Yes, the past few months have brought incredible advancements in the capabilities of AI. These improvements also beg the question if AI is the end-all and be-all solution to customer service.
We’re moving our lives online more and more, daily. In 2022, Americans aged 18 and over spent an average of 270 minutes a day on their phones; on non-voice activities. Americans also check their phone ~344 times a day, and 70% of them within 5 minutes of getting a notification.
We see why it can make sense to just drop phone as a support channel and focus on the “new best thing”: chat. You can implement chat via AI; making it faster, just as accurate, and simply better, right?
Well, it’s not that easy. AI has well earned its place in customer service. Actually, SupportNinja's co-founder, Connor Tomkies, recently spoke about how ChatGPT is changing the customer support ecosystem.
Thing is, there’s a little keyword in there: changing – not replacing. Let’s delve into that.
Summary of key points
- Yes, setting up ChatGPT is less expensive than hiring a support agent. However, this only serves a strategy focused exclusively on keeping costs low.
- Despite what we tend to believe because of being always-online ourselves and connected to social media day-in and day-out, not all customers rely on digital channels.
- In 2020, 66% of customers (from a pool of 13,000+ respondents) wanted an emotional connection from brands. They wanted empathy. Phone is simply the best and easiest channel on which you can achieve this. As impressive as AI is, you can’t code feelings.
- Phone most accurately emulates the traditional in-person communication experience. Fun fact: words are a mere 7% of communication; vocal represents 38%.
- What’s more, 42% of US customers preferred using phone as their go-to support channel in 2020. This is despite most of us having been cooped up in our homes, with our laptops and phones readily available, everyday.
- Also in 2020, 74% out of 13,000+ customers used multiple support channels even for a single transaction. While a customer might’ve looked for a self-service or chat option first, there’s a good chance they eventually wanted or needed phone support too.
- The US’s population was made out of ~21% Baby Boomers, and ~20% Generation X in 2021. Both generations have a strong connection to voice as a preferred support channel.
- Later in the article, we take a look at the importance of live support via a case study of Epic Games Inc, an American company with a $7.6BN net worth in Q3 2022. It is projected that they risk losing up to $750MM by 2027 on one of their products, in part because of support issues.
Why are businesses considering dropping phone support?
All companies want to improve their profit margin – there’s no ambiguity about that. If the only argument around providing phone support, or not doing it, are immediate cost savings, the answer is very obvious.
And, in many cases, that is the only argument being discussed. However, that’s a limiting perspective.
Yes, setting up ChatGPT or your favorite chatbot is less expensive than hiring a support agent.
There’s also no training involved, no salary, no overhead, no retention to think about. As far as costs go, an automated chat option is at the very bottom of the cost hierarchy. Image it along these lines, from most to least expensive:
In-person → Live phone support → Live chat support → Live email support → IVR phone support and/or automated chat support.
If the main point of your long-term strategy is to keep costs really low, without wanting to focus on personalization, phone support won’t fit the bill.
The problem is that such a long-term strategy will actually quickly prove to not be effective. Despite what we tend to believe because of being always-online ourselves and connected to social media day-in and day-out, not all customers rely on digital channels.
In fact, a very big portion of US customers prefer phone over anything else – but more on that later.
Why you shouldn’t drop phone support
Customer experience (CX) is the name of the game. The world is more and more globalized every single month, forget about years. Products and services that were rarities or at least uncommon at some points are now readily available; from multiple vendors, at very similar price points.
What drives sales right now, and what will continue to do so, is showing that your company genuinely cares for its customers. For example, check out this 2020 consumer research report from Salesforce.
Among very many interesting findings, they also reported that 66% of customers (from a pool of 13,000+ respondents) want an emotional connection from brands. They want empathy; to feel understood, respected, and looked after.
Phone is simply the best and easiest channel on which you can achieve this.
As impressive as AI is, you can’t code feelings (not yet?). When a customer wants to speak to support, it’s often the case that they’re confused, worried, or even angry. They want you, the business, to provide a resolution ASAP.
It boils down to 3 key aspects:
- Success – the customer wants to achieve their goal.
- Effort – the customer wants a simple, straightforward experience, where minimal to no input is needed on their part.
- Trust – when the customer engages with your brand, they expect you to leave them feeling good; this is actually them showing they trust your professionalism, and you must deliver.
On top of this, you should also consider that the customer’s issue might be complex, which makes it more difficult to tackle via email or chat. For an AI, if the complexity is outside of its defined parameters and knowledge base, it’s impossible to solve.
Phone is also the support channel that most accurately emulates the traditional in-person experience. Let's talk about why that is important.
How phone prevents “spicy” scenarios
We’re guessing you’ve noticed that overall, people get aggressive or drop their best behavior way quicker when online. Customers' patience towards support has also grown increasingly thin over time, with even slight “offenses” sometimes triggering powerful reactions.
This isn’t helped either by the highly digitalized age we’re in. Every customer, not to mention those with a following, has 2 very simple methods of tarnishing a brand’s reputation: social media, and review websites.
