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Value and Cost of Customer Service

The Value and Cost of Customer Service

Uthaman Bakthikrishnan

Uthaman Bakthikrishnan

Executive Vice President

A few months ago, I attended a three-day event in France.

All three days, I had a minimal choice when it came to food. The event place had only two open outlets and huge queues in both outlets.

I believe I shouldn’t have to wait for my food, especially when paying for it. I am okay with paying extra for customer service instead of self-service, where you must stand in a line and waste loads of time.

The surprising thing I noticed in France was that everyone happily stood in a queue, and the counter staff were extremely slow in responding to requests. I was getting agitated, but everyone else around me was so calm.

When I stood in the queue the second day, I knew what to expect and stood happily.

Let me give you another instance.

I was at the Chennai airport waiting to board a flight to Mumbai. I had much time to kill and hadn’t had my morning coffee. So, I went to the lounge at Chennai airport.

As most lounges are, the lounge at Chennai had self-service counters. So, I went to the coffee machine and pressed black coffee. I waited a good 20 seconds, and nothing came out of it. Then I pressed the milk coffee, and it immediately started working. Only milk was coming, though, and there was no coffee.

I understood that the machine had run out of coffee beans. Now, I didn’t know what to do. So, I enquired with the service staff around there and asked them to refill the coffee beans in the machine. He nodded his head and walked past me.

I waited a good five minutes, and no action was taken.

Then I realized there was another coffee machine on the other side of the lounge. I went to that machine and had my fill of black coffee. Until I was inside the lounge, I saw several people going to the first machine and turning back disappointed.

Now, both these scenarios call for face-to-face customer service. While it has value, there is a cost associated with it.

As a customer, I would also prefer face-to-face customer service, but as a business, would I do that is the question I have.

Automation Is Here to Stay

While businesses have moved to automation and self-service modes, most customers expect to speak to a real person.

That is a privilege for which you may have to pay or be loyal to a brand for an extended period. For instance, whenever I call my bank using my mobile number, I am immediately patched to a customer service representative. I don’t have to go through the IVR menus or options. That is a privilege I have earned because of my relationship with them for almost 20 years now.

How much value are we willing to place on real human interaction?

The fundamental truth is – automation is more cost-effective than employing staff. With automation, you are on 24×7; with human interaction, you are talking about 3x the cost to offer 24×7.

Most verticals have moved to automation at some level – retail, hotels, restaurants, healthcare, BFSI, professional services, airlines, event management, etc.

There are use cases where there is no need for human intervention. For instance, I want to check the status of my Visa application. Is there a need to speak to a representative? Absolutely not. I only need my application number and a link or an app to enter those details and get to know the status.

Automation can take various forms – apps, kiosks, chatbots, websites, or automated phone systems. This shift is not new, and it has been happening for the past decade or so.

There are instances where automation may not work efficiently or quickly. Let me give you a couple of examples.

My automobile insurance claim was rejected, and I’d like the insurance company to review it. For this, I call up their customer support, and I’d obviously expect to speak to a human being and not to a bot. Automation definitely will not work here.

Take the case of loan restructuring. I have opted for a loan for seven years. Due to my prevailing financial circumstances, I want to extend my loan period to 10 years and reduce my EMI. How would you automate this interaction?

How Do You Strike a Balance between Automation and Human Interaction?

Automation and human interaction make sense, and the choice should be in favor of the customers, allowing them to do their business better.

That being said, these are options that you should definitely automate:

Routing and Repetitive Tasks – anything that follows a predefined process or involves routine transactions. Examples could be checkbook requests, stop payments on cheques, standing instructions, blocking your account/card, etc.

Convenience Options – I want to do the billing and check-outs myself at a retail store. This type of self-service saves a lot of time and is hassle-free.

FAQs – Commonly asked queries can be converted into FAQs, which customers can access and troubleshoot. For instance, I recently bought a Gun Massager, and every time I tried to turn it on, it would take a long time. I thought that the equipment was faulty. So, I went to their site and figured out in their FAQ section that I had to do a long press to activate it.

There are several other possibilities you can think of to automate.

This would allow your human agents to spend time on complex challenges your customers face.


It has to be a combination of automation and human interaction for customers. Besides, you should allow customers to talk to a human agent at any point during their interaction with the automation tools.

I’d say that it should be a split of 60/40, favoring automation and slowly moving them to 80/20 over time. Most queries that human agents encounter are transactional, which can be easily automated. With intelligence, the percentage of automation can considerably go up.

What value do you place on human interactions?


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