AI Customer Service: The Promised Land or a Pitfall?

May 28, 2024

Read time: 6 minutes



One of the best sources of data within a business is the insights from customer service. Yet, in many areas, this doesn’t seem to be highly prioritised. We've all experienced the frustration of navigating the overcomplicated automated telephone customer service labyrinth, only to hit a dead end and have to start all over again.

Companies spend crazy amounts of money trying to understand their customers through various means, only to funnel them into automated systems wherever possible.

AI is set to do two things in this scenario:

  1. Allow companies that see automation as the answer to every customer interaction to extend this approach even further, distancing themselves from their customers.
  2. Provide companies with more bandwidth to actually talk to their customers by using AI strategically within their business.

The latter approach will create an advantage by increasing brand loyalty and insight.


The Promised Land

Imagine the utopia of customer service automation through AI. The example below shows this ideal with a product called Air AI, where an entire phone call is handled by an AI agent:


That sounds great. But it's a demo, so what’s the reality?


Air AI Customer Service Test

Karston Fox tested the Air AI customer service offering and shared the results on his YouTube channel. He set it up alongside a human cold caller to see who performed better. The AI was given the same script as the human and was let loose on some prospects.

The AI managed to get through 200 calls in about 30 minutes, but some calls didn’t quite go to plan.

Skip to 2:30 if you want to get straight to the bad AI calls...




AI-Powered Customer Service - Almost Great

LinkedIn influencer Tom Goodwin thought he'd been very well looked after when talking to a customer service team at a car dealership. He emailed them to book a test drive and was pleasantly surprised by the swift email responses.

He quickly scheduled a test drive and headed to the dealership, only to find that they weren't aware of his appointment and the car he wanted to test drive wasn’t in stock. The initial conversations were all handled by AI, which he didn’t realise.

However, the lack of integration with their internal systems and unmodified team processes resulted in a frustrating experience and a lost customer


Lessons from the AI Chatbot Front Line

The main lesson here is not to hand over customer service or complete roles to an AI product or agent just yet. The technology isn’t ready, and people are increasingly aware of these applications. To use AI successfully, you need to identify the repetitive tasks it excels at, ringfence those, and train a model to deliver high quality responses. This should then hand off to another system or human at the relevant point. Additionally, all affected teams need to be trained and educated.

Integration is Key

  • For a smooth experience, chatbots and virtual assistants need to connect with internal systems, like inventory management or appointment scheduling.

AI ≠ Replacement

  • AI excels at automating tasks and handling routine inquiries, freeing up human agents for complex issues. Humans provide empathy, critical thinking, and the ability to build rapport, which are crucial for exceptional service.


Who’s Experimenting With This?

Walmart, a retail giant, is at the forefront of integrating AI to streamline its customer service operations. By leveraging AI, Walmart aims to enhance the customer experience while improving efficiency and reducing operational costs.


AI-Powered Inventory Management

Walmart has implemented an AI-driven inventory management system to ensure that customers find what they need when they need it. This system uses machine learning algorithms to predict stock levels, manage inventory in real-time, and strategically place items across distribution and fulfillment centers. This approach helps reduce the likelihood of encountering out-of-stock items, thus improving the overall shopping experience. For example, Walmart can recognise a top-selling toy in a specific region and automatically send more stock to those stores, ensuring better availability during peak shopping periods‚Äč (Walmart Tech)‚Äč‚Äč (Walmart Corporate News and Information)‚Äč.


Automated Customer Support

Walmart has also implemented AI-driven chatbots to handle common customer inquiries. These chatbots can answer questions about store hours, product availability, and order status. By automating these routine interactions, Walmart frees up its human customer service agents to focus on more complex and nuanced customer issues, enhancing the overall customer service experience‚Äč (Walmart Tech)‚Äč.


Personalised Shopping Experience

Walmart’s AI systems analyse customer data to provide personalised shopping recommendations. By understanding individual customer preferences and shopping habits, Walmart can offer tailored suggestions that enhance the shopping experience and increase customer satisfaction. This integration of AI allows Walmart to cater to the specific needs of customers, ensuring a more personalised and efficient shopping experience‚Äč (Walmart Corporate News and Information)‚Äč.


Seamless Integration with Human Agents

Despite the extensive use of AI, Walmart ensures a seamless handover to human agents when necessary. If a customer’s query goes beyond the capabilities of the chatbot, the system smoothly transitions the conversation to a human agent who can provide the required assistance, maintaining high standards of customer service‚Äč (Walmart Corporate News and Information)‚Äč.

For more detailed information on how Walmart uses AI to enhance its operations, you can visit their official tech blog and corporate news pages.



Here are the key strategies for successful automation:

  1. Pick the right parts to automate: Automating the entire customer service journey (or other areas of your business) is not the right approach.
  2. AI as a Co-Pilot: AI can empower human agents by providing real-time customer data, past interaction history, and suggesting potential solutions. This equips agents to deliver a more informed and personalised service.
  3. Seamless Handover: When an AI interaction reaches its limit, it should seamlessly connect the customer with a human agent or transfer the data to another system. This ensures a smooth transition and avoids frustrating dead ends.


The Future of Customer Service

The future of customer service isn't about AI replacing humans but about them working together. AI streamlines processes and personalises interactions, while human agents bring the emotional intelligence and problem-solving skills that keep customers coming back. By embracing this powerful collaboration, businesses can create a customer service experience that's both efficient and delightful.



Want to implement AI in a thoughtful, strategic way within your business?

Get in touch, we'll help you take the first step and explore how AI can transform the way you work without losing customers - let’s chat.

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