AI is disrupting Customer Support. Salesforce is feeling the pinch.

🌈 Abstract

The article discusses the behind-the-scenes operations of customer service call centers and how the customer support industry has been impacted by the pandemic and the rise of AI, particularly ChatGPT. It explores how customer support software companies are facing challenges as enterprises increasingly invest in AI-based solutions, leading to pressure on their sales cycles and customer acquisition costs.

🙋 Q&A

[01] The Customer Service Call Center Operations

1. What are the key steps involved in a customer service call?

• The customer has to be routed through the phone queues to the next available agent.
• The agent has to verify the customer's identity and match the customer's queries with the most up-to-date information in the Knowledge Base to resolve the issue(s).
• After the call ends, the agent adds the required notes to the database.

2. What are the two main metrics enterprises focus on for customer support?

• The cost per support case
• The average handle time needed to interact with a customer and resolve their queries

3. How did the pandemic impact the customer support industry?

• Customer support costs grew during the pandemic, leading many enterprises to shift to "chat with agents" where agents could interact with multiple customers at once.
• Some companies started charging customers a premium for customer support, similar to Apple's AppleCare model.

[02] The Impact of ChatGPT on the Customer Support Industry

1. How has ChatGPT impacted the customer support industry?

• ChatGPT found immediate appeal in the customer support industry, as it could be used as a chat agent to troubleshoot queries.
• The live demonstration of ChatGPT acting as an assistant to talk to customer care agents on behalf of customers was seen as a threat to customer support software companies.

2. How are customer support software companies responding to the rise of AI?

• These companies are fighting for IT budgets as enterprises invest in AI proof-of-concepts from companies like OpenAI, Sienna AI, and Microsoft Copilot.
• This has led to elongated sales cycles and higher customer acquisition costs for customer support software companies.

3. What is the current state of the customer support software sector?

• The sector is in the midst of a de-rating, and the valuation for most customer support software companies is likely to remain depressed until enterprises decide to reallocate budgets back to these software firms.
• Salesforce and its peers will have an important 12 months ahead as they revamp their offerings and push the deployment of AI-enabled solutions to entice enterprise customers.