Whether having your passport validated at the airport or specifying which toppings you want on your pizza, it is becoming increasingly common to pass through a customer service experience from beginning to end without ever encountering a human being. Customer engagement is undergoing a quick revolution, following the customer where he or she lives — into the realms of chatbots, instant messaging, social media and artificial intelligence.

Something is clearly gained by interfacing virtually, but the switchover also brings the risk of losing something. Customer loyalty is at a premium in an age of intense competition for market share. And while channeling customers through social media may be efficient, it comes with the potential for loosening the customer-company bond.

“The challenge is, how will that effect your interaction with the customer?” asks Wharton marketing professor Jonah Berger. Many industries are in the early stages of integrating these technologies into the customer experience, and sometimes things don’t go well. “People get upset. They say, ‘I have to navigate this myself? That doesn’t make me feel valued.’ The challenge for these companies is how to do it in a way that allows them to save money but doesn’t degrade the customer interaction. If people feel like they are getting a poor response, they are less likely to stay with the company.”

And yet, trend lines are clearly leading away from traditional human-to-human interaction.

“I have a son in college and he doesn’t want to communicate with anyone except through Twitter,” says Chris Haerich, senior vice president of the Professional Association for Customer Engagement, which represents about 10,000 members who come from places like Bank of America to much smaller firms. “The majority of companies we have in our membership have some level of chat or social media integration for sure. They’ve had to for at least three or four years now. And there were some that were reticent for a long time about wanting to move to that until they finally realized that millennials were out in the workplace and becoming the customer, and these were the methods they chose. It was a real eye-opener.”

“The challenge for these companies is how to do it in a way that allows them to save money but doesn’t degrade the customer interaction.” –Jonah Berger

Getting Stuck with Virtual Help

Customer service encounters through social media don’t always leave customers feeling great confidence. When a political consultant got stuck in an Amtrak elevator at BWI Airport last February, she used the Amtrak Twitter account to get help, and help soon arrived. Seven months later, she received this Tweet from Amtrak: “We are sorry to hear that. Are you still in the elevator?” Wags had a field day with the episode, which emphasized the very public aspect of using social media as a customer service intermediary.

This writer tried using Verizon’s online “virtual agent” to get a neighbor’s phone repaired. The chatbot opened an online repair request form, but the form asked for an email address for the customer — and the customer, who is elderly, does not have email. When the chatbot was presented with a question about this hurdle, the conversation went like this:

Ask Verizon: I am designed to answer questions one sentence at a time. Please try rephrasing your question in one concise sentence.

Customer: The customer does not have an email address, so I cannot fill out the form.

Ask Verizon: I’m sorry that I wasn’t able to help you. Could you tell me why this information didn’t help you?

Customer: Your answer did not match my question.

Ask Verizon: Thank you for your feedback; we will use this to improve my knowledge. Please ask a question if you would like further assistance.

If virtual interactions like this become the primary or sole avenue for customer contact, the industry might expect to see the introduction of regulation, says Haerich. “I will tell you that this industry, especially on the telephone side and the inbound and outbound side, is highly regulated,” she points out, “so as we move to different media it just makes sense that those would be highly regulated as well,” possibly by the FCC or FTC.

Companies have an incentive to deploy more virtual customer service tools because it saves them money. But customers also appear to be propelling the migration. About 64% of customers participating in a ubisend survey said businesses should be reachable via text messaging apps, and 50% said that a business should be available to respond to queries every day, 24 hours a day.

Customers who use Twitter to communicate with a company want fast action, and are quick to punish. More than half of those responding to a survey by digital marketing firm Millward Brown Digital and social software firm Lithium Technologies said they expect a response within an hour, and when they don’t get it, 60% said they would take action such as shaming on social media.

When non-human customer service works, it works extremely well; but when it works poorly, it works extremely poorly, says Wharton marketing professor Americus Reed. “When a human is in the interaction, there is an opportunity to course-correct, and that’s less the case with chatbots.”

“When a human is in the interaction, there is an opportunity to course-correct, and that’s less the case with chatbots.” — Americus Reed

“Many companies say they want to interact with customers on social media, but they don’t mean it — they don’t want to make the investment of resources to do it,” adds Berger. “You can Tweet at an airline that they have no Wi-Fi, and they send back a Tweet that they have a lot of plans to put in more and they have the most of any fleet. But they aren’t actually listening. They are using a stock response, and until companies are willing to listen and have a conversation engaging with social media they are never going to reach the goals the company has or the customers have. Customers are expecting real-time, one-on-one interaction, and if the company isn’t giving it to you, you’re going to be disappointed.”

