How to Reduce Customer Service Costs with AI

For many businesses, the contact center seems like a cost center. But it doesn’t have to be this way. In fact, with the right AI technologies, the contact center can become a source of revenue and business value. You can kill two birds with one stone. Not only can you reduce customer service costs with AI, but you can also improve your Customer Experience (CX).

In this blog we talk about:

  • The motivations to reduce customer service costs

  • How to use AI to reduce the cost to serve

  • The specific AI-powered technologies that make these savings possible

Why Reduce Customer Service Costs with AI?

Staffing a contact center is a challenge. With a higher-than-average employee turnover, contact centers struggle to maintain and cultivate talent. In truth, 49% of CX leaders reported an increase in employee attrition in 2022.

So, why is this a problem?

Well, high agent attrition causes a variety of issues. For example, increased training costs, decreased productivity and reduced customer satisfaction. Considering that staffing accounts for the majority of contact center costs, it's vital for agents servicing customer interactions to deliver high quality CX.

It’s important to understand that interaction quality improves with an agent’s experience. When there's significant agent attrition, overall CX suffers. Without agent longevity and quality, the cost to serve increases. For this reason, it's crucial to reduce customer service costs where possible. And the best way to do this is with AI.

1 in 10

customer interactions will be automated by 2026

AI technologies are key to streamlining contact center processes, which allows CX leaders to reduce customer service costs. Specifically, they:

  • Empower agents to do more

  • Boost first contact resolution through self-service

  • Enable effortless scalability

AI is providing ways for businesses to handle customer inquiries in cost-effective ways. Best of all, it’s making the lives of agents easier.

CX experts are finally beginning to realize the potential of AI. In 2022, spending on conversational AI in contact centers surpassed $1.99 billion. By 2026, one in ten customer interactions will be automated, leading to a saving of $80 billion in labor costs.

Thus, the cost savings offered by AI are huge.

The next question is: How can you put these streamlined processes into practice?

How to Use AI to Reduce the Cost to Serve

AI presents a unique opportunity to enhance your CX. But what does this look like in practice?

Deploy AI Where Possible, Use Humans to Differentiate

Contact centers will always needs humans. As the most expensive component of a contact center, it is important to utilize them wisely. Therefore, the aim is to reduce the volume of contacts on higher cost to service channels. So, implement AI where possible but use human agents to differentiate, and add the greatest value.

To do this, place AI at the front of your interaction strategy. By doing so, it deflects contacts from the busiest and most expensive channels, such as voice, and then sends them to self-serve or digital channels.

Further down the line, place AI as an assistant to agents, to serve up the right information to front-line teams, enabling them to solve customer interactions the first time.

Here’s an example of how to lay out your interaction strategy, so that you reduce customer service costs with AI.

  1. Customer Self-Serve: Website and customer portals designed to allow customers to access information and complete simple tasks without support.

  2. Automated Assistance: Where customers need support, AI-driven tools support customers without the need for human intervention.

  3. Digital Support: Human agents provide support for more complex customer queries across digital channels (web chat, social media, messaging etc.) for effective resolution on the customer’s channel of choice.

  4. Voice: Where necessary, or if preferred, speaking to a live agent for complex, sensitive, or high value interactions ensures the most costly channel is delivering the highest value.

Now let’s investigate the exact AI technologies that enable you to reduce contact center service costs.

The AI Behind Cost Reductions

Without AI, agents spend most of their time on the simplest tasks. These are routine activities, like:

  • Requests for information, like opening hours, directions, return processes, changes to services or products, etc.

  • Solving simple tasks, like resetting a password or making a reservation

When you struggle with contact volumes, queue time increases. This forces customers with urgent problems to wait in long queues as agents struggle to cope with the surge.

Customer-facing chatbots and Machine Agents provide the solution.


The first step to reducing customer service costs with AI is the use of the automated chatbot.

So, what do they automate?

Chatbots automate the simplest interactions to save time for agents. Customers simply communicate with the chatbot over text or voice. Propelled by Natural Language Processing (NLP), a chatbot can understand and diagnose the customer’s problem.

As such, a chatbot can direct a customer to the appropriate self-service access point, be it a website or an app. If the AI has access to the customer database, a chatbot can even support the customer in providing any necessary information. As a result, it speeds up the interaction and reduces the total Customer Effort Score.

