Algorithms vs People – Customer Experience Perspective

Algorithm vs human1During the last few months I’ve seen a significant increase in a number of articles warning about the onslaught of automation in workforce. A lot of very respectable and technologically advanced people, from Stephen Hawking to Elon Musk, express their deep concerns about implications of the latest advancements in artificial intelligence. These concerns range from the social implications of automation replacing jobs, previously thought to be immune, to outright threats to the existence of human species.

Shifts in the employment paradigm are the most immediately noticeable to most people who operate in economically developed and developing countries. Growth in entrepreneurship and shared economy at the expense of  permanent shrinkage of full time jobs in manufacturing and service sectors are very obvious in the US. The return of previously outsourced/off shored jobs translates into the automation or  part-time sub-contracting as companies shed off increasingly high costs of full employment.

Those who make their living by fanning conflicts between people, point at evil “employers” as the root of future mass unemployment to be caused by more automation. It is not surprising as they consistently warp economics into a Cinderella for political science and one cannot promote a political agenda without a villain.

“Technology first allowed the job to be outsourced. Now machines at call centers can be used to seamlessly generate spoken responses to customer inquiries, so that a single operator can handle multiple customers all at once. Meanwhile, the customer often isn’t aware that she is mostly being spoken to by a machine.”

I would like to point out that today’s economy is largely consumer driven and without improving customer experience the cost savings, obtained through automation alone, cannot be sustainable.

During the last 3 decades I was actively involved in development, deployment and adoption management of various automated solutions. I have never experienced a sustainable adoption of an algorithmic solution that decreased the cost of delivering customer experience without also improving it. Surely there were many implementations that did not meet both conditions, but inevitably these were abandoned under competitive pressures within 2-3 years of trials.

I will never forget the remarkable advance in my experience as a customer of banking services with the advent of ATM technology. The availability of on-line banking elevated my experience even higher. Did these automation efforts delivered higher profits to the banks? Absolutely! Would these efforts succeed without the customers adopting to them enthusiastically? I don’t think so.

The experience of riding with Uber is a dramatic improvement over the traditional taxi experience most of the time, but algorithmically driven vehicles are likely to make it even better every single time. The cost of the change is the devastation of employment in the transportation industry which currently accounts for over 30% of the US labor force.

Algorithms do not perform better than people. However, they do consistently perform better than many people. Customers demand consistent experience every time. If most bank tellers delivered exceptional customer experience, ATM technology would not be able to replace them. Unfortunately, the impact of our attitudes toward job performance is not commonly considered in this algorithms vs human equation.

We use remarkable, self-learning algorithms optimized for mining customers’ opinions and sentiments from their unstructured comments and reviews to assist in discovery of customer needs and differentiation. However, some product marketing people expressed their frustration with the technology because it does not generate marketing requirements automatically. When such algorithms arrive it will signal the start of product marketing jobs departure. And they will arrive because the product marketing employees demand them and because their customers are likely to get a better experience with products designed by the algorithms.

While the last two decades brought substantial improvement in the quality of algorithms they also brought considerable increase in direct and indirect cost of labor. Meanwhile, we have developed unfortunate expectations that stop us from bringing the best humanity has to offer – curiosity, empathy, original thinking and creativity, to enrich our working lives and to make us indispensible. We (the humans) need to bring our A game to our jobs, and do it consistently, to outperform the algorithms if we don’t want employment to become another meaningless entitlement.

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9 Responses to Algorithms vs People – Customer Experience Perspective

  1. Ian Golding says:

    Very thought provoking Gregory and very true. For many years organisations have wanted to ‘take cost out’ of their organisations. For many years customers have wanted the same organisations to ‘put the experience in’. It is true to say that there are people who do not think that the two are possible to do at the same time, but that is not true. Ultimately, the better you are able to deliver an experience, the less money it should cost you to do it.