Still, chatbots are clearly not going away. There is a cost-savings factor that’s hard to ignore, says Reed. “Bots work 24 hours a day and they never complain. Like most things that are technical innovations that seep into the marketing space, there is always a kind of immediate surge of implementation before understanding. Companies are learning this on the fly, testing and retesting in real time. We have this awful experience with Verizon, and then we see Verizon trying to figure out what specific interaction will the AI technology work for versus not.”

In the meantime, companies that have figured out when, where and with whom to use automated interface are operating at a tremendous advantage. “That’s the opportunity to go back and from a competitive advantage perspective to differentiate,” says Reed. “When I get electronic email cards from people and I click on it and it says ‘Happy birthday,’ I would almost prefer that you did nothing, because I know it took a microsecond to do. Customers are aware of that, they are aware when it’s not a real person. But there is a tremendous upside to it, because when it goes well it’s powerful, because you didn’t expect to get help so quickly.”

During this period of transition, companies should carefully consider what kind of customer service functions are best executed by AI and chatbots, and what is best left to humans, says Donal Daly, CEO of sales software company Altify and author of Tomorrow | Today: How AI Impacts How We Work, Live and Think (and It’s Not What You Expect). A good service agent will probably spend a high proportion of his or her time doing things machines are better at, he says. “It’s that last 20-30-40% where the machine will never get to creative assessment and judgment. I had a good experience with Four Seasons hotel on the app. They knew where I was, and I had a customer service inquiry, and they had a response by the time I got to their property, and that was good. But I don’t have a good example of a good experience where it was fully automated.”

Companies that cannot do social media customer engagement well should consider not doing it at all, he says. “I might take a position that we’re not choosing to engage [in social media as customer service] because the medium does not meet the level of expectation. If we engage in social media and it isn’t done well, I think we feel more aggrieved.”

The Lost Art of Being Human

More and better help is undoubtedly on the way, and when it arrives it will come from someone like Alexa. Amazon is working on significant advances to Alexa, the virtual helper inside Amazon’s Echo, reports MIT Technology Review. The goal is to endow Alexa with the ability to recognize and interpret tone in the human voice — irritation, for instance — and to make judgments about the context of certain words or phrases based on the geographical origin of the call. Alexa already is able to more immediately understand certain requests based on previous buying patterns — when a proven classical music customer is once again ordering classical, for instance. “It is super-vital for the conversation to be magical,” one source close to the research told the journal.

“We have a human side, and there is going to be a counter-punch by companies who choose to focus on connecting with customers in a more human way.” –Americus Reed

Given the march of technology, it may be naïve to believe that AI will never be able to do everything humans do — including exercising emotional intelligence, judgment and wisdom, creativity, humor and warmth.

Several other large companies, including Google and Facebook, appear to be betting on it. Apple last year bought VocalIQ, an upstart whose software assists computers in interpreting human language. Earlier this year it acquired Emotient, whose technology reads facial expressions. Apple has not announced how it plans to develop and utilize these technologies, but the applications at the customer level are easy to imagine.

But no matter how sophisticated social media, chatbots and artificial intelligence become, there is perhaps an unknowable factor at the end of this particular customer service story. People will likely always know when they are being handled by a computer. Will they learn to value the efficient over the human — transactional over experiential? Will the very knowledge they are being handled by a machine be a hurdle?

“I think that if the experience is good, people would prefer to have the automated systems,” says Daly. “There are many of us saying, ‘let me talk to a machine.’ I can do it at a time that is convenient to me, when I want to deal with this, and I don’t have to talk to a person. And if that works well, I think that’s a better experience. There are those who have a millennial mindset, and not just of that age group, but tech-savvy and tech-dependent, who are quite happy to do that. I don’t think there is any concern about being handled by a machine.”

For others, however, this may not do. Says Reed: “Think of the development of e-readers, and then people say, ‘I like the tactile feel of the book.’ There is always going to be a culture there that is responsive to the human side of things. And customer service will be a lost art, quite honestly, the ability to delight a customer with human interaction. If chatbots take over, that will be something that will be lost.”

There are all kinds of societal questions at play, he adds: “The idea of being connected but not connected, what does it mean to ‘be connected’ — not just in terms of tech, but also in terms of the human spirit? And that’s in the background of this. We have a human side, and there is going to be a counter-punch by companies who choose to focus on connecting with customers in a more human way.”