AI vs. Human Customer Service: When Do Consumers Prefer a Bot?

AI vs. Human Customer Service: When Do Consumers Prefer a Bot?

Artificial Involvement: A Look at whether humans prefer artificial intelligence and chatbots over human interaction

Chatbots and other AI-assisted customer service tools are on the rise as an efficient, automated way to improve customer journeys, but few studies have asked U.S. consumers how they actually feel about talking to machines when they need help. A new Arm Treasure Data survey of 1,000 adults recently did just that, asking how people feel about AI assists in fields as diverse as medicine to retailing. The industry-to-industry differences are surprising, providing insights to a trend that is rarely examined, but growing rapidly.

The economic case for bots is clear: No matter how big a company is, it’s virtually impossible for business owners to stay connected to their clientele 24/7. Whether providing necessary customer support for existing clients or capturing new leads, business owners can spend their entire workday managing these communication channels and still struggle to keep up.

Enter the ever-growing use of chatbots. With minimal supervision, chatbots can capture data from prospective customers, help answer frequently asked questions, and even provide recommendations or customer support depending on the software or industry. One analysis found that the global Chatbot market is expected to grow 8.6 times its valuation of $1.17 billion in 2018 to $10.08 billion by year 2026.

Some analysts even believe chatbots (and the evolving capabilities of artificial intelligence) could revolutionize industries and propel companies to new levels of success.

For a more extensive look at consumers’ use and reception of chatbots, we polled 1,000 U.S. adults about their interactions with artificial intelligence. Keep reading to see how many customers prefer electronic systems to human operators, how common chatbots have become in certain industries, and how many U.S. consumers go out of their way to avoid in-person interactions.

For our analysis, electronic systems are defined as an automated, artificial intelligence, or textual response system, serving as a customer service representative. This includes but is not limited to chatbots and automated answering systems.

Consumer Preferences

The benefits of chatbots and electronic systems for businesses are relatively straightforward: less time spent monitoring communication channels, less expensive customer service solutions, and even the ability to grow by converting potential customers.

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Human vs. non-human?

But what about the benefits to customers? Experts suggest AI-powered chat services offer quicker turnaround for consumers, easy answers to more complex questions, and can even offer recommendations. According to our survey of 1,000 U.S. adults, only 1 in 5 respondents preferred electronic systems to human interaction.

Consumer Interactions

Not all industries employ artificial intelligence or electronic systems with the same level of enthusiasm. We didn’t find any industries relying entirely on electronic systems, but many employ both chatbots and humans. Industries more likely to use a combination of automation and human engagement include: Banking/credit unions (44 percent), government agencies (43 percent), insurance companies (about 40 percent), and hotels/motels (nearly 32 percent).

The current state of electronic systems and human interactions

In an average six-minute customer service call, 75 percent of the time is devoted to manual research and just 25 percent to customer interaction. In situations where businesses successfully employ electronic systems and humans, self-service technologies can manage the bulk of “routine” requests so that customer service agents can focus on more complex engagement.

How automated do we want each industry

Consumer Desires

Despite the growing popularity of telemedicine, people preferred fully human interactions with veterinarians, dentists, and doctors. In contrast, people most preferred taxi services (15 percent), airlines (nearly 13 percent), and hotels/motels (almost 10 percent) to be fully automated.

We’ve already seen what can happen when a seamless automation process enters the market. The introduction of automated ride-hailing services disrupted the entire taxi industry. Customers now expect to easily request transportation (often with little personal communication necessary), a trend that in the future may include self-driving vehicles.

Why we prefer AI or Human

While 73 percent of Americans said electronic systems failed to connect them to the correct department or customer service representative at least once, many expressed a preference for automated communication in certain circumstances. Among respondents who preferred electronic systems, more than 1 in 3 cited efficiency and spending less time on hold as the primary benefits of the service. 

Nearly 1 in 4 respondents also identified faster resolutions as a benefit of using electronic systems, although more than half preferred human support because agents provided quicker resolutions. Similarly, a better understanding of customer concerns (72 percent) and more thorough explanations (59 percent) were the biggest advantages of human support.

