When the first complex inquiry comes up, the case is roughly escalated to a human agent, who carries on the rest of the interaction regardless of follow-up inquiry complexity. Based on this, customers are first directed to a chatbot or IVR, which fulfills simple inquiries. Self-service solutions including Interactive Voice Response (IVR) systems, chatbots and digital FAQs, provide alternative entry points, and four out of ten companies are pairing such applications with human agents in what is commonly referred to as a 'low-touch to high-touch' servicing model.

Low-touch to High-touch Service Delivery (IVR/chatbot → Human agent) Direct labor costs can range from $1.11 to $3.29 per interaction for a three-to-four minute call (Exhibit A) when the average contact center in the US handles nearly 200,000 transactions per week. As Conversational AI is not utilized, high-touch service models are very expensive for contact centers to operate on. Since the human agent is customers’ preferred service channel, we call this model “High-touch”. If we were to examine a customer service model in its most basic format, the human agent answers the phone and handles the entire interaction with the caller, fulfilling low and high complexity inquiries as they come along.

High-touch Service Delivery (Human agent only) Is there an explanation for the significant gap between expected and delivered outcomes? The answer lies with how AI is utilized before, during, and after customer service interactions. As we speak, conversational AI start-ups are advertising up to 50% cost savings and pay-back periods of six months or less.

Although, in comparison to other functions such as Human Resources (HR), Marketing and Sales, and Accounting, the gains appear to be attractive, however, they fall way short of initial expectations attached to the overall domain of Conversational AI.

When it comes to early benefits of Artificial Intelligence (AI), including cost savings, Return on Investment (ROI) and payback periods, customer service is one of the functions featuring strong gains. Contact centers have so far realized, on average, 12% cost savings and 13% ROI within nine months, the second fastest payback period after R&D.

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