Is The Call Center Dying At The Hands of Chatbots? Our Data Says ‘No’

Google+ Pinterest LinkedIn Tumblr +

To look at TechCrunch, VentureBeat, or any other tech-focused news space, one would think that the call center has perished at the hands of the chatbot. This past year, VentureBeat claimed that “implementing chatbots is all but a must in most industries.” TechCrunch lauded bots for “transforming customer service,” and Forbes went so far as to claim that “bots have revolutionized the customer service space.” Studies seem to back up these findings: Gartner predicts that by 2020 a customer will manage 85% of the relationship with an enterprise without interacting with a human, and a recent survey found that almost 40 percent of American customers would prefer to receive help from a chatbot than to wait over three minutes for a human.

But a 2018 NewtonX survey of C-level executives from multi-billion dollar companies found that the chatbot hype is seriously at odds with the reality — at least when it comes to the world’s largest companies. While many organizations are increasing investment in chatbots, the primary channel that most customers opt for — even given other options — is voice.

Billion Dollar Global Companies Won’t Be Ditching The Call Center Any Time Soon

NewtonX collected insights from 100 top executives across multiple industries. Each company generates over $1b in revenue and receives millions of customer service inquiries per year. Because chatbots have been lauded as the solution to scalable customer service, we took a look at each company’s spend and ticket volume across channels across channels, and also gathered qualitative opinions from top executives on how well this spend has been paying off.

customer service catbots

Voice is the Most Economic Channel

Across industries, the vast majority of customer service tickets come through voice, even though all but one of the companies surveyed offered numerous other channels for contacting customer support. While a Senior VP at one company noted that “We have made significant investments in chat,” they also reported that “IVR has the most traction and captured most of the investment.”

It’s no wonder, considering that for the majority of these large corporations voice has the highest ticket volume and the lowest cost per hour. Chat, social, and email all cost 40% or more as much as voice on an hourly basis. This discrepancy is due to a combination of high technology costs and higher investment in personnel. Some executives noted that for social in particular they spend dramatically more on sophisticated talent. One such C-level leader noted that a poor response to a customer support query on social has the potential to go viral and cause irreparable brand damage.

Customer service was a major source of spend for every single company included in the survey — in fact, no company spent less than $10m annually on CSS (including people, technology, and any other associated costs), and 70% of companies spent dramatically more on people than on technology. This means that there is ample potential for technologies that streamline and automate aspects of the customer service funnel. While chatbots have clearly not lived up to this potential (at least for large organizations), it is likely that in coming years we will see ticket volume grow and cost decrease as a result of higher customer adoption.

Customer Satisfaction by Channel and Industry

Only 10% of companies reported higher CSAT ratings for chat over voice — contrary to what many recent surveys have claimed. We furthermore found high CSAT ratings for voice (80% or higher) across every industry except for Hospitality — findings that make sense given the prevalence of self-service in the Hospitality industry.

The CSAT ratings by channel were particularly interesting given that one of the chief value propositions for chatbots (and chat in general) is that customers prefer to communicate via chat. Indeed, chat is hugely popular: In 2017 there were 1.82 billion mobile messaging app users worldwide, and that number is expected to grow to 2.48 billion by 2021. But the prevalence of messaging does not necessarily translate to a preference for the medium in the context of customer service. Pew Research found that teenagers report that they text/message more than they make voice calls, but they also noted that voice calls are reserved for their best friends and those closest to them. In other words, even for the most messaging-friendly generation, voice communication adds a level of intimacy that is appropriate in certain contexts. Considering how emotionally charged many customer service interactions are, it’s logical that many customers would default to the most personal level of communication available.

What All Of This Data Says About The Future of The Call Center

The vast majority of data available on the customer service industry focuses on the customer’s side — what customers want and why they want it. This report is unique in that it reveals what’s happening on the company side, and why the biggest organizations don’t think chatbots are the holy grail of customer service just yet.

In fact, two organizations surveyed reported that they invested in chatbots but ended up having to cancel their release. One of them, a Financial Services company, reported that they would embrace a viable chatbot solution that meets four criteria:

  1. Customer friendly
  2. Secure
  3. Positive ROI
  4. Human Touch

The interest in the potential for an ideal chatbot was not limited to this company. Across industries and companies, there was a common trend: leaders are interested in investing in chatbots, but thus far have not seen compelling enough ROI to push chat over other channels.

The chatbot hype tends to hide certain limitations that large companies cannot afford — namely:

  • Urgent/emotional requests (particularly financial ones)
  • Customer literacy (technological and linguistic)
  • Efficacy across dozens of languages

While a small startup servicing highly technical clients in the U.S. may be able to roll out a customer support strategy that is heavily reliant on chatbots, for large global companies chatbots are still not a viable replacement for IVR or the call center in general.

Looking Forward: Where The Industry Is Moving

While the hype may be disproportionate with the reality, we still found that across industries large companies are interested in investing in AI and chatbots. Considering that the top trend that leaders identified was the growth of live chat, finding an automation solution to make chat scalable will be necessary. In ten or twenty years, these organizations will likely have implemented a chat workflow in which both bots and humans interact with customers. Chatbots certainly have the ability to enable better human-human interactions, and as global consumers become more accustomed to communicating with companies through this medium, we will see chatbots play a similar role to that of IVR in call centers.

According to a JLL 2017 report on contact centers in the U.S., the number of contact center jobs opening up has risen over the past five years, and one of the chief trends is jobs moving from overseas back to The States. It’s no wonder that hype around a potentially efficiency-enabling technology in this industry has grown. But while chatbots are certainly interesting and have potential, they are not at a point where they can improve processes for large corporations with huge ticket volumes. For these companies, the call center is not going to disappear any time soon.


The data and insights in this article are sourced from NewtonX experts. For the purposes of this blog, we keep our experts anonymous and ensure that no confidential data or information has been disclosed. Experts are a mix of industry consultants and previous employees of the company(s) referenced.


About Author

Comments are closed.