    As organisations get better at doing what the customer needs and wants, it was and is inevitable that technology will play a huge part in achieving a better experience that costs less. Whilst this may appear to threaten the very existence of the human, we have a VERY long way to go before organisations are able to operate without their most important asset – their people.

    As the world changes, so does the world of business. Old industries decline whilst new industries are created. At the end of the day, change is driven by people. My conclusion? People are and always will be more important that Algorithms.

  2. Andrew Rudin says:

    Gregory – wow. This one got me thinking. A lot. Thanks for writing it!

    I’m not as sanguine about the benevolent value of technology, nor that cruddy deployment of technology is self-correcting because consumers will rail against it, and expunge the offenders. I think that market forces (of which consumer needs are a component) produce great pressure for cost-cutting technological adoption. I use the airline industry as an example, which, by many accounts, has replaced ‘high human touch’ with automation, but without proportionate improvements in customer service or experience. Compared to what it was like 30 years ago, commercial air travel is simply awful. But airline industry economics demand that carriers abandon many of the customer-friendly touches that they could once afford to offer. In short, they will simply go out of business if they try.

    – Just one example of an industry in which technology has enabled providers to shed cost, and offload effort, in this case to customers. But I don’t hear many customers saying, “gosh, this is great. I love shlepping my bags from curbside, tagging them myself by interacting with a kiosk, and placing my suitcases on a conveyor belt.” I know it’s corny, but I’m wistful for that friendly uniformed employee who signs off the transaction by saying, ‘have a nice flight.’ Gone for good, I think.

    In the case of ATM’s, I don’t think their widespread adoption had as much to do with consumers having BAD experiences with human tellers – it had more to do with the ability of financial institutions to extend their reach to serve customers, and to expand their operating hours to 24/7. A painful limitation of human employees. So everybody wins. In fact, I remember reading recently that the number of human bank tellers has actually increased in the last 20 years (though I don’t recall the source, and haven’t fact-checked this). Mostly, I see deployment of technology and algorithms as an enhancement for human labor, as something with the potential to reduce or eliminate drudgery and tedium. I see it less as a zero-sum game where humans have to bring their A-game, or ‘be replaced.’ – Though I can’t deny that it has happened that way.

  3. Chip R. Bell says:

    A very thoughtful piece. I particularly liked the way you advance the cause of excellence and a great customer experience delivered by humans without demonizing the advent of technology. The challenge is similar to pitting an online shopping experience versus a brick and mortar one. With online there is no wait, no parking hassle, no exhaustive looking and searching capped off by a surly cash register attendant preoccupied with quitting time. Returns are easy; next day (and in some cases same day) delivery is possible. One can easily think, “Why would you ever shop in a store any more?”

    But, then you walk into a store that delivers an excellent customer experience and you think, “I could never get this kind of sensory enchantment and warm, respectful emotional connection with an online shop?” We obviously need both online and in-store. But, success in winning the hearts and funds of customers with either channel comes from great customer intelligence, thoughtful execution, a passion of excellence and meticulous attention to the creation of an encounter that leaves customers with their precise needs met along with a compelling story they are eager to share.

  4. GregoryY says:

    Ian, I could not agree with you more and always preached that the key to business success is delivering superior customer experience PROFITABLY.

  5. GregoryY says:

    Andrew, nothing is linear in economics. Some automation efforts virtually eliminated certain professions out off existence. Think of typesetters, telephone operators or travel agents. Heavily regulated industries, such as airlines or telecommunications, are less responsive to customer experience demands because the cost of entry is prohibitive and therefore competitive pressures do not serve customer interest.

    I can only recall my own experiences of standing in line to the teller window as not very pleasant. Anyone I ever met agrees with my recollection that ATM is much better experience.

  6. GregoryY says:

    Thank you for kind words Chip. You offer a great example. As convenient as on-line shopping can be, humans actually prefer to buy from humans, as long as they are treated with humanity customers deserve.

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