A recent customer service interaction offered a surprising outcome: a quick resolution and a refund, handled so seamlessly the customer wasn’t sure if a human was involved at all. This experience highlights a growing trend – the increasing role of artificial intelligence in customer service, and the mixed results companies are seeing as they adopt it.
The Rise of AI in Customer Service
Customer service is increasingly seen as a prime area for AI implementation. One company, Intercom, has developed an AI agent called Fin that handles the majority of its clients’ inquiries. OpenAI CEO Sam Altman expressed confidence that AI will displace many current customer support roles, stating, “I’m confident that a lot of current customer support that happens over a phone or computer, those people will lose their jobs, and that’ll be better done by an AI.”
However, the path to full automation hasn’t been smooth. Salesforce cut 4,000 customer service jobs last year to adopt AI tools, while Verizon launched a chatbot powered by Google Gemini. Klarna’s CEO initially touted replacing humans with AI, but later reversed course and began hiring more human agents.
The Limits of AI
Generative AI excels at certain tasks, but struggles with complexity and empathy. Experts caution that, like ChatGPT, AI-powered chatbots still require fact-checking and cannot fully replace human doctors. In customer service, AI can efficiently handle simple requests like refunds, but often falters when customers are upset or require nuanced solutions. As one observer noted, AI solutions often work “sixty percent of the time.”
Despite these limitations, job losses in customer service are occurring, both in the United States and abroad. Many companies initially implemented AI chatbots as a first point of contact, only to find that customers disliked the experience. Brad Fager, chief of research for customer service and support leaders at Gartner, notes, “The idea that you could replace your workforce is really just not viable, and it’s not even preferable…The reality is it’s just not working.”
A Hybrid Approach
A 2024 Gartner survey revealed that 61 percent of customers would prefer companies didn’t use AI at all for customer service, and 53 percent would consider switching to a competitor if they did. Gartner now believes AI will transform customer service, but that humans will remain a crucial component, often working *with* AI tools behind the scenes.
Research from MIT and Stanford demonstrates that AI can improve productivity for less experienced call center workers, offering real-time suggestions and even helping them demonstrate empathy. This contrasts with the frustrating experience of navigating AI-powered phone trees, which many customers find ineffective. Werner Kunz, a professor of marketing at the University of Massachusetts Boston, argues that many companies are implementing AI poorly, simply to appear innovative, and that this approach “destroys customer relationships.”
Intercom, the company behind the AI agent Fin, believes that a full commitment to AI offers the “instant outcomes” customers desire. Fin currently resolves a million customer queries a week with a 67 percent resolution rate, a number that is increasing by one percent each month.
Frequently Asked Questions
What is Fin?
Fin is an AI agent developed by Intercom that handles most of its clients’ customer service queries.
What does Sam Altman predict about the future of customer service jobs?
Sam Altman believes that many current customer support roles will be lost to AI, and that AI will perform those tasks better.
What is Gartner’s current stance on AI in customer service?
Gartner believes AI will transform customer service, but that humans will continue to play a significant role, often working alongside AI tools.
Ultimately, the future of customer service will likely involve a balance between AI efficiency and human empathy. Will companies prioritize cost savings through automation, or will they invest in a hybrid approach that prioritizes customer satisfaction?