Can AI With A Human Touch Help Restore Confidence In Customer Service?

A simple question, but one for the ages: What makes great customer service? From my experience – and borne out by our research over a number of years – customers value empathy, reassurance that their needs are understood, and confidence that appropriate action is being taken. Quite simply, they want a personal response and genuine care.

The rise of artificial intelligence (AI) should, in theory, help businesses provide more efficient service, supporting and freeing up employees to create better and more personal interactions. AI offers new capabilities to respond faster, personalize communication, understand connections, and spot systemic issues earlier.

Yet, despite these possibilities, customer satisfaction remains stubbornly low.

According to the latest UK Customer Satisfaction Index (UKCSI), a twice-yearly study of nearly 60,000 customers, satisfaction is at its lowest point in a decade, costing businesses billions every month in lost productivity and damaged customer loyalty.

AI of course has huge potential to improve things. However, to fully harness its potential, we need to first understand why customer satisfaction has fallen and what the real concerns of customers are.

A question of trust: do customers want AI in service?

We know that trust is becoming increasingly critical for consumers, and that there is a strong correlation between trust and customer service – our research shows that higher levels of service drive higher levels of trust.

Despite growing adoption, I’m often asked: do customers really trust AI? There are many factors keeping consumers skeptical about AI in customer service, and perhaps more so about the organisations deploying it. Some examples here are frustrating chatbot experiences, a loss of control over interactions, question marks around how data and information is being used by organisations – or indeed just a genuine preference for human reassurance around complex queries and difficult situations.

However, there are reasons to be enthusiastic about AI, if it’s implemented correctly.

Alongside improving customer interactions when implemented well, much of AI’s impact comes from enhancing the customer service journey from behind the scenes. Use cases include analyzing large data sets to predict issues, providing real-time prompts to agents handling complex cases, and helping plan and allocate resources more effectively during peak times.

Customer-facing AI adoption may continue to face some resistance, but its potential to improve service design and delivery – particularly for commonplace transactional interactions – offers hope for improving customer satisfaction in the future.

Creating faster, more efficient service

AI tools used in customer-facing roles can process vast amounts of information much faster than a person. For example, IBM reports that chatbots can answer nearly four-fifths of routine questions, providing quicker and more detailed responses than a human could.

Air India is one example demonstrating AI’s effectiveness, with nearly 97% of inbound customer queries now handled by AI, saving time and millions of dollars. AI also helps monitor interactions, analyze persistent problems, and offer real-time insights that can improve both short-term staff deployment and long-term company strategies.

On top of this, it is enabling personalized customer experiences, such as faster check-ins or tailored onboarding programs.

These are all great examples of how a strategic investment in AI can complement existing service strategies to the benefit of both customers and the organisation’s bottom line. When you consider that the UKCSI shows that service failures continue to cost UK businesses £7.3bn per month, there is a lot to be learned from successful process improvements – however they are achieved.

The Humanity of AI

Recent research by a team from Harvard and The Hebrew University found that up to 50% of participants would wait for extended periods for a human response over an AI response. Furthermore, when participants believed they were interacting with a human, they read the answers as more empathetic, even when they were actually generated by AI. So, there is something in the fact that we do as human beings trust a human response more than an automated one.

As our human response to these AI generated messages demonstrates, AI service tools have evolved beyond limited and robotic messages. AI can detect emotions, pick up on social cues, and respond with the appropriate tone. It can also deliver fluent responses in multiple languages – vital for industries like travel and hospitality.

Ultimately however, AI becoming more human raises ethical questions that business leaders need to answer. Uncertainty around the future implications of AI is forcing leaders need to make difficult decisions that may test their moral judgement. The right choices will protect their companies’ long-term reputation with customers and employees and ensure sustainable future growth.

A new age is upon us

Technology is changing by the moment and offers immense potential in unlocking knowledge and data but can be cripplingly expensive when firms don’t get it right – in fact, just recently we saw UK retailer Marks & Spencer face a £300m loss because due to a large-scale cyber-attack. And indeed, when we look at the £7bn a month estimated cost of service failings I mentioned above, some of this is undoubtedly caused by an over-reliance on AI-powered solutions.

Technology is not a panacea. The key to serving customers well – and ensuring they stay loyal, spend more, and recommend you to others – lies in understanding their journeys and touch points. It’s not a question of either/or when it comes to technology and the human interface, what matters is the context and intent behind each customer interaction.

How you make your customers feel, and whether you build or erode trust in your brand though your interactions, is what counts. As customers we are seeking reassurance that the basics will be right. We are also looking for those magic moments that spark genuine delight and get us recounting our experience to others – which in turn builds up the crucial brand affinity, trust, and reputation that truly differentiates your organisation.