As the rise of artificial intelligence (AI) promises to transform the arenas of business, the arts and pretty much everything else, its implications for the future of customer experience (CX) continue to drive both excitement and concern.

Consider the results of a new Genesys study, conducted in late 2023 among 1,000 surveyed US consumers, called “Humans and AI in unison: Driving the new era of CX.” Among its many findings, it shows that approximately 72% of US consumers fear the growing adoption of AI-driven automation will make it increasingly difficult to reach a human agent. The worry reflects an old dilemma in the world of CX — namely, the tension between organizations prioritizing the efficiency and cost-effectiveness of increased automation and consumers yearning for the human touch that characterizes memorable and satisfying customer service.

But as bots get smarter, augmented with increasingly human-like characteristics made possible by generative AI, will that old dilemma hold true? Or will organizations that use AI properly prove to consumers that humans and AI can live (and work for you) in unison?

The Basis of Consumer Concern

The trajectory of AI in customer service has not been without its missteps. To date, many customer-facing AI solutions have been rudimentary at best, offering limited automated responses that often failed to grasp the nuances of customer needs.

These early systems, exemplified by low-end, poorly programmed chatbots and “please press 1, 2 or 3” limited IVR decision trees, continue to be deployed by some organizations and continue to frustrate their users, unable to handle anything beyond basic queries. Such experiences have led to some deep-seated skepticism among consumers, wary of replacing the expansive, empathetic capacities of human intelligence with subpar mechanical copies.

Anyone who’s used live chat support over the last decade can understand the skepticism. Who doesn’t get frustrated with chatbots that loop through the same set of questions without progressing toward a resolution?

The Genesys report proves this wariness is a real concern when it comes to the increasing use of AI for CX, with a substantial majority voicing concern over more automated hurdles getting in the way of accessing customer support from fellow human beings. The fear is clearly not just about a lack of warmth or empathy of a bot, but a genuine concern for the effectiveness and efficiency of service outcomes.

As AI becomes more prevalent in customer service interfaces, these findings pose a critical challenge for the next wave of development: ensuring that increasing automation truly lives up to its promise of enhancing, rather than hindering, both CX quality and efficiency.

Generational Perspectives on AI

Attitudes toward AI in customer service vary significantly across different age groups, reflecting a diversity of experiences and expectations shaped by each generation’s degree of interaction with digital technology. Here’s how worried the various generations feel about the possibility that increased AI adoption will make it impossible to reach a human agent, expressed as a percentage of each cohort sharing the concern:

  • Gen Z: 55%
  • Millennials: 66%
  • Gen X: 76%
  • Boomers: 88%
  • Total average: 72%

For baby boomers, there’s naturally a pronounced preference for direct human interaction, valuing personal connection and often perceiving AI as a barrier to effective communication. In contrast, millennials and Gen Z exhibit a more welcoming stance towards AI tech. It might be that these digital natives are accustomed to the speed, efficiency and availability that AI can offer. And Gen X sentiments, predictably, fall in between their boomer parents and their younger cousins.

However, the report overall suggests a growing acceptance of AI solutions in customer service as these technologies evolve. By 2030, for instance, half of all consumers surveyed anticipate they won’t care whether they’re interacting with a bot or not. And 73% of Gen Z feel this way. All cohort majorities, aside from boomers, believe that consumers will come to embrace AI-powered bots:

  • Gen Z 73%
  • Millennials 61%
  • Gen X 52%
  • Boomers 42%

However, there’s a bright side here for organizations hoping to embrace the potential of AI for customer-facing CX: all generations agree (72% overall) that as long as their issues are resolved efficiently, they don’t care if it’s done by a human or a virtual agent.

The Impact of “Dumb Bots” on Consumer Perceptions

In the lexicon of CX tech, “dumb bots” refers to early iterations of AI — if they can be charitably called such ­— that are programmed to handle only a very limited set of scripted decision-tree interactions. These rudimentary bots lack true machine learning (ML) capabilities, lack natural-language understanding (NLU) and can’t understand interaction context, let alone emotional nuance.

All of this leads to significant limitations in handling anything beyond straightforward queries. For example, a customer seeking assistance with a billing error might find themselves caught up in an endless string of irrelevant automated responses, as the bot fails to recognize or escalate the issue appropriately.

Such experiences — of interaction flows that don’t really flow — have profoundly affected consumer perceptions and trust in the use of AI for front-end customer experiences. There’s likely less concern, or awareness, when it comes to the bulk of powerful backend AI technologies, such as speech analytics, customer journey management, agent copilots, predictive routing and predictive engagement.

When dumb bots misinterpret customer intent or repeatedly fail to resolve issues, they not only waste users’ time but also diminish their patience and trust in the company’s support capabilities. This has led to the current situation — where the mention of AI in customer service tends to evoke memories of frustrating, futile interactions rather than bright hopes of efficient, streamlined support and problem solving.

These early-model bots have set a low bar for customer expectations. The dissatisfaction stemming from interactions with dumb bots has left a lasting impression, making many consumers skeptical of any AI’s ability to understand and effectively respond to their needs. This skepticism poses a significant challenge for businesses aiming to integrate more sophisticated AI solutions that genuinely improve service and support.

