AI Chatbot VS Live Agent: What’s Better For Customer Service?

Updated on November 22, 2024

How many times have you been stuck on hold, waiting forever for an agent to come and hear you out? Or going back and forth with a chatbot that keeps suggesting the same solutions without completely understanding what exactly you want? 

It can be really frustrating for both the customers and the businesses as well.

These days, businesses are split between using actual humans or AI chatbots for customer support. But which one is actually better? 

Well, it’s not as simple as just picking one or the other. 

Live agents can understand your problem and handle complex situations well, but they’re expensive and can’t work 24/7. AI chatbots, on the other hand, are always available and can handle simple stuff quickly, but they’re not good at understanding human emotions (which is very important in customer service). 

So what’s the right call? Let’s break it down and figure out when it makes sense to use each option for customer service.

What is a Live Agent?

A live agent is a real person who interacts directly with customers or users to provide assistance, answer questions, or solve problems. They typically communicate through various channels such as phone calls, online chat, or sometimes even video calls.

For example, say a customer has a billing issue or a technical problem that’s hard to explain. A live agent can ask the right questions, give tailored advice, and make quick decisions. This human touch builds trust and makes the support experience smoother and more satisfying.

Live agents are particularly helpful in industries where personal interaction is crucial, such as healthcare or financial services. They help businesses offer high-quality service and keep their customers happy.

What is an AI Chatbot?

An AI chatbot is software designed to talk like a human would. It uses artificial intelligence to understand what you’re saying and respond in a way that makes sense. These chatbots can answer questions, help you with tasks, or just chat about various topics.

AI chatbots can be used in many places. For example, let’s say you’ve an AI story generator website, but your users often have trouble understanding how to use it. An AI chatbot can be integrated into such sites so your users can just go to the chat window and ask, “How do I start creating a story?” 

The AI chatbot can then help users work their way through the website better and improve its performance. Best part is that a chatbot can take many more queries at a time than a real human can. Some popular AI chatbots you might know about are ChatGPT, Gemini, or Claude.

AI Chatbot VS Live Agent in Customer Service

Both live agents and AI chatbots are used for customer service, but how do you know which one is the better choice?

When choosing between AI chatbots and live agents, you need to weigh a lot of factors like human touch, personalization, speed, availability, etc. We compared the two against all these aspects, and here are the results:

Aspect	AI Chatbots	Live Agents
Human Touch	Lacks human touch, interaction is automated.	Provides a personal touch, can empathize and react naturally during interaction.
Personalisation	Can offer personalized responses based on data and scripts.	Can offer highly personalized service based on real-time interaction and judgment.
Speed and Availability	Available 24/7, provides instant responses.	Availability is limited to work hours & may require hold times.
Accuracy in Solving Issues	Great at handling common queries using predefined workflows.	Can pick up on details and context, often solving complex issues more accurately
Cost	Generally more cost-effective, reduces the need for a large staff.	Typically involves higher operational costs due to staffing.
Integration	Easily integrates with various digital systems and platforms.	Integration depends on training and the systems used by the organization.
Handling Complex Issues	May struggle with complex and nuanced issues not covered in the programming.	Better at handling complex issues and providing creative solutions.
Long Term Impact	Can constantly learn from interactions to improve, but may lack the depth of understanding and adaptation that a human provides.	Can build long-term customer relationships and adapt to individual needs and changes over time.

Let’s discuss each of these in detail.

Human Touch

The human touch makes a big difference in customer service. It means adding a personal, caring approach to interactions with customers. Live agents can adapt their responses to match a customer’s feelings, making interactions more genuine. 

For example, if a customer is frustrated, a live agent can offer reassurance or apologize sincerely. This is something chatbots struggle to do.

When issues get complicated, most customers prefer talking to a real person. In fact, about 81% of people would rather speak with a live agent when things aren’t straightforward. They want to feel heard and understood. That’s why live agents play a crucial role in keeping customers happy, especially when it matters most.

On the other hand, while AI chatbots can handle queries easily and even give fast responses, they can’t connect with people on an emotional level.

So, when it comes to adding that human touch to conversations, live agents obviously win.

Personalization

Personalization in customer service means tailoring the service to each individual customer’s needs, preferences, and situation. It’s about making the customer feel like they’re getting special attention, not just a one-size-fits-all approach.

This is where live agents stand out again. They can change their tone and language to suit the customer’s mood and needs. This makes interactions more engaging and helps solve problems in a way that feels personal.

While AI chatbots can give personalized responses too, they have limitations. AI chatbots use data like purchase history or browsing behavior to offer tailored recommendations or answers. But, they often lack the nuanced understanding of human emotions and complex situations that live agents have.

So, if we’re talking about personalization in particular, live agents can handle it better than AI chatbots. 

