The Perception of AI in Customer Service

How Business Owners Perceive AI in Customer Service

We'll begin by looking at business owners, learning more about what these leaders think of customer service AI.

Executives Expect Generative AI to Interact Directly with Consumers by 2026

It seems that business owners and executives believe firmly in the capabilities of customer service AI. As many as 85% of executives said they expected to be using GenAI to interact directly with customers over the next two years.

In fact, this is already the case in almost half of businesses — 47% of companies were already using AI chatbots to deal with service queries round-the-clock by September 2024.

Businesses Are Already Experiencing Strong Results from AI

The rate of adoption of AI in customer service suggests business owners are already placing significant trust in the technology. Lori Bieda from the Bank of Montreal described how AI customer service bots handled more than two million customer queries between August and October 2024, achieving customer satisfaction rates of up to 92%.

Bieda said this has a huge impact on customer net promoter scores, in turn driving growth. It seems that business owners are already gaining the proof they need that this is a workable customer service solution.

Businesses Owners Are Ready to Double Down on AI Investments

So business owners are optimistic about the benefits of AI, but they also understand that serious investment is needed to realise its potential. A significant 82% of firms surveyed in March 2024 said they would continue to invest heavily in AI. Roughly a third of businesses said they were going to increase their investment by more than 50% by 2025.

Despite this, many businesses are concerned they lack the expertise and competency required to get the best from AI. Almost 40% of business owners surveyed said they do not currently have the skills required to embed AI into their core operations, even though 69% said they expected to have done so by 2025.

How Consumers Perceive AI in Customer Service

Of course, you can't have customer service without a customer. So what do these core stakeholders think?

Consumers Are Overwhelmingly In Favour of Conversational AI in Customer Service

Research published in October 2024 found that consumers are overwhelmingly in support of conservational AI as a key provider of customer service.

Around 82% of respondents said they would like to see if a chatbot could help them first instead of waiting for an agent to take their call. The wording of this is a little ambiguous, but it does suggest these respondents would still like to work with a human representative if the chatbot didn't complete the query to a satisfactory level.

However, 96% of respondents to the same survey said that more companies should use chatbots rather than more traditional customer support teams.

Many Consumers Feel Conversational AI Will Take Over Customer Service

Findings from the same October 2024 survey suggested that most consumers believe it's only a matter of time until conversational AI takes over customer service.

Around 94% of respondents said they felt this technology will make traditional call centres obsolete, although the report doesn't specify when they believe this will happen.

A Hybrid Human/AI Customer Service Setup Is Popular

Back in August 2024, Dynata released the findings of their own survey. In some areas, this was inconclusive — 39% of respondents said that talking with an AI system was worse than speaking to a human operator, for example, while 33% said it was better.

However, in other areas, the survey did provide valuable insight. More than three-quarters of people who responded to the survey said they preferred to interact with a human using AI to assist with their query rather than a chatbot. This suggests the door is open for a hybrid approach to customer service.

Consumers Really Don't Like Bad Service

Ultimately, it's the quality of service that matters. Research has shown that 86% of customers in the US and the UK would turn their back on a brand they had been loyal to after only two or three instances of bad service.

This is the key driver for customer service AI. If it can improve the experience for the consumer, then consumers are going to embrace it.

How Agents Perceive AI in Customer Service

Finally, how about the customer service agents themselves? What's the perception of AI like for these individuals?

Many Customer Service Agents Are Already Seeking New Employment

There is significant concern among customer service agents that AI will make them obsolete. Findings from August 2023 showed that 84% of agents "who fear replacement" are actively seeking new jobs.

We need to approach stats like this with caution. This is not 86% of all agents — it's 86% of those who fear replacement. The actual number of people seeking new careers is likely to be far lower but could still be significant.

There Is Still Optimism in the Human Customer Service Industry

As we've touched on above, AI provides opportunities for human agents, such as human/AI hybrid roles. Despite this, it is estimated that the number of human customer service agents will fall by between 20% and 30% by 2026, which is really not that far away.

However, the shift will lead to new roles and new duties in customer service. This will take time — Dr. Mansoor Somro, a Sustainability and International Business professor at Teesside University, believes it will take 7 to 10 years for the new jobs market to become stable. Many agents are still optimistic, though — 63% said they believe GenAI will help them serve customers better.

Workforce AI Capabilities Are Lagging Behind

In order to thrive in this new normal, customer service providers need to be proficient in using AI-based technologies. Right now, we're a long way off achieving this.

Results of a survey published in August 2024 showed that only 7% of the workforce is currently "great" at using AI. This is going to lead to anxiety among service professionals as they seek to gain the skills they'll need in a new environment.

The Only Certainty in Customer Service AI…

The only certainty about customer service AI is this: change. The coming years are going to bring significant developments as increasing numbers of businesses move towards AI-based customer service solutions.

How we manage that change — how businesses harness the benefits of AI while safeguarding job stability — and how customers respond remain to be seen.