Observation Method
The observation method involves human or mechanical observation of what people actually do or what events take place during a buying or consumption situation. “Information is collected by observing process at work”. The following are a few situations:- Service Stations – Pose as a customer, go to a service station and observe. To evaluate the […]
The Power and Perils of Influencers in a Social Media Driven World
What Makes Influencers So Powerful in our Social Media Driven World? We live in a world where social media has become indispensable and where content goes viral within no time if it engages the readers. Indeed, our lives are so dominated by Facebook, Instagram, and Twitter that we just cannot imagine a day where we […]
Cost/Price Sensitivity of Customers
Price sensitivity can be defined as the consciousness of the customers to cost windows or range within which they make dealings. All the customers are always cost sensitive and concentrate basically to buy products on cheap rates. However, cost sensitivity of a customer substantially depends on condition of the market. For example if a product […]
Managing the Sales Force
The face of any organization is the sales force. Companies spend a considerable amount of time and money on sales force rather than on any other promotional activity. However, sales force is expensive and companies are looking forward to managing them in an efficient and effective manner. Designing of the Sales Force Sales force is […]
Business Strategies to Beat the Downturn
Introduction: The Effect of the Downturn and How Companies Can Cope The ongoing global economic crisis has impacted most of the companies in the world as they have to not only reckon with falling sales, stagnating demand, oversupply, and inflation all at the same time mean that businesses are operating in “chaotic” and “uncertain” environments. […]
Log into any customer service portal and, chances are that you would come across what is known as bot that responds to you and engages you in providing answers and solutions to your questions and problems.
Even when the customer calls the IVR or the Interactive Voice Response System, chances are that he or she would be greeted with an automated voice and help system.
These are instances of how automation is taking over the Customer Service function across industries and verticals and ensuring that the firm providing the same gains from cost reductions due to elimination of the human interfaces.
While this might be beneficial to the businesses in terms of salaries and emoluments saved, but, the effect that it has on their customers, some of whom would like to hear a real human voice at the other end.
Indeed, much like everything else that automation impacts, the moot question is whether it makes customer service better or worse.
Of course, as technology evolved, successive waves of technological change ensured that humans were gradually replaced with automated response systems and bots and hence, some might very well say that this inexorable march is inevitable.
Having said that, there are many benefits of automating the customer service function.
For one, it speeds up the response times as customers no longer need to wait for their turn in everything from the front desk to IVR and Bot enabled portals.
Indeed, with Bots replacing humans, there is a seamless integration of various customer service touch points.
Moreover, automation helps businesses save costs and scale up and synergise.
To explain, Bots can be replicated across an infinite number of customer service touch points and integrate various aspects of customer service that is beneficial to them.
Therefore, businesses can reap the efficiencies from the economies of scale and the synergies from the resultant integration.
In addition, customers who do not speak the language of the service reps can be handled easily by Bots that are Multilingual and can also multitask.
Apart from this, customers need not have to deal with surly service reps and instead, chat and interact directly with automated responses that remove the friction that sometimes erupts in human to human interaction.
Thus, it is the case that automation of the customer service function has tangible and intangible benefits to both businesses and their customers.
On the other hand, interacting with Bots can be a frustrating experience. There is no scope for creativity and out of the box solutions and answers to the queries of the customers as Bots can only function in a linear manner.
To explain, supposing a customer is facing a minor problem that can easily be solved with common sense thinking.
If he or she interacts with Bots, there are chances that the interaction would go in a loop as the linearity of responses does not help the customer.
What this tells us is that technology has still some distance to cover before it replaces humans and given that AI or Artificial Intelligence is still evolving, there are downsides to automating the customer service function.
Moreover, elderly customers would still want the human touch in customer service apart from the High Value clients who need personalised and dedicated relationship management.
Of course, already these are being factored into the equation of automation as some banks now provide a Hybrid version of automated customer service touch points along with dedicated human element and relationship management.
Therefore, while one cannot escape the steady progress of technology, one can still retain some elements of the old along with the new.
Going forward, it is more than likely that the entire customer service function would be automated across industries.
Moreover, it is also likely that relationship management would be retained only for the High Net-worth Individuals and the rest would have to do with automated and Bot driven customer service.
This has several implications for society and business as we would then be witnessing a stratification of customers and creation of hierarchies based on wealth and privilege.
Already, technology, instead of levelling the gap between classes is widening it.
With even customer service being automated, it is more than possible that this layering of the customers would lead to privileges of access.
Even now, walk into an office for service and, chances are that if you are a high value customer, you would be met by your relationship manager, while those who are not have to wait for their turn.
With automation, we would be alienating those at the bottom further and chances are that when they face intractable problems that technology cannot solve, they would be running from pillar to post for solutions.
Therefore, it might need some responsible business practices before automating the entire customer service function.
Last, this ties into the overall approach that businesses must take when automating their functions and in case of the customer service function, it is better to go with a hybrid strategy rather than an all out and monochrome Bot driven method.
In addition, businesses have a social responsibility as well and it is better for them to remember this when they automate the customer service function and not act from a purely profit minded objective.
To conclude, automation makes customer service better at times and worse at times and hence, we recommend a pick and choose method for businesses.
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Some Perspectives on Software Products versus Software Services
February 12, 2025