Speed and Availability

Speed matters in customer service. If you respond late to customers, they will leave. This is where AI chatbots have a clear advantage. They respond in under five seconds, while live agents take about 45 seconds on average. For many customers, that difference is huge, especially since 59% prefer not to wait more than a minute for help.

Chatbots also have the edge in availability. They’re there 24/7, ready to answer questions any time, even outside of business hours. Live agents, however, are limited to their working hours. So, when it comes to immediate, around-the-clock support, chatbots are hard to beat.

AI Chatbots also cut down waiting time by handling multiple questions at once without getting overwhelmed. This isn’t something live agents can do as efficiently.

Accuracy in Solving Issues

When it comes to accuracy, live agents usually have the upper hand. They understand context, adapt to different situations, and can handle complex questions that need a bit of empathy and creativity. This helps them find solutions that fit each customer’s unique problem.

AI Chatbots, on the other hand, are great with basic, repetitive questions. They provide consistent, error-free answers for straightforward inquiries, but they often struggle with more complicated issues. When a chatbot doesn’t have the right answer, it usually passes the problem over to a live agent.

In situations that require detailed explanations or a deeper understanding, live agents win. They can adjust their tone, dig into the specifics, and think outside the box. That’s why customers often feel more satisfied when a human solves their problem, especially when it’s a bit tricky.

In short, chatbots are efficient for simple tasks, but for complex issues that need a thoughtful approach, live agents are the go-to.

Cost

When it comes to cost, AI chatbots offer a clear advantage. They can cut customer service expenses by up to 30%, making them a cost-effective solution for many businesses.

There are a few reasons why chatbots save money:

• Lower subscription fees: The annual cost of a chatbot service is usually much less than a human agent’s salary.
• Reduced hiring expenses: Chatbots reduce the need to hire and train more agents, especially during busy periods. This can save businesses millions each year.
• Scalability: As your business grows, chatbots can handle more questions without needing extra resources. Unlike live agents, they don’t require overtime pay or additional training.

While live agents are important for handling complex issues, their salaries, training, and other costs can add up to a lot. Chatbots, on the other hand, provide a cheaper way to manage high volumes of inquiries. They help keep expenses down without compromising on efficiency.

So, chatbots are more budget-friendly than live agents.

Integration

Integrating AI chatbots is generally easier than integrating live agents into a customer service system. Here’s why:

• AI chatbots can easily connect with various digital systems and platforms. They’re designed to work with different software, which makes adding them to existing setups simpler.
• While chatbots need initial setup, their training is mostly about feeding them information. Once programmed, they can handle many tasks right away. Live agents, however, need ongoing training, which takes more time and effort.
• After the upfront cost of developing or buying a chatbot, running costs are lower. They don’t need salaries, benefits, or workspace like human agents do.
• It’s easier to scale up chatbot operations. You can handle more customer queries by improving the software. With live agents, scaling means hiring and training more people, which is slower and more expensive.
• Chatbots provide consistent service once programmed. Live agents may vary in their responses and need constant guidance to maintain consistency.

While live agents are better for handling complex or sensitive issues, when it comes to integration, AI chatbots have the advantage. They’re quicker to set up, easier to scale, and simpler to maintain in the long run. This makes them a more straightforward choice for many businesses looking to improve their customer service.

Handling Complex Issues

Complex problems need a human touch, and this is where live agents excel. They can understand emotions, adapt to unexpected situations, and think creatively. These skills are crucial when customers are frustrated, confused, or dealing with something that’s not straightforward.

Live agents can read between the lines, sense the mood of a conversation, and respond in a way that feels genuine. This is especially important when issues involve multiple steps or require a bit of back-and-forth to get resolved. A chatbot, even the smartest one, can’t replicate this level of understanding.

While chatbots are great for handling simple tasks and providing quick answers, they often struggle with anything outside their pre-set programming. When a situation gets too complicated, they end up passing the issue to a live agent anyway.

That’s why, for handling the tough, nuanced problems, live agents are better. 

Long-Term Impact

In the long run, integrating AI chatbots can greatly improve your customer service. They handle simple queries instantly, freeing up live agents to take care of more complex problems. This not only speeds up response times but also makes sure that your team can focus on delivering high-quality support where it’s needed most.

Chatbots can also help reduce costs by up to 30%, making them a smart investment over time. With 24/7 availability, they ensure your customers always have access to support, even outside normal business hours. This constant assistance helps boost customer satisfaction and loyalty, as people know they can get help whenever they need it.

Interestingly, companies that use chatbots and other self-service options see an 85% increase in customer retention. By handling up to 59% of all chats, chatbots allow live agents to concentrate on more important issues, creating a balanced and effective support system.

