Chatbots will not replace 5 million jobs, as the data suggests

Two of the biggest trends in business today are headed for a collision course.

On one hand, every major technology company is investing heavily in artificial intelligence (A.I.), promising a better, cheaper, and faster way to “engage” with consumers. Amazon Echo and Google Home allow us to engage in commerce by speaking with a machine. Facebook offers a platform for businesses to deliver automated customer support and advice through chatbots. By 2020, Gartner predicts that this type of intelligent automation will manage 85 percent of businesses’ customer relationships.

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On the other hand, most U.S. companies are actually increasing investment in employees who interact directly with consumers. With an estimated 5 million Americans employed to answer the phone, the call center workforce is huge, and it’s getting bigger — a recent Forrester survey of contact centers found that 64 percent plan to expand the number of seats in 2016 to meet demand from customers, compared with just 6 percent that plan to reduce their workforce. And these investments are paying off.  For example, cable’s recent subscriber comeback has been attributed in part to major investments in human-powered customer service.

But with two significant, yet contradictory, trends on the rise, which will prevail – the human touch or its automated counterpart? And in a world where tech giants such as Apple, Google, Facebook, and Microsoft, as well as countless startups, are investing in automation, what will happen to the 5 million employed by call centers?

Are consumers still picking up the phone?

In order to believe that A.I. will take over 85 percent of the customer relationship, you have to believe that (a) chatbots can successfully help a customer through a purchase decision and (b) an “intelligent” automated interaction between a brand and its customer is more profitable than an “authentic” human one.

There is clear evidence that certain types of phone calls to businesses are disappearing, made obsolete by apps and search engines. For example, analysis of millions of consumer-to-business phone calls in 2016 reveals that just 2 percent of calls made to local businesses pertained to hours of operation or directions. There are similar declines in calls to national call centers to check an account balance or make a payment. Smart phones have made quick work of these interactions, and, as a result, people no longer need to pick up the phone (or “click-to-call”).

So why are so many contact centers increasing seats?

The power of outstanding human service

The answer comes in three parts. First, while consumers expect digital channels to provide quick responses to facts (e.g. “Are you open?” and “What is my balance?”), we expect to talk with a human consultant for more complex, nuanced interactions or escalating situations.  An insurance policy or smartphone purchase can take 30 minutes over the phone and involve any of more than 100 common questions from a consumer, with each question building off information from the previous one.

Second, we have very little patience when automated systems don’t give us what we want immediately. For instance, when a consumer is exposed to a couple of automated questions over a phone call, or a voice command isn’t understood, the average consumer starts to freak out. Our data reveals consumers cursing frequently in this situation.

Third, a bona fide human connection is simply more profitable. When a consumer calls a business and the customer service representative answers the phone with a genuinely warm greeting, sales conversions jump by more than 22 percent!  And when a customer service team reduces hold times, total sales can increase by nearly 10 percent!

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Perhaps that’s why Zappo CEO Tony Hsieh, famous for investing in an outstanding human-powered customer service experience, says that a customer who calls for any reason has a lifetime value five to six times higher than one who doesn’t.

So, who (or what) comes out on top?

Lost in the data about volume of calls to call centers decreasing is the fact that consumers are talking on the phone longer than ever — a record 2.8 trillion minutes in 2015 — and will make nearly 100 billion phone calls to businesses from smartphones this year. In effect, consumers have an expectation that every type of communication be available — text, message, voice, and in-person.

Clearly, there is something about an authentic human connection that builds trust and loyalty in a way that a machine cannot. Perhaps it’s simply called being human.

Winning businesses will invest resources to determine when a human connection is most powerful and when digital assistance is the best route.

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And no, 5 million jobs aren’t disappearing anytime soon.