Technological advances are often amazing, bringing new opportunities to make lives easier. But at the same time, these same innovations can create unwanted frustrations that make us question whether they were worth it. Such is the case with automated customer service prompts and chatbots. We spend several hours over the course of a year dealing with automated algorithmic lists from which we have to select different choices. And in many cases, these “doom loops” fail to get us the assistance we need. It is precisely these customer frustrations with chatbots that beckon for live customer service agents. And customers may soon get their wish.
Recently, the Biden Administration announced that a series of new policies were going to address these customer frustrations with chatbots. Under a policy labelled “Time is Money,” efforts will be made to streamline access to live customer service agents. These efforts will initially target businesses for which government oversight exists. But in time, these pursuits will expand into other government-involved sectors. Based on statistical insights, it might behoove companies to take similar actions in efforts to bolster both customer loyalty and sales. As it turns out, chatbots and automated prompts are not as efficient or as effective as presumed. In fact, they seem to be turning consumers away. Returning to live customer service agents may have some down sides. But it might be something businesses need to better achieve market success.
Rising Customer Frustrations with Chatbots
When it comes to customer surveys, it’s pretty apparent most aren’t happy with most customer service systems. Doom loop phone menus, automated chatbots, and a lack of targeted options undermine customer satisfaction. In recent surveys, four in 5 customers describe their interactions with chatbots as frustrating. Some 72% believe the use of these chatbots are a waste of their time. This further supported by the fact that 78% will still require live customer service agents to resolve an issue. On average, customers will be placed on hold or in these doom loops for roughly 13 hours each year. Clearly, this is not an efficient use of customers’ time, especially when many aren’t willing to hold for more than a few minutes.
These same surveys identified addressing these inconveniences as a top priority for nearly two-thirds of customers. Most believed companies used doom loops and chatbots to deter customers from cancelling services or subscriptions. In essence, these strategies test the patience and persistence of consumers in the hope that they will simply give up. In many cases, they do. But such a strategy is not one that builds customer loyalty and positive referrals. Instead, customer frustrations with chatbots are likely to have the opposite effect. Compared to these automated tools, it’s been noted that live customer service agents boost conversions three to five times. For some companies, this means a 6,000% increase on their ROI. Live agents also improve customer retention significantly, which offers long-term success. For these reasons, business may want to reconsider their customer service strategies.
Government Action Against the Doom Loop
Understanding and listening to customer frustrations with chatbots and automated algorithms, the federal government is taking action. Specifically, the Consumer Financial Protection Bureau has been tasked with addressing the problem. Their solution is to improve the time it takes for consumers to get to live customer service agents. Notably, they cannot enforce such actions broadly. But they can do so in institutions that involve their oversight such as banks and lending agencies. This is just the start, however, as other federal agencies are likely to follow suit. For example, the Department of Health and Human Services may require the same of affiliated health plan providers. And the Federal Communications Commission may influence phone, cable, and broadband providers to do the same. Such an enabling strategy could be more impactful as more sectors are affected.
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Of course, nothing happens quickly when it comes to government action. Turning policies into actual practical solutions and live customer service agents’ availability could take time. But the effort does highlight a move to better address consumer needs and protections at a higher level. And this is something that firms see as an opportunity for their own customer service practices. Alleviating customer frustrations with chatbots and doom loops represents a key strategy that could provide competitive advantage. Increased loyalty, retention, and referrals are advantages that could be enjoyed as a result of such actions. Weighing the costs of a new customer service approach against these benefits is important. Based on statistics, it would seem the advantages are worth the investment for many companies.
Making a Shift Toward Live Customer Service
When companies choose to invest in live customer service agents, there are notably some costs involved. Hiring and onboarding costs as well as ongoing payroll expenses will inherently increase. Compared to automation, this may not seem cost-effective in the short term. However, in the long term, as customer frustrations with chatbots decline, the potential for heightened revenues exist. This could not only cover the added expenses of live agents but far exceed them. As such, choosing to make this shift is something that demands a longer-term perspective. And it also requires a customer-centric point of view that strives to bring the greatest value to your customers.
Investing in live customer service agents doesn’t have to be as costly as it may seem. Outsourcing call centers and customer service can be a win-win solution to these problems. By outsourcing to customer service agencies, companies gain tremendous expertise and efficiencies in service. At the same time, they avoid many expenses and can better focus on their own core competencies. This will result not only in reducing customer frustrations with chatbots but also enhance overall customer satisfaction with services. Many companies are realizing how outsourcing these business processes to expert partners provides advantage. Thus, this offers a highly effective strategy to better deal with doom loop customer frustrations.
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