The Rise of Chatbots | The MTM Agency
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A late 2023 study highlighted that 49% of consumers surveyed stated that they didn’t enjoy using chatbots during the customer experience, because they would prefer to talk to a human, or didn’t feel a bot would understand their inquiry. <anchor>Further data</anchor> reveals that customers felt that the chatbot took too long to help, could not understand or could not solve their issue.
Why do customers still prefer to call? - action.ai - Conversational Interfaces and Automated Customer Services
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# Why do customers still prefer to call?



In recent years, the priority in contact centres has been to develop digital self-service initiatives. In part spurred by the COVID-19 pandemic, these initiatives aim to empower customers to resolve their problems without the assistance of a human agent.

Human customer service agents face an overwhelming number of calls every single day. And contact centres have been hoping to cut these numbers by advancing such self service offerings. The modern contact centre is equipped with a range of tools designed to improve its efficiency: from FAQs and knowledge-bases to livechat and chatbots, customers have been offered a range of alternatives to picking up the phone.

However, if we look at how call volumes have changed over the last decade, it is clear that the impact of these initiatives have been underwhelming. Between 2014 and 2022 the percentage of customer service interactions that take place over the phone has remained remarkably stable. In 2014 68.2% of all contact centre interactions used voice channels, and by 2022 this number had fallen by only a fraction to 67.5%.



Why has this number remained so high? And is this the end of the road for contact centres who want to decrease their call volumes? In this blog we take a look at why customers continue to call and why previous attempts to automate customer service have failed. And we explain how the next generation of conversational AI technology tackles these failures head on to transform customer service.

### Why do customers want to speak to a human agent?

Examining why customers continue to call human agents helps us to understand how previous generations of contact centre automation technology have failed. The data below from Cornerstone explores, in a banking context, why customers choose to speak to a human when opening accounts. Around 40% of the customers who spoke with a human did so because they couldn’t find the information they needed online. This suggests that tools such as knowledge bases and FAQs lack the flexibility and personalisation necessary to meet the needs of customers, especially when the customer has a highly specific query or request.



Furthermore, just under 40% of customers choose to speak with a human because they thought it would be faster. When speaking with a knowledgeable advisor over the phone, customers can just speak in their own natural manner and receive an informed response from an empathetic human who knows the bank’s products and services inside and out. In the mind of many customers, this is far preferable to the time consuming process of crawling a convoluted website, FAQ, or knowledgebase for information.

### Why have chatbots failed?

To solve the contemporary problems faced by the customer service industry, we also need to understand why previous generations of automation technology, i.e. chatbots, have failed. In a large part, chatbots have failed because they do not offer a human-like service, largely because they cannot adequately understand or process requests phrased in natural language.



In a 2022 study by Userlike, around 60% of customers said that a chatbot was unable to assist them because they needed to speak to a person. While we could essentialise this fact and argue that customers are seeking some kind of intangible human touch or connection in customer service, there is also a more grounded explanation. Customers want to speak with a human because they want to express their problems using natural language, rather than rely on the keyword or menu based choices constraining them through chatbots. Without this ability to recognise and respond to normal speech, customers will continue to request a connection with a human agent.

In addition, just over 50% of customers also said that the chatbot could not solve their issue. This speaks to another failing of chatbots: their limited functionality. Often offering little more than an interactive knowledge base, chatbots cannot help customers to resolve complex requests. When a chatbot offers the customer an open text field only to fall back onto keywords and buttons, the customer is often left confused and frustrated.

### How will the next generation of conversational AI technology succeed?

The next generation of conversational AI technology aims to avoid the failures of chatbots by leveraging new advances in machine learning, natural language processing, and automatic speech recognition. This allows customer self-service solutions to more closely mirror interactions with a human agent. In short, next generation conversational AI aims to function as a digital employee, with all of the abilities of its human counterparts.

One of the most crucial aspects of this new approach is the ability to understand and respond to natural language in a human-like manner. The speech recognition technology developed by companies such as action.ai is groundbreaking in its ability to recognise interruptions, background noise, and disfluencies such as using uh and um, pausing silently, repeating words, or halting in mid-sentence to correct something said previously. Combined with natural language processing technology, such an application combs every aspect of a user’s utterance for meaning, ensuring that the customer is always understood whenever and however they speak.



This breakthrough in speech recognition is backed up by an extraordinary ability to handle even the most complex of customer service requests. No matter whether it’s helping customers to replace lost credit cards, open new bank accounts, change an address, or apply for a loan, our technology is ready to assist customers with a wide range of problems.

And, in many ways, the virtual assistants powered by our next generation conversational AI technology can be seen to outperform their human counterparts. Our technology can be online outside of contact centre operating hours, have multiple simultaneous conversations, and often hear and understand customers better than humans. This means that customers can talk to an experienced and knowledgeable agent who understands their needs at a time that suits them.

Our vision is to transform the contact centre and make waiting on hold a thing of the past. We want every customer to have access to instant, accessible, empathetic, and capable customer service whenever they need it. It is these values that inspire us to pioneer the next generation of conversational AI technology.

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