However, rewarding such customer behaviors (when unjust) only sets an example for others to follow. Soon enough, the business will find itself in a very deep, very costly hole.
Actually hearing another voice on the end of the line though helps prevent such negative outcomes – that’s just science. Words represent a mere 7% of communication, with vocal adding another 38%.
By just having a phone line, you’re improving the quality of a customer’s support interaction by 38%! It’s about the other person’s voice, their inflections, their tone, even the simplicity of knowing for sure you’re talking with another real being that has the ability to understand you’re upset.
It drastically aids with calming down a customer and finding a mutually beneficial solution.
Modern technology is a very new thing compared to how our brain processes conversations. Has it ever happened to you to misinterpret someone’s message, not get a joke, or feel the other person is being unempathetic, just because you were talking via text?
Well, that’s the explanation. The majority of communication is non-verbal (55%!), and live phone support is the only channel that replicates as much of natural communication as possible; the type of communication that would happen in-person.
Introducing: the amazing 42% trio
We’re not saying that phone is inherently better than any other support channels – not by a long shot. We’re just saying that the popularity of phone customer support hasn’t gone anywhere. What it used to do really well, it still does very well.
Yes, some customers highly prefer another channel, or outright won’t ever pick phone. These customers exist, and that’s why having an omnichannel strategy for your business is imperative.
Our point is that you shouldn’t forget to include phone in that omnichannel. And to that extent, check out this next bit below.
So, this is either a very amusing coincidence, or some sort of communication attempt from the disembodied essence of CX itself (we’ll leave the final interpretation up to you):
- 42% of US customers preferred using phone as a support channel in 2020.
- 42% of the US’s population were digital natives in 2021.
- 42% of respondents (out of 401 people) for a recent poll we did on LinkedIn said their customers rely mostly on phone as a support channel.
How can we reconcile these findings? Quite easily, actually. Support channel preference is highly generational too.
Popularity of phone support across generations
A person’s generation has a powerful impact on their opinion of phone support. In the US, there are currently 4 generations of consumers active across markets (2021 data):
- Baby Boomers (~21% of the US population)
- Generation X (~20% of the US population)
- Millennials (~22% of the US population)
- Generation Z (~21% of the US population)
Together, Millennials and Gen Z form the “digital natives” group. In other words, people who were born into an already technologized world. So, in total, you do have a much bigger pool of potential customers who are highly digitalized, depending on your industry.
Right now (March 2023), the youngest Gen Z member is already at least 10 years old, and the oldest at least 25 years old. However, you cannot ignore the very sizable audience of Baby Boomers and Gen X either.
Even today, Baby Boomers prefer in-person support over anything else, because many of them grew up in a period where that was the norm, or the only option available. As we already explained above, phone support is the only next best option, and it should be 24/7 too, according to the Baby Boomer’s expectations.
Generation X is walking “the line between worlds”, if you will. They remember a world before the internet and digitalization. However, the oldest were only in their early 20s when mobile phones and personal computers became a thing, and in their 30s during the 1990s.
They saw the informational and commercial barriers between countries starting to break worldwide, thanks to the internet and digitalization. They’ve lived in both “ages”, adopting tech as it developed, so support channel preferences can lean either way.
Millennials are the first to grow alongside the internet. It took shape and became the powerhouse of today as millennials got older. However, they adopted it from an early age, and saw it morph along the years.
That’s why they’re the first “digital natives”. The internet’s growth was part of their childhood and teen years. They understand the world without it, but are highly against the idea.
Millennials are why social media, digital ads, and ecommerce are core things today. They also grew alongside the immense databases and other sources of information of the internet taking over the world, so self-service is an important priority.
So, to be fair, this is where phone support starts dropping in importance for US customers. Email and chat have a higher importance for millennials, and chat is often treated as an asynchronous channel too.
It gives the liberty to contact support and then check back on a reply when convenient. Because indeed, convenience plays a key role for millennials – phone support involves holding time where they’re prevented from doing something else, and agility matters to millennials a lot.
And here we are – many members of Generation Z don’t know the world without the internet. They were exposed to influencer marketing, social media, and digital ads from an early age. For entertainment, they watched YouTube, not TV.
What sets them more apart from Millennials though is a sense of mindfulness that they developed from having access to unrestricted knowledge and information from the start.
So, they’re predisposed towards preferring businesses with ethical practices and even more care towards their customers. With Generation Z, we can start talking about the importance of omnichannel, as you can’t be sure where they would rather reach you – you can be sure though that it’s highly likely to be online.
So, your business must communicate a very cohesive message across all the channels you use for both advertising and support. Both Gen Z and Millennials want to see your company actually making an effort, and they’re pretty good at telling if you’re being insincere.
Phone vs. other support channels
You don’t have to think about support channels with an “either/or” mindset. We’re big believers in phone support as a channel with a unique offering, but it should definitely be paired with others too.
Especially if you get a high number of inquiries a day, it’s recommended you also have an IVR or chatbot filtering system.
