The Management Series

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Jan 2018

When Chatbots Work—and When They Don’t

Customer service chatbots are here to stay, but until they are more reliable—and people are more comfortable with them—you’ll need human help too.

“Many industries are in the early stages of integrating these technologies into the customer experience, and sometimes things don’t go well,” said Wharton business school marketing professor Jonah Berger in “Customer Engagement: Does Talking to a Human Still Matter?” at Knowledge@Wharton. “People get upset. They say, ‘I have to navigate this myself? That doesn’t make me feel valued.’”

Berger says that companies interested in pursuing chatbots as part of their customer service arsenal have to find a balance between human helpers and artificial ones: “The challenge for these companies is how to do it in a way that allows them to save money but doesn’t degrade the customer interaction. If people feel like they are getting a poor response, they are less likely to stay with the company.”

But companies also face pressure from the other side—people accustomed to using social media or email who prefer not dealing directly with human beings.

Chris Haerich, senior vice president of the Professional Association for Customer Engagement, which has 10,000 members representing major corporations and smaller businesses, told Knowledge@Wharton that many members turned to chatbots reluctantly.

“Some…were reticent for a long time about wanting to move to that until they finally realized that millennials were out in the workplace and becoming the customer and these were the methods they chose,” Haerich said. “It was a real eye-opener.”

Knowledge@Wharton outlines the types of problems and costs companies should expect as they rely more heavily on social media and artificial intelligence as customer service tools. But the experts they talked to agree it would be a mistake to think you could do without them forever. The savings are so large that staying competitive would be difficult.

“Bots work 24 hours a day, and they never complain,” said Americus Reed, another Wharton marketing professor.

For a deeper dive into how the client experience in brokerage is being changed by technology, check out “The Client Experience Renaissance” from Leader’s Edge.


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