Understanding the changing economics of customer service in the age of AI

We’re all aware of how the customer service function has long been perceived as a cost center rather than value driver. But with the transformative arrival of generative AI, that equation is changing, fast.

Everyone aspires to be able to demonstrate value for what they do. But while great customer service could easily show how it generated value for customers by solving their problems, it was often harder for customer service teams to demonstrate the long-term value it generated for the business.

Traditionally, the received wisdom was that as a business grew, its customer service costs would grow in a linear fashion. But now that generative AI is revolutionizing customer service through tools such as Fin, our AI chatbot, we are likely to see a dramatic change in that perception.

What are the economics of customer service?
The economics of customer service involve understanding the financial implications of providing customer support – what are the strategic decisions required to optimize the cost of your support operation versus the benefit or value that can be created by delivering great customer support.

With AI handling a greater proportion of customer issues, the balance between cost and value is undergoing a huge and rapid shift. In the latest episode of The Ticket podcast, Declan Ivory, our VP of Customer Support, and Bobby Stapleton, our Director of Human Support, unpack a lot of the implications of this new reality.

By building an AI-powered customer service platform, we are redefining the economics of customer service and consequently completely changing the potential value that support organizations can drive back into their business.

Here are some of the key takeaways from the conversation:

• Understanding the financial costs of customer service: The concept of customer support economics is a balance between the costs associated with providing support and the benefits derived from it. The aim is to achieve sustainability and align support strategies with overall business goals, ensuring that customer support adds value back into the business rather than being a cost burden.
• Impact of AI on support economics: AI technologies offer an opportunity to rethink the traditional cost structures and efficiency models by automating routine tasks, enabling support teams to focus on more complex and value-adding activities. This shift not only improves operational efficiency but also enhances the customer experience by providing timely and relevant support.
• Changing role of support representatives: With the integration of AI into customer support systems, the role of support representatives is evolving. They are now handling more complex and challenging issues, requiring stronger troubleshooting skills and subject matter expertise. This shift demands higher levels of expertise, troubleshooting skills, and customer empathy, making the role more challenging yet fulfilling. The expectation is that this will lead to reduced attrition rates as employees find their work more rewarding.
• Investment beyond AI technology: Integrating AI into customer support extends beyond merely purchasing technology. It involves a comprehensive investment in knowledge management, content creation, and the development of an ecosystem that supports AI’s continuous learning and improvement. This includes the critical role of support teams in creating and refining the knowledge base that AI systems rely on, highlighting the relationship between technology and human expertise.
• Long-term benefits of AI-powered customer service: AI technology has altered the traditional model of scaling support teams. Previously, as businesses grew, support teams had to expand linearly. However, with AI, businesses can absorb the increased workload without significantly increasing the size of the support team. This allows for more efficient scaling and cost savings.

If you enjoy our discussion, check out more episodes of our podcast. You can follow on Apple Podcasts, Spotify, YouTube or grab the RSS feed in your player of choice.