The promise–and pitfalls–of conversational AI: Do consumers think it helps brands deliver better CX?

by | Apr 10, 2023 | Public Relations

CX leaders are increasingly turning to conversation AI to boost their customer service issues, which have become top priority in the post-pandemic age as the top-to-bottom customer experience has emerged as a leading factor in purchase decisions across B2B and B2C industries alike. As we know, things haven’t exactly worked out as planned so far.

A significant majority (75 percent) of CX leaders have adopted AI tools to improve customer support and overall experience, but new research from cloud contact center firm Talkdesk affirms that

big barriers have resulted in many cases of frustrating service experiences with chatbots, and consumers still say human agents are more than twice as likely to resolve their issue vs. an automated system.

The promise--and pitfalls--of conversational AI: Do consumers think it helps brands deliver better CX?

“AI has recently been catapulted into the spotlight thanks to large language models like GPT-4, but AI and chatbots have long been a core part of CX departments. As these tools become more advanced, they are taking on a bigger role in customer service processes—to varying degrees of success,” said Charanya Kannan, chief product, engineering, and customer officer at Talkdesk, in a news release. “As today’s economy drives labor and skills shortages that hinder CX, it’s more important than ever that companies not only invest in automated tools, but design these solutions in a way that truly simplifies and streamlines customer experiences—therefore mitigating frustration and driving loyalty.”

Cost-conscious CX teams are investing in self-service automation amid economic troubles

Following two years of a booming economy, today’s CX teams are tightening budgets and looking for less expensive ways to scale their operations. As a result, many CX leaders are looking to automation as a means to boost CX while also reducing operational costs. According to the new report, the top challenges hindering CX teams’ goals in today’s economy are rising costs (61 percent), and frontline staffing and skills shortages (57 percent)

In order to contain costs or scale to meet demand with less human agents, many CX leaders say they are investing in natural language-based chatbots (35 percent) and voice-based virtual agents (40 percent) in the next six months.

The promise--and pitfalls--of conversational AI: Do consumers think it helps brands deliver better CX?

Conversational AI has massive potential when designed properly

The future of customer service hinges on AI-driven self-service tools that simplify customer experiences. Despite AI seeing significant advancement and driving improved CX in recent years, many companies are still missing the mark with their deployments and delivering poor experiences by either using older technology or through inadequate conversational design.

  • Less than one-fifth of consumers report that their most recent customer service interactions included a chatbot (18 percent) or a voice-based AI assistant (11 percent). Most consumers still prefer managing customer service situations through live phone conversations (47 percent) or live chat (31 percent).
  • While roughly half (48 percent) of consumers are comfortable using AI tools to resolve customer service issues, they find these channels simply aren’t as effective as speaking directly with a live agent. In fact, the report finds human agents are up to 2.7 times more likely to resolve an issue on first contact as compared to an AI system.
  • The good news is that consumers are willing to try again with AI agents, as long as companies are able to improve efficacy. Nearly two-thirds (64 percent) of consumers say they would interact with an AI system if it means they can arrive at a faster resolution.

The promise--and pitfalls--of conversational AI: Do consumers think it helps brands deliver better CX?

Realizing AI’s potential in the contact center will require CX teams to take the following steps:

  • Optimize new AI tools with good conversational design
  • Implement a fallback mechanism in virtual agents
  • Provide a way for customers to opt-out and connect with a human agent
  • Continuously improve virtual agents through testing and training
  • Reimagine virtual agents with GPT and large language models

Download the full report.

This report contains insights from three separate respondent pools:

Survey 1, entitled 2022 Talkdesk Consumer Insights Survey, was fielded in August 2022 to a sample of 1,003 consumers based in the U.S. and UK with at least one customer service interaction in the previous year.

Survey 2, entitled 2022 Talkdesk CX Professional Survey, was fielded in July 2022 to a sample of 301 professionals based in the U.S. and UK. CX professionals included customer experience, customer service, CX operations, and IT and were employed by organizations across a range of industries with at least 100 employees.

Insights were augmented by three focus groups with 29 U.S. consumers to understand what specifically is frustrating about experiences with virtual agents and chatbots. All 29 respondents attested to having had an interaction with an AI or automated system in a customer service scenario within the previous seven days.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter