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Here’s why automation will never destroy the need for customer service labor…

February 27, 2018 Mike Dershowitz No comments exist
From the Desk of Mike Dershowitz

I was in bed most of last week sick with that flu that’s been going around. One happy by-product of that downtime was that, when I wasn’t sleeping, I was binge re-watching Downton Abbey – that wonderful BBC series about country life and societal in Yorkshire England from 1912–1928.

There are many larger themes that play-out between “upstairs” (the family – Lords and Ladies) and “downstairs” (the servants – butler, cooks, footmen, and maids) in Lord Grantham’s large household. But besides emerging women’s rights and changing roles, the coming of automation and the changing role of labor in the English economy is on full display. When the first plug-in electric toaster arrives downstairs at the house, the older head cook Ms. Padmore fears for her job, but her younger, more optimistic assistant cook Daisy is embracing education and other career possibilities as a way to get out of “service” should the need arise.

Politicians in America and Europe and pundits in the business press are happy to scream at you from videos and blog pages over what they claim is one overarching and new theme in our economy: that automation is destroying employment. Of course, this is ridiculous. The push-and-pull between automation and labor has been happening for a millennium, with every improvement in technology. The inhabitants of Downton Abbey knew it, even a century ago, that the push-and-pull between labor and automation reaches everywhere in our ever-changing economy.

In our industry of call centers, many pundits have predicted that AI and various other technologies will destroy call center jobs, much like robots are destroying manufacturing jobs. But frequently, the reality of the marketplace is more complex than what the politicians and pundits scream.

Humans are social beings — we will always want to talk to other humans.

Humans are social beings – we will always want to talk to other humans. This is biologic fact, much as thousands of species on our planet have their own wonderful ways of communicating. Furthermore, as good as automated translation technology has gotten, humans communicate with a level of nuance and non-verbal queues that, so far, only the human brain can understand with any level of confidence.

Customer service – primarily executed with humans talking or meeting with other humans – is not going away anytime soon. While most people can now envision a time where anthropomorphic AI avatars are talking to humans as holograms, many people are social learners, meaning that they want to learn from other humans.

When a business is trying to sell you something, if the complexity of that good/service is such that you need to be educated to make the decision to buy it, (only commoditized products, by definition, need no customer education) then the cost of that good/service must be priced high enough to allow sufficient energy & labor to be spent on educating you in order to make the sale. Accountants have a term for this – it’s called “cost of sales,” and you can see that cost on P&L statements from businesses around the world.

If that product requires customer education in any format, a large portion of those humans prospects will want, by the nature of our biology, that produce/service education to happen whilst interacting with other humans – because most humans are social learners. And if the business wants to sell to these customers – then the business has to figure out how to sell it to us on our terms.

Of course, the same is true if we want to keep our customers. Customer service will continue to be a human affair, and most large businesses know it.

Customer service will continue to be a human affair, and most large businesses know it.
Image from Pixabay

For decades, businesses large and small have worked to reduce customer service costs to the minimum possible, because they know that those calls are not going anywhere. If you’re big enough and your product valuable enough, your customers will call you – they want to interact with other humans. None of us is powerful enough to change the evolutionary biology of the human species in its social tendencies.

Over the past 3 decades, Developed world businesses have been flocking to the developing world to capture the labor arbitrage available in having their customer sales/service calls answered at a lower cost. But even those businesses know that good customer service is not a simple picture – which is why we have tier 1 and tier 2 and tier 3 of service in call centers. That’s our industry’s way of trying to match the complexity of the customer service concern to the cost-optimized labor for that call.

But the pendulum is swinging in the other direction at the same time as costs are being reduced. Business leaders are starting to evaluate the value of each customer to the business, and making value-based decisions on where that customer should be served.

Right now, that trend means that some businesses are employing domestic call centers for certain portions of their customer bases since domestic labor is more expensive than foreign labor and thus seen as better (This is both a valid and an invalid assumption at the same time – more on that in a future post).

But we must extend this value-based customer service decision to interrogate whether or not automation is a factor. Specifically, if the customer is valuable enough to the business, would they trust a machine to serve the customer, or would they prefer a human to do it? While some business leaders may cite trust as the reason why they would want a human, in reality, this decision is not theirs to make.

The answer, of course, is that the customer will make the decision for the business leader – because they are human. If the customer is valuable enough to the business, and the customer wants to talk to a human, then a human they shall have. This shall always be true if the business wants to sell or keep the customer.

So until humans evolve to become unsocial beings, or until a certain portion of us become unsocial learners, the need for other humans to labor in rendering customer service will remain, and no matter how sophisticated those AI Avatars can seem, automation will never destroy the need for customer service labor. It’s a fact of our evolutionary biology that no business leader can change.

If you have questions about fair trade entrepreneurship and how it applies to your company or you want to talk generally about outsourcing and setting up a business in the developing world, feel free to contact me at mike[at]mikedershowitz.com or leave your comments below.

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