In short, chatbots contribute to quicker response times, cost savings, and better overall customer service. Combined with live agents, they build a support model that’s both efficient and sustainable.

Pros

Both AI chatbots and live agents bring unique strengths to customer service.

Pros of AI Chatbots:

• Instant Responses: Chatbots respond immediately, 24/7, which keeps customers happy and reduces wait times.
• Cost-Effective: They can lower customer service costs by up to 30%, making them a budget-friendly option.
• Handles High Volume: Chatbots can manage multiple inquiries at once, making them ideal for handling simple, repetitive questions without getting overwhelmed.

Pros of Live Agents:

• Personalized Support: Live agents can adapt their tone and style to match the customer, providing empathy and understanding.
• Handles Complex Issues: They’re great for solving more complicated problems that chatbots can’t manage.

When you use both, you get the best of both worlds: quick, efficient help from chatbots and human empathy and problem-solving skills from live agents.

Cons

While AI chatbots and live agents both have their strengths, each has its downsides too.

Cons of AI Chatbots:

• Limited Understanding: Chatbots often struggle with complex questions. They stick to pre-programmed answers and can’t handle nuanced or complicated issues, leading to frustration.
• Lack of Personal Touch: Chatbots can’t adapt to emotions or provide the empathy many customers want, especially in stressful situations. This can make interactions feel impersonal, leaving 71% of customers feeling frustrated with robotic responses.

Cons of Live Agents:

• Slower Response Times: Live agents aren’t available 24/7 and may have slower response times, especially during peak hours. This can cause longer wait times for customers.
• Higher Costs: Employing live agents is more expensive due to salaries, training, and ongoing support. This makes it less cost-effective, particularly for businesses handling high volumes of simple inquiries.

In short, chatbots can seem too rigid, while live agents can be slower and more costly. That’s why a balanced approach, using both, often works best.

What to Look at When Deciding on Your Support Channel

When choosing your support channel, you should know when AI chatbots are more effective than live agents and vice versa. 

AI chatbots excel at providing quick, 24/7 responses for simple queries, making them ideal for high-volume, repetitive tasks. 

On the other hand, live agents shine in situations that require empathy and nuanced problem-solving, handling complex issues with a personal touch.

When Are AI Chatbots for Customer Service Better Than Live Agents

AI chatbots work best in situations that need quick responses and handling large numbers of inquiries. They’re also typically better than live agents when dealing with simple, repetitive questions that come up often, like “What’s my account balance?” or “Where’s my order?” 

They’re especially useful for businesses that get tons of basic questions around the clock, like e-commerce sites, banks, or telecom companies. 

If you’re running a business where customers frequently ask about things like store hours, return policies, or basic troubleshooting (like resetting passwords), chatbots can handle these instantly, no matter what time it is. 

So, AI chatbots are great for industries with predictable customer questions – retail, utilities, or food delivery services, for example.

When are Live Agents for Customer Service Better Than AI Chatbots

Live agents really shine when customer issues get complicated or emotional. If you’re in an industry where customers often need empathy and nuanced understanding – like healthcare, luxury retail, or financial services – live agents are usually the better choice. 

They’re good at handling sensitive situations, like when a customer is upset about a billing error or needs to make changes to a complex order. Industries dealing with high-value transactions or services (like real estate, B2B sales, or premium travel services) benefit from human agents who can read between the lines, negotiate, and build relationships. 

Live agents are also crucial for businesses where problems often require creative problem-solving or where the stakes are high – legal services, medical care, or custom-designed products, for example. 

When a customer needs someone to understand their unique situation, like explaining why they need to return a wedding dress or discussing options for a missed mortgage payment, that human touch becomes invaluable. 

How to Integrate AI Chatbots in Your Customer Service

Integrating AI chatbots into your customer service can be straightforward if you follow these steps:

1. Define the Chatbot’s Purpose: Clearly outline what tasks your chatbot will handle. Focus on routine inquiries and frequently asked questions to start.

2. Choose the Right Platform: Pick a chatbot platform that’s easy to set up and allows customization without heavy coding. This will make the process smoother.

3. Test User Interactions: Before going live, test the chatbot thoroughly. Make sure it responds accurately to common questions and can handle basic interactions.

4. Integrate with CRM Systems: Connect your chatbot with your existing customer relationship management (CRM) system. This helps keep data consistent and ensures a seamless experience.

After launching, keep an eye on performance and adjust as needed. Regularly gather user feedback and make improvements to keep the chatbot effective over time. Following these steps will help your chatbot fit smoothly into your customer service strategy.

When choosing between live agents and AI chatbots, it’s important to weigh their individual advantages and disadvantages. At the end of the day, the best choice completely depends on your business’s specific needs and available resources.