Chatbot vs. Human: Which Is Better for Customer Service?

Peter A. Liefer II | Posted: July 1st, 2023 | Updated: May 27th, 2024

Offering exceptional customer service should be priority #1 for businesses across industries. 81 percent of online shoppers claim that receiving good customer service encourages them to make a purchase. However, as high as 60 percent of people expect companies to meet all (yes, all) of their needs. What’s more, 61 percent of customers would move to a competitor after one (that’s right, just one) negative experience. Talk about a tough crowd.

To meet all expectations, 58 percent of B2B and 42 percent of B2C companies rely on chatbots to improve their customer service operations. After all, unlike machines, humans need sleep. But the question is, in the ongoing battle between AI chatbots and humans, which is the best pick? Let’s evaluate their strengths and uncover areas where they fall short.

 

What Is a Chatbot?

Chatbots, powered by artificial intelligence (AI), is a computer program designed to simulate conversation with human customers. Gaining notable traction in recent years, the chatbot global market will grow from $5.4 billion in 2023 to $ 15.5 billion by 2028.

These virtual assistants can answer questions, provide information, and perform specific tasks. Their round-the-clock availability, immediate response rates, and scalability have made them an attractive option for companies looking to enhance their customer service operations.

In hindsight, as technology advances, entrepreneurs must weigh the pros and cons of chatbots compared to human CS representatives. Although a chatbot offers undeniable advantages, they are not a foolproof solution to every customer service scenario.

 

Chatbot Technology and Its Capabilities Chatbot vs. Human: Which Is Better for Customer Service?

Chatbot technology leverages AI, natural language processing, and machine learning algorithms to engage in conversations with humans. These automated systems understand user queries, interpret their intent, and generate appropriate responses. Companies can implement chatbot tech across various platforms, including websites and messaging apps.

The two main types of chatbots include:

  • Rule-based chatbots follow predefined rules and patterns to provide responses.
  • AI-powered chatbots employ machine learning to improve their interactions over time. They can understand context, learn from user interactions, and offer more dynamic and personalized experiences.

 

Top Benefits of Chatbots for Businesses

Using chatbots in customer service operations offers several advantages for businesses, including but not limited to the following:

  • 24/7 availability and quick response rates: Unless there’s a system error, chatbots operate nonstop, providing instant responses to customer inquiries 24/7/365. This availability allows customers to receive timely assistance, eliminating the frustration of waiting for business hours or lengthy response times.
  • Cost-effectiveness and scalability: Chatbots can handle a high volume of inquiries without incurring additional costs. Unlike human representatives, who have limitations in terms of workload, chatbots can scale effortlessly and provide consistent service.

 

Examples of Successful Chatbot Implementations

Countless companies have embraced chatbots and witnessed positive outcomes in their customer service endeavors. To name a few:

  • Bank of America: The bank introduced Erica, an AI-powered chatbot, to assist customers with financial or banking-related tasks. Erica handles routine inquiries, provides tailored insights, and even helps customers make better financial decisions.
  • Sephora: In 2017, the beauty retailer integrated a chatbot within its messaging app. It provides customers with customized product recommendations, beauty tips, and tutorials. The chatbot offers an interactive and convenient shopping experience, enhancing customer engagement.
  • Domino’s Pizza: By implementing a chatbot on its website and mobile app, Domino’s lets customers place orders, track deliveries, and resolve common queries within a few clicks or taps. The chatbot simplifies the ordering process and improves customer satisfaction.

These examples highlight the successful use of chatbots in diverse industries, demonstrating their ability to enhance customer service and drive business outcomes.

 

Importance of Human Interaction in Customer Service  Chatbot vs. Human: Which Is Better for Customer Service?

There’s a reason humans remain an irreplaceable aspect of customer service: the human touch brings a level of empathy, emotional intelligence, and nuanced understanding that AI technology cannot replicate perfectly. Customers, especially those with complaints, seek personalized experiences, reassurance, and guidance. In most cases, only human agents are well-equipped to fulfill these needs.

 

Top Benefits of Human Customer Service

Real agents possess unique qualities that contribute to exceptional customer service:

  • Empathy and emotional intelligence: Humans have the innate ability to empathize with customers, understand their emotions, and provide customized support. They can detect subtle cues, adjust their communication style, and offer compassionate assistance, which is particularly valuable in sensitive situations (e.g., the customer is going through grief, dealing with a mental health condition. etc.).
  • Complex problem-solving and adaptability: Trained customer service professionals excel in handling issues that require critical thinking, creativity, and flexibility. They can navigate different scenarios, think outside the box, and tailor solutions to meet a customer’s needs.
  • Building relationships and customer loyalty: Humans can establish rapport, build trust, and cultivate long-term relationships. By engaging in meaningful conversations, actively listening, and demonstrating genuine care, human agents create a sense of loyalty and customer satisfaction beyond transactional interactions.

 

Examples of Exceptional Human Customer Service

Several examples showcase the power of human-driven customer service:

  • Zappos: American online shoe and clothing retailer Zappos is renowned for going above and beyond, dedicating hours on the phone with customers. They ensure each user finds the perfect fit and even send gifts to surprise customers.
  • Ritz-Carlton: This luxury hotel chain is fully committed to personalized service. The staff members anticipate guests’ needs, creating memorable experiences and addressing any concerns at the drop of a hat.
  • Nordstrom: Shoppers have endless praise for this high-end department store’s unmatched customer-centric approach. Nordstrom empowers its employees to provide personalized shopping recommendations and experiences, as well as handle returns or exchanges with minimal to zero inconveniences.

These examples feature the impressive impact of human interaction on customer service. The ability to make a connection, offer individualized solutions, and foster lasting relationships is a testament to the unique strengths of human customer service agents.

 

Best of Both Worlds: Combine Chatbots and Humans

Instead of pitting chatbots against humans, many businesses are adopting hybrid approaches that leverage the strengths of both. Integrating chatbots and human CS representatives allows companies of all sizes to deliver a comprehensive customer service experience – one that combines efficiency, scalability, and personalization.

 

Examples of Chatbot-Human Hybrid Customer Service Models

Around 66 percent of customers expect an immediate response to an inquiry, but one negative chatbot experience can drive away 30 percent of customers. To cover all bases, let chatbots and humans join forces:

  • Chatbot-assisted human support: In this model, a chatbot handles initial customer inquiries and provides automated responses where appropriate. Once a concern becomes too complicated or requires human intervention, the chatbot transfers the conversation to a real human agent. This model guarantees quick initial responses and human expertise.
  • Human-assisted chatbot support: Flipping the situation, in this model, human agents support chatbots in real-time. The chatbot handles routine and straightforward inquiries, while human agents monitor conversations and intervene whenever necessary. This combination ensures personalized and empathetic assistance during critical moments, enhancing the overall customer experience.

True success lies in collaboration, not competition. By adopting hybrid approaches, businesses can balance a chatbot’s efficiency and scalability and a human’s empathy and problem-solving skills.

 

Conclusion: Should You Choose Chatbots Over Humans?

Why pick one over the other when you can use a hybrid approach? Businesses should not pit AI against humans and instead harness the power of collaboration. Chatbots offer unparalleled productivity, scalability, and round-the-clock availability, while humans bring empathy, emotional intelligence, and versatility to customer service interactions. By weighing and understanding the strengths and weaknesses of both, companies can build winning strategies.

As customer expectations continue to evolve, finding the right balance between automation and human touch becomes increasingly complex. If you need help with live chat tools or chatbot implementation, contact PrimeView at 480-970-4688.