Chatbots can operate 24/7, outside of office hours, giving your customers instant access to support at any time of day. Indeed, younger customers often prefer to interact initially via non-voice channels. As a result, this reduces the total volume of contacts that need a human agent, in turn reducing the cost of labor.

Machine Agents

Today, chatbots are common. You’ve probably used your fair share, and been disappointed with the outcomes.

Conversational Machine Agents, though, are a different breed of technology entirely.

The traditional chatbot uses a rules-based program to answer inquiries. It follows a pre-determined interaction flow; if the conversation diverges from that plan, the AI won’t know how to respond. This is why chatbots feel stilted – because they are. They’re only able to have one conversation, and can’t handle any divergence.

A Conversational Machine Agent, on the other hand, uses Natural Language Understanding technologies and continually improves through Machine Learning. Trained using real interactions, and equipped with all the knowledge it needs to answer customer questions, a Machine Agent can respond flexibly, no matter the nature of the interaction.

Machine Agents Reduce the Cost To Serve by Acting as an AI Assistant

Labor is the single greatest cost for contact centers, and AI is a significant opportunity to reduce customer service costs.

Agent Experience, then, is as essential to your contact center strategy as CX. AI has the potential to revolutionize the life of the contact center agent, empowering them to consistently deliver outstanding experiences, whilst freeing them from repetitive and boring tasks.

AI functions as a digital assistant, supporting the agent throughout customer interaction.

Firstly, the Machine Agent presents its human colleague with information drawn from the customer through NLP, allowing the agent to quickly identify and diagnose the customer’s problem.

How does this work?

As the interaction begins, AI presents the agent with script suggestions, allowing them to assuage the customer’s anxieties, whilst ensuring that all compliance statements are read. Once complete, the Machine Agent presents the agent with knowledge articles relevant to the customer’s problem, allowing them to walk the customer through a solution.

Throughout the entire interaction, AI monitors quality and uploads data automatically to your reporting suite. This, of course, is to ensure that the Machine Agent meets quality management targets.

AI is also able to help in the post-call. Customer information is collected automatically throughout the interaction and uploaded to the business’ database instantly. No more agent time used to enter customer data after an interaction. Not only is the customer more likely get effective answers, but the overall interaction is also much faster, resulting in a much lower cost-to-serve.

Self-Service by Chatbot or Machine Agent Makes Scalability Easy

AI-backed Machine Agents and chatbots let you scale to meet any level of demand.

Easily provisioned at the click of a button, Machine Agents and chatbots can help at all levels of the contact center.

  1. Chatbots can direct customers to self-service to take the pressure off your agents.

  2. Chatbots collect essential data before interactions, saving valuable time, when you can’t afford to lose a second.

  3. NLP can identify the most important interactions, and route them to a human agent for resolution.

  4. AI can forecast interaction volumes for you, letting you generate accurate demand predictions that make agent scheduling easy.

In summary, AI allows you to scale effortlessly to meet any level of demand and to reduce the cost of customer service as you do so.

Reduce Customer Service Costs with Content Guru and brain®

AI is essential to the operation of the contact center. To make it a part of yours, you need a powerful yet flexible AI toolkit.

brain® is Content Guru’s AI and intelligent automation offering, providing all the tools you need to make AI a productive part of your contact center ecosystem. brain offers NLP, sentiment analysis, automated chatbots, and much more. For example, through storm® Machine Agent®, you can create conversational chatbots, operating over voice or text, to answer customer contacts 24/7 in a human-like way.

In addition to AI, you need the tools to support your human agents. storm is Content Guru’s cloud-based contact center solution, offering unrivaled reliability, scalability, and flexibility. storm offers all the tools your contact center needs and brings them into a single, browser-based app. Through the DTA® interface, agents can view and respond to customer contacts from any channel instantaneously. Customer data and AI-generated script prompts appear alongside every interaction, to boost first-contact resolution.

AI is reshaping the contact center. To deliver first-class experiences for customers and agents, businesses must integrate intelligent AI solutions into their CX processes. Content Guru stands ready to make your AI transformation easy, all while you cut your customer service costs.

Discover what AI and Intelligent Automation looks like with Content Guru.