Experience machines

A brief history of customer service automation

Evolution of customer service automation

In the first century AD, the Greek inventor Heron of Alexandria devised a mechanical vending machine that dispensed water blessed by temple priests. This ancient gizmo was designed to solve a business problem, which was that worshippers in Alexandrian temples commonly took more holy water than they had paid for.

Heron’s machine is the first known technological example of automated customer service process. It worked somewhat like a modern flush toilet. You dropped a five‑drachma coin into a slot at the top of the machine. The coin landed on a pan attached to a lever, which opened a valve that let water flow out of the machine.

Meanwhile the weight of the coin continued to push the lever downward until it slid off the pan, at which point a counterweight pulled the lever back to its original position, closing the valve and stopping the flow of water.

This mechanism might seem prosaic today, but in first century Egypt it was probably a good example of Arthur C. Clarke’s dictum that any sufficiently advanced tech is indistinguishable from magic. Appropriately enough, it was deployed in buildings that housed religious experiences. By automating the holy H2O delivery process, it doubtless freed priests and their acolytes for more directly spiritual pursuits.

Over the past 150 years, a steady stream of new technologies has delivered new experiences to customers by automating manual processes. Many have been innovations that facilitated communication between customers and companies. With Alexander Graham Bell’s introduction of the telephone in 1876, customers could theoretically communicate with service reps in real time, without the bother of writing a letter, sending a telegram or showing up in person.

The catch was that you could only call a company if you had a direct line to its office. That changed with the introduction of the telephone switchboard in 1894. Now any customer could communicate with any company as long as both had a phone. Network effects kicked in, creating strong incentives for companies and consumers to join the network and laying the foundations of the modern telecom industry.

Rotary dial telephones spread in the 1920s, replacing human operators with a mechanism that used dialed numbers to connect telephones. The first call centers emerged in the early 1960s, powered by a new technology called Private Automated Business Exchanges (PABX) that handled large volumes of calls. Companies started filling offices with service reps whose job was to engage with customers over the phone. And when AT&T introduced toll‑free 800 numbers in 1967, it became possible for customers to reverse phone charges to companies without the hassle of placing a collect call through a human operator.

The invention of touch‑tone phones impact on Customer Service Automation

The digitization of customer service began with the invention of touch‑tone phones in 1962. Early computers could recognize and respond to the tones produced by these new phones. This laid the foundation for Interactive Voice Response (IVR) technology, which emerged in the late 1970s, allowing companies to create automated call routing systems based on digitized signals.

So‑called phone trees spread like kudzu in the 1980s, with mixed results from the customer satisfaction point of view. (“Press 1 for balance information! Press 2 for opening hours! Press 3 to rage against this machine! I’m sorry, I didn’t understand what you said. Press 1 …” Etc.)

In the early 1990s, the World Wide Web opened up a new world of interaction between brands and consumers. It was soon followed by customer relationship management (CRM) applications that companies used to track each customer’s history so that service could be personalized at scale.

Just a few years later, social media and mobile apps revolutionized customer service yet again, as customers took to their smartphones to communicate directly with brands and share their good, bad and ugly service experiences with a global audience. And today, the rise of machine intelligence is opening up entirely new customer experience frontiers.

Emerging AI tools are superpowers for customer service reps. AI automates routine, repeatable tasks like prioritizing customer calls and routing them for action. Machine learning algorithms mine vast volumes of data from the Internet of Things to warn about anomalous charges and identify product malfunctions before they happen. Chatbots and virtual assistants automate texting and communications, taking care of routine queries and freeing human reps to focus on more complex issues.

Eight out of 10 businesses have already implemented or are planning to adopt AI as a customer service solution by 2020, according to research from Oracle. Meanwhile, Gartner predicts that AI bots will power 85% of customer service interactions by 2020.

It’s not clear if these figures include interactions relating to holy water. Regardless, the customer service automation trend that started 2000 years ago in Alexandria shows no sign of slowing down. How we use these powerful tools is up to us as companies and consumers.