The Future of Automation

As consumer adoption and acceptance of chatbot and other electronic systems grows, the use of artificial intelligence within these systems is likely to increase and improve. As some technology experts warn, customer service isn’t the only position in danger of being fully automated. According to one study, as many as 1 in 4 jobs across the United States might be taken over by artificial intelligence in the coming years, and some industries could be completely overhauled by 2030, including insurance underwriting, warehouse jobs, data entry, and pharmaceutical discovery.

Top jobs we would want automated

Three industries ranked the highest as jobs customers would like to see automated: bankers (46 percent), accountants (42 percent), and travel agents (40 percent). On the topic of travel, consumers may be more inclined toward automated booking and planning less as a matter of convenience and more as a matter of cost savings.

In-Person Interactions

While the majority of purchases still take place at brick-and-mortar locations, online shopping continues to grow. One milestone this year took place in the month of February 2019. For that month, online shopping took a higher percentage of the total market share for the retail category of general merchandise sales in the United States for the first time. Over the last two decades, non-store sales (including those by e-commerce giant Amazon) have reshaped the retail landscape, forcing the closure of some long-standing brick-and-mortar stores in recent years.

Beyond the obvious conveniences of shopping online, nearly 2 in 3 consumers admitted they preferred to shop online to avoid human interaction.

Avoiding in person shopping

Although highest among Millennials (68 percent), 63 percent of Gen Xers and 50 percent of Baby Boomers opted to shop online rather than interact in the physical retail world. Thirty-five percent of those surveyed said they spent more money shopping online than in-store, and 58 percent said feeling lethargic or lazy was a major factor for avoiding brick-and-mortar stores.

Keeping The Doctor Away 

Digital health services may be gaining in popularity (and availability), but this is one segment of electronic services consumers may feel less inclined to adopt.

Even if electronic systems aren’t the best solution right now, there are still many reasons Americans put off seeing their doctor. Largely based around a question of trust, some analysts suggest a lack of clear and transparent communication (including conflicts of interest) combined with the rising cost of health care are among the biggest factors to this growing shift in confidence.

Avoiding the doctor

Consumer Desires

Almost two-thirds of respondents admitted they forgo doctor visits to avoid human interaction, and 39 percent of Millennials reported abstaining from visiting a physician to avoid face-to-face interaction. Of those who put off seeing a doctor because of the human element, 48 percent acknowledged their medical issue was serious, and 34 percent said that issue only worsened with time.

The Future of Artificial Intelligence and Consumers

Artificial intelligence continues to grow exponentially, and the economic benefits it provides to businesses and consumers alike will only continue to drive the demand for these services. Yet how people feel about AI and chatbots can also influence businesses, so it’s important to understand how AI affects how people feel about their customer journeys and the companies that are most aggressively automating their customer-facing interactions.

We found that in every industry we examined, people reported interacting with electronic systems at least some of the time. Some even showed preference for interacting only with fully automated systems. As consumers inevitably interact more and more with these automated systems, we wonder: How will this change life in the near and distant future? The answers aren’t yet entirely clear, but it appears from this Arm Treasure Data survey that many U.S. consumers are at least open to new possibilities.

Methodology

To explore the level of involvement and desire for artificial intelligence in our everyday life, we launched a survey on Amazon’s Mechanical Turk survey platform. The survey was comprised of 25 questions and was answered by 1,000 qualified individuals in the U.S., including 543 men and 455 women. Two respondents did not specify gender. The mean age of respondents was 37. Any respondent not correctly completing an attention-check question was excluded from our survey results.

Limitations

The data presented in this project rely on self-report. There are many issues with self-reported data, including selective memory, inaccurate memory, and over- or under-exaggeration.

Fair Use Statement

Does the impending implications of artificial intelligence interest you and your readers? Feel free to share the information found throughout this page for noncommercial purposes. When doing so, kindly share a link back to this page so that your readers may explore more on the topic.

Tom Treanor
Tom Treanor
Tom Treanor heads up marketing at Arm Treasure Data. He focuses on marketing, martech, CDPs and digital marketing. Follow him on Twitter @RtMixMktg.
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