit Report firms since 2002, customer service is at the heart of everything we do, and we value that our client retention rate is 99%. So, if you want to speak to real people who can provide the business credit report solutions you need and that work in unison with automation efficiencies, please get in touch with us at 01494 790600 or email us at 

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