But, that’s the key. Automation is amazing for filtering and solving low-effort issues. What automation should not be is a blocker; don’t use AI in a way that stops the customer from reaching you, if they feel that only a human can address their needs. You’ll only lose that customer this way.
It’s all about balance, and understanding how the pieces fit into that balance. For example, in our LinkedIn survey from February 2023, 34% answered that their customers depend on chat support, and 21% said email is the key.
What you’re selling is the main piece of the puzzle though – which generation(s) are you targeting? Think of that first, and of their preferences. Still, you usually shouldn't skip phone support.
You’d maybe think that you’re off the hook if digital natives are your audience but…not quite. Being internet-first people also means that they have the shortest amount of patience, being used to information and results happening on-demand.
That’s why before anything else, they’ll look for a self-service option. If that’s not available, they’re likely to actually choose third party options before reaching out to you directly. That can already be problematic.
So, get self-service up and running, but, in case that’s not enough, your self-service should then point them to phone support as the best way of resolving the issue. And there you go; another customer pleased, another lifetime value raised.
The answer is more support, not less
In 2020, 74% out of 13,000+ customers used multiple support channels even for a single transaction. And, that makes total sense. Depending on the nature of a question, the “best” customer service channel is going to be different.
For example, guidance for a SaaS product will be given a lot easier over the phone, than via chat. However, the shipping status of an e-commerce order can be provided just fine by even a chatbot.
Thing is, if an order is affected by special conditions, the chatbot’s capabilities will no longer suffice to offer the best possible CX. Let’s say someone had a recurring order of pet food, but they need to cancel it now because their pet passed away.
They fill in the automated cancel form, and for the cancellation reasons, they choose “other”, specifying their pet passed away. With an AI, that’d be that.
However, an actual human agent can take that chance to email the customer offering their condolences, or even send flowers on the company’s behalf!
By the way, this is a real story from the CX innovation webinar that our CEO was part of.
Why live support matters - case study
Epic Games Inc. is an American video game developer & publisher. Most notably, they made, published and own Fortnite, a video game that generated $5.8BN in revenue in 2021.
Epic is also the developer of Unreal Engine, one of the most widely used video game engines globally. Their overall gross yearly revenue is estimated to reach $6.5BN by the end of 2023.
Fortnite made them really well-known worldwide, but they had already found great success in the video game development industry thanks to Unreal Engine.
After Fortnite’s very successful launch in 2017, Epic also launched their own digital store in 2018, where they sell a variety of video games, as well as digital items for Fortnite.
Unlike Fortnite though, which mostly targets young teens, the “Epic Games Store” (EGS) digital storefront is intended essentially for everyone. It’s just a place to buy different video games.
How issues began
Fortnite had huge success because it's tailored very well to its audience. The thing is, Fortnite has a core audience that’s unlikely to look for customer support, being very young, or not realizing that such an option exists.
The Epic Games Store, however, caters to all age groups. Eventually, the adult users of the store ran into some technical problems (such as wanting refunds, getting locked out of their accounts, or facing difficulties with purchasing games for their children, from a parent account).
Right now, the store’s customer support is offered exclusively through email. There is no live chat, no phone support; just email. This led to some displeased customers. EGS users reported that they were facing long waiting times, escalation requests getting declined, and resolutions that weren’t exactly what they were hoping for.
This goes to show that live support is crucial. When customers face issues such as having an account where they’ve potentially spent hundreds or thousands of dollars become inaccessible, as reviews on Trustpilot point out, they don’t appreciate email being their only option.
This is precisely when phone support shines brightest.
You might be wondering “ok, but why is their revenue still going upwards then?”, and that’s fair.
Epic is making money as a company, true. However, the Epic Games Store is not.
Epic declared themselves that EGS is not profitable, and that they don’t expect profitability until 2027. It’s estimated that EGS will likely lose as much as $750MM before any profit is made. An important part of this turn of events is that customers do not have access to all the support channels that they want available.
Let us be very clear that the purpose of the example above is not to bash Epic Games. We simply wanted to showcase just how important having live support can be.
There’s also the relevant reason that I, the author of this article, am quite into video games. So, the situation was known to me.
And yes, while you could say that live chat is also a solution here, phone is the easiest channel to solve such concerns.
Issues like losing an account on which you’ve spent a lot of money generate a lot of psychological and emotional discomfort for the customer. Access to a live support agent, and the certainty that a real person is working on your case at that very moment, is hard to beat.
At SupportNinja, we’ve been dedicated to creating meaningful customer experiences since 2015, be it via live support, or any other means that customers prefer.
Our clients come for all walks of business: from e-commerce, to SaaS, to fintech/banking, healthcare, rideshare, and many more.
We genuinely wish to help companies grow seamlessly. We’ve seen countless support teams in need of capacity or streamlining before, and our global approach to outsourcing was the answer.
Together with our partners, we delight customers around the clock with data-driven processes and customized experiences. Great customer service is hard, but with the right team it can be easy.
Whether you’re looking for phone support, or another support type that your customers might prefer, we’d be glad to assist.