The Capgemini Research Institute’s latest report, “Unleashing the Value of Customer Service: The Transformative Impact of Gen AI and Agentic AI”, reveals how generative AI (gen AI) and agentic AI are redefining customer service. Once viewed as a cost center, customer service is now emerging as a strategic value driver—boosting customer loyalty, enhancing brand perception, and driving business growth. However, the report highlights that while virtual agents offer efficiency and speed, consumers still prefer human agents for their empathy and creative problem-solving skills. This underscores the need for a hybrid model where AI-powered virtual agents and human representatives work in tandem to deliver exceptional service experiences.
Customer Service: The Untapped Value Driver
Customer service plays a critical role in shaping brand perception and driving customer loyalty. According to Capgemini’s report:
- 60% of consumers view customer service as extremely important in influencing their perception of a brand.
- More than 50% of consumers are willing to leave a brand due to poor customer service—even if they are satisfied with the product itself.
However, the report reveals widespread dissatisfaction with current customer service standards:
- Only 16% of customer service agents report being satisfied with their roles, citing inefficiencies and lack of engagement.
- 65% of executives admit to low operational efficiencies in their customer service operations.
These figures highlight a significant opportunity for businesses to redefine customer service by leveraging AI to improve both customer satisfaction and operational efficiency.
The Rise of Gen AI and Agentic AI in Customer Service
Generative AI and agentic AI are rapidly transforming customer service functions. According to the report:
- 86% of organizations have already implemented, initiated pilots, or are exploring the use of gen AI in customer service.
- The technology is proving to be a game-changer, addressing key pain points such as slow issue resolution, inconsistent experiences, and operational inefficiencies.
Companies using gen AI are already witnessing substantial benefits:
- 9 in 10 organizations are either seeing or expecting improved first-contact resolution rates, reducing the need for repeated interactions.
- 89% of organizations using gen AI are already experiencing or anticipating faster response times.
- 85% report or expect to achieve higher agent productivity.
- Similar proportions are seeing or anticipating reduced operating costs through AI automation.
These results demonstrate the transformative potential of AI in enhancing customer service efficiency, reducing costs, and delivering better customer experiences.
Empathy + Efficiency: The Power of Human-AI Collaboration
Despite the efficiency gains from AI, the report emphasizes the enduring value of human empathy in customer service.
- While chatbots and virtual agents are valued for their speed and convenience, over 70% of consumers still prefer interacting with human agents—especially for complex issues that require creative problem-solving.
- However, preferences vary by generation:
- Younger consumers are more inclined toward AI-powered chatbots due to their tech-savviness and preference for speed.
- Older consumers prefer human agents for their empathy and emotional intelligence.
As AI capabilities continue to improve, customer service is expected to evolve into a Customer Experience (CX) center, where hybrid teams of human and virtual agents collaborate. This hybrid model will combine the efficiency of AI with the empathy and creativity of human agents, delivering a seamless, personalized, and effective customer service experience.
Barriers to AI-Powered Customer Service Transformation
Despite the clear benefits, less than half of organizations feel fully prepared to implement AI-powered customer service.
- Only 49% of organizations consider themselves ready for AI adoption.
- This indicates a need for companies to overhaul their operating models, modernize their technology infrastructure, and strengthen their data foundations to fully capitalize on AI’s potential.
Without these foundational elements in place, organizations risk failing to unlock AI’s full transformative value.
The Path Forward: Key Recommendations for Businesses
To successfully integrate generative and agentic AI into customer service, businesses need to:
- Invest in AI-Ready Infrastructure:
- Modernize legacy systems and adopt scalable, cloud-based platforms to handle AI workloads efficiently.
- Blend AI with Human-Centric Service:
- Develop a hybrid model where AI handles routine queries while human agents focus on complex, high-empathy interactions.
- Enhance Agent Experience:
- Use AI to automate repetitive tasks, allowing agents to focus on higher-value interactions, boosting job satisfaction and productivity.
- Leverage Data for Personalization:
- Use AI-powered analytics to gain deeper customer insights, enabling more personalized and proactive service.
- Prioritize Continuous Learning:
- Implement regular AI training programs to upskill employees, ensuring they can effectively collaborate with AI tools.
Conclusion: AI-Powered Customer Service as a Competitive Differentiator
The Capgemini report clearly demonstrates that AI-powered customer service is no longer just about operational efficiency—it’s a strategic value driver that can enhance customer loyalty, drive brand perception, and create competitive advantages.
Organizations that embrace a hybrid customer service model, combining the speed and scalability of AI with the empathy and creativity of human agents, will be well-positioned to meet evolving consumer expectations and thrive in an increasingly competitive market.
As businesses continue to adopt and refine their AI-driven customer service strategies, those that invest in the right technology, infrastructure, and talent will unlock new levels of customer satisfaction, operational excellence, and long-term business value.