The Promise of Smarter Bots Using Generative AI

The dawn of generative AI represents a significant leap forward from the early, more rigid forms of artificial intelligence that once dominated customer service landscapes. Unlike its simple-minded predecessors, generative AI uses adaptive machine-learning models to generate original responses and content in real time, based on a vast amount of training data.

This allows it to understand context, adapt its responses and provide more relevant and nuanced answers to customer inquiries. For example, if a customer inquires about a complex billing issue, a bot imbued with generative AI can analyze similar past interactions and current policy information to offer a personalized, novel and informed solution.

The evolution of smarter AI bots — those powered by ML, NLU and ever-evolving generative AI technologies — promises to bridge the gap between the efficiency of automated services and the nuanced understanding typically associated with human agents. These advanced systems are designed to interpret the subtleties of human language and respond in ways that are both appropriate and contextually aware, thereby enhancing the quality of customer interactions.

The potential of generative AI to manage more complex queries effectively (and even, in some cases, passably simulate human empathy) means it can serve as a first point of contact without immediately triggering the frustration associated with earlier forms of AI self-service.

Moreover, the adaptability of truly ML-driven, AI-powered bots allow them to learn from interactions, continually improving their accuracy and effectiveness. As these systems become better at handling a wider range of customer needs, the old fear of the human touch succumbing to automation may indeed diminish.

Expanding on the latest powers of ML, new AI-powered experience orchestration platforms are combining automated efficiency with the nuanced understanding that was once the sole domain of human agents. Through an integrated suite of AI capabilities, including native voicebots and chatbots, these platforms orchestrate seamless, personalized customer journeys that adapt in real time to the evolving needs of each customer. Such systems not only respond with high relevance based on the current interaction but also draw from an extensive analysis of previous engagements, ensuring that responses are both accurate and contextually enriched.

This sophisticated orchestration will increasingly incorporate virtual agents powered by generative AI. As these bots evolve, they’ll learn to interpret and respond to the subtleties of human communication with greater fidelity, making interactions increasingly fluid and reducing the once stark distinctions between human and machine responses. Consequently, businesses will be able to deploy these advanced bots to handle complex inquiries with a level of empathy and understanding that — probably sooner than we think — will closely mirror that of good human agents.

Bridging the Gap with Consumer Education

Transparency is crucial in fostering trust and acceptance as AI becomes ever more integrated into the foundations of customer service. Businesses must be upfront about the use of AI, clarifying when interactions are AI-driven and what consumers can expect from these encounters.

According to the new report, 63% of people believe they can detect a bot immediately, and 80% say there should be a mandatory notification alerting them if they are speaking to an AI-powered bot or digital assistant instead of a human (and, by the way, the majority agree they’d prefer the bot’s voice to be Morgan Freeman’s). This statistic underscores the importance consumers place on understanding who or what is on the other end of their inquiries.

So, while your organization might pride itself on using AI that’s so good it fools customers into thinking they’re dealing with a human agent, such opacity could simply end up sowing further distrust.

To bridge the knowledge gap between AI capabilities and consumer expectations, businesses should invest in educational initiatives that highlight both the benefits and the limitations of AI. For example, informative guides or FAQs can be provided on websites and apps, explaining how AI is used to enhance service and the measures in place to ensure quality and, especially, consumer data privacy.

These educational efforts can help demystify AI technology for the average consumer, making the technology’s role and benefits more tangible. By educating consumers, businesses not only enhance the overall experience but also alleviate concerns, leading to greater acceptance and satisfaction.

Of course, you won’t know for sure until you try. Create sufficiently impressive AI-powered experiences, and it’s a safe bet that the bot-traumas of the past will be forgiven pretty quickly.

Looking Forward

As AI technology advances, future integrations are poised to further alleviate consumer concerns. One promising development is the continued enhancement of AI “humility,” or systems that can recognize when a query exceeds their processing capabilities and then seamlessly escalate it to human agents.

Such safeguards can reduce AI “hallucinations” (a problem seen in some current generation AI models, which can make things up that sound plausible enough, even if they aren’t, and seem to prefer doing that than admitting when they’re stumped). These systems can also help route inquiries more efficiently, giving complex or sensitive issues directly to the humans who can provide the necessary empathy, comprehension and problem resolution.

The new study shows that consumers still do greatly value the human touch in customer service, particularly in scenarios that require deep empathy or complex decision-making, with six out of 10 consumers being more comfortable sharing personal information with a human agent than a bot.

As we move forward, the key will be to leverage AI as a tool for human empowerment — enhancing the capabilities of human agents and enriching the customer experience. Creating a healthy, harmonious ecosystem of AI efficiency and human empathy is the key to advancing customer service standards while maintaining trust and satisfaction.

By creating and continually refining the ideal mix, businesses can cultivate a customer service environment that not only meets the demands of today’s digital-first consumers but also preserves those personal touches that build lasting loyalty and trust among all demographics.

Today, as always, the future of customer service continues to lie in finding the right balance between technological innovation and human empathy — a future where virtual and actual agents work in tandem to help orchestrate more efficient and personalized experiences that boost customer loyalty and inspire greater trust in your brand.

To delve deeper and explore how to strike the right balance for your organization, you can read the full report here.