The rise of the customer service chatbot
Technological advancements in AI are continuously transforming the way companies operate, including how they interact with their customers. One clear illustration of this is the proliferation of customer service chatbots in the marketplace. In typical applications, these automated conversational agents exist on a company’s website or social media page, and either provide customers with information or help handle customer complaints. Remarkably, chatbots are expected to power 85% of all customer service interactions by 2020, with some analysts predicting the global chatbot market will exceed $1.34 billion by 2024. The cost-saving benefits are intuitive, but do chatbots improve customer service outcomes? While some industry voices believe that chatbots will improve customer service due to their speed and data synthesizing abilities, other experts caution that chatbots will worsen customer service and lead customers to revolt. Through a series of studies, we shed light on how customers react to chatbots. Our research finds support for both optimists and skeptics, contingent on the situation and specific characteristics of the chatbot.
From humanized brands to humanized bots
Technology designers often make deliberate attempts to humanize AI, for example, by imbuing voice-activated devices with conversational human voices. Industry practice shows these efforts also apply to customer service chatbots, many of which are given human-like avatars and names (see Box 1). Humanization, of course, is not a new marketing strategy. Product designers and brand managers have long encouraged consumers to view their products and brands as human-like, either through a product’s visual features or through brand mascots, like Mr. Clean or the Michelin Man. This strategy has generally been linked to improved commercial success: brands with human characteristics support more personal consumer-brand relationships and have been shown to boost overall product evaluations in several categories, including automobiles, cell phones, and beverages. Further, in the realm of technology, human-like interfaces have been shown to increase consumer trust. However, there is also evidence that in particular settings, these humanization attempts can elicit negative emotional reactions from customers, especially if the product does not deliver as expected.