As enterprises race to integrate artificial intelligence into customer service, the technology’s financial potential might be undercut by a growing trust deficit.
While AI promises financial benefits and efficiency, the cost of poor implementation could outweigh the savings for enterprises relying on customer calls as revenue lifelines.
When callers realize they’re speaking to AI, the average call abandonment rate jumps from around four percent with human agents to nearly 25 percent with disclosed AI, according to Answering Service Care’s AI Call Report. That’s a difference that could cost businesses millions in lost revenue and reputation.
Transparency Matters More Than Technology
“People want to talk to people, or at least know when they’re not,” Logan Shooster, VP of Answering Service Care, told CX Today in an interview.
“The best course of action if you’re going to use AI is to at least disclose that it is AI. And [say] here are your options—you can get a human if you want it, or you can get a call back or an email so that the person can get help.”
That desire for transparency is overwhelming. 80 percent of the respondents to the survey wanted to know if they’re talking to AI. “So not necessarily that they don’t want to talk to AI, but if they are talking to AI or forced to be dealing with AI, they want to know,” Shooster said.
The data shows how fragile trust from consumers can be.
“A third of them will hang up immediately if they do know it's AI, so they won’t even try to solve the problem.”
Generational differences exist, but the core sentiment holds steady. “Boomers were the most prone to hang up immediately and want to talk to a human, whereas Gen Z and below were more adept to potentially deal with AI,” Shooster said.
“But still, the overwhelming majority of people across generations, across political lines, all want to know at the core, ‘Is it a human or not?' And then if it's not, 'What are my options? Can I get to a human? Am I stuck with an AI? What's the process to escalate?’”
Shooster warned that businesses are too often focused on cutting costs, without fully considering the risks. Across millions of calls, human agents maintain average abandonment rates between 3 percent and 5 percent, whereas rates for disclosed AI calls spike close to 30 percent, Shooster said.
“So yeah, maybe you’re saving 50 percent on the labor assets, still, if you’re losing one out of every three leads to your competitor... it’s not even close.”
For small businesses, such as HVAC, plumbing, real estate and personal injury firms, the cost can be devastating. “Each one of those calls could be $15,000, $30,000 a pop,” Shooster said.
And beyond the direct financial cost, there’s the longer tail of reputational damage from negative reviews on social media.
“A lot of these businesses are word-of-mouth and referral-type businesses and I can imagine lots of these businesses having people talking on Facebook and all different types of groups [saying], ‘Hey, don’t use them. You can’t get support. It’s horrible; they don’t care. There’s nobody you can talk to,’” Shooster said.
“That’s the indirect impact that you don’t see on your bottom line, but it is impacting your brand and your reputation.”
The company’s findings highlight a disconnect between how quickly AI is being adopted and how slowly regulation and consumer confidence are catching up. “It’s kind of Wild, Wild West across the world, but especially in the U.S.,” Shooster said. “The technology is moving faster than legislation, and consumers are the ones who have to deal with it.”
With AI systems often retaining and processing user input for training, enterprises need to think carefully about what that means for customer data protection, Shooster said.
“If you're talking to AI, not only is it not a human, but also everything you say is being stored and then trained on and then reused, and then who knows where it's ending up."
“We're not completely anti-AI—obviously there's a place for technology, and it's not going anywhere, but it's good to know what you're talking to and what's going to happen the information that you're sharing.”
Businesses would do well to take a similar approach to compliance with U.S. call recording disclosure laws, which vary by state. Some require only one party’s consent, while others mandate that both parties be informed.
In practice, the call center industry tends to take the cautious route, following the strictest “two-party” disclosure standards to ensure compliance everywhere. The logic is simple: always disclose when a call is being recorded to avoid legal gray areas and stay on the safe side of regulation.