Let’s face it: AI in customer service has gone from “sci-fi daydream” to “must-have on your quarterly roadmap” faster than you can say, “Sorry, I don’t understand - could you repeat your query?”. But as we all rush to plug in the latest chatbot or virtual assistant, it’s worth pausing to ask: are we really making things better for customers, or just giving them a new kind of hold music?

Here’s the real story on how AI is reshaping the customer experience; what it’s brilliant at, where it still needs a little… well, human coaching, and why thoughtful design (and a dash of common sense) matter more than ever.

The state of play: AI, now with 80% more buzzwords

By the end of 2025, a whopping 80% of customer service teams are expected to be using generative AI. That’s not just because it sounds cool in a press release (though, let’s be honest, it does). It’s because customers expect quick, personal, 24/7 support and nobody wants to be the brand that’s still “looking into it”.

AI tools are everywhere: answering questions, analysing data, and sometimes even apologising for things that aren’t their fault. But the real magic happens when these tools are woven into the platforms that customer service teams actually use, making everyone’s life a little easier.

AI’s superpowers: What it gets right

AI brings several superpowers to the table, starting with its ability to provide round-the-clock support. Unlike humans, AI doesn’t need breaks, never gets tired, and is always available. This means customers can get assistance at any hour-whether they’re up late, working overnight shifts, or simply in a different time zone. For businesses, this translates to uninterrupted service, and for human agents, it means fewer stressful Monday mornings spent catching up on unresolved issues.

Another major advantage is the speed at which AI can deliver answers. No one enjoys waiting on hold, and with AI-powered chatbots handling routine queries instantly, customers are spared the frustration of endless hold music and impersonal assurances. This efficiency doesn’t just benefit customers; it also allows human agents to dedicate their time and expertise to more complex or sensitive issues that require a personal touch.

AI also excels at personalising interactions on a large scale. By analysing vast amounts of data, it can recall individual preferences-like how a customer takes their coffee or when they prefer to receive invoices. When used thoughtfully, this creates those delightful moments where customers feel understood, without crossing into territory that feels invasive or unsettling.

Perhaps most importantly, AI’s ability to take on repetitive, monotonous tasks frees human agents to focus on what they do best: solving real problems, demonstrating empathy, and making meaningful connections. With the routine work handled efficiently in the background, agents are empowered to bring their creativity and compassion to the forefront, ultimately enhancing both the customer experience and their own job satisfaction.

Where AI still needs a helping hand

While AI has made impressive strides in customer service, there are still areas where it falls short and needs human support. For instance, AI can mimic politeness and friendliness, but its attempts at empathy often feel hollow. If it had a face, its smile wouldn’t quite reach the eyes. When customers are dealing with sensitive or complex issues, they crave a genuine human connection; someone who truly listens and cares, not just a voice reciting lines from a script.

Even with all its advancements, AI can still stumble over the nuances of human communication. Sarcasm, slang, and impassioned rants often trip it up, and sometimes its “helpful” responses only make matters worse. Context is difficult for machines to grasp, and what’s intended as assistance can inadvertently add fuel to the fire.

Integration is another challenge. When AI systems operate in isolation, it’s like having a brilliant intern who’s never been introduced to the rest of the team. Disconnected technology leads to incomplete answers and frustrated customers, undermining the seamless experience that businesses strive to deliver.

There’s also the risk of over-automation. It’s tempting to let AI handle everything, but customers quickly sense when they’re interacting with a robot - especially when things go wrong. Too much automation can make a brand seem cold, rigid, or out of touch, and that’s the last impression any company wants to leave.

Finally, there’s the issue of AI “hallucinations”, moments when the technology goes off script and produces inaccurate or bizarre responses. This is why it’s crucial to put guardrails in place, such as using Retrieval-Augmented Generation (RAG), to ensure AI doesn’t say something regrettable or misleading.

Ultimately, while AI can handle many tasks with speed and efficiency, it’s the human touch that bridges the empathy gap, interprets nuance, and ensures that customer service remains genuinely helpful and trustworthy. The most effective approach is a thoughtful blend of technology and humanity, where each complements the other’s strengths.

The secret sauce: Human + AI, not human vs. AI

The best customer experiences aren’t the result of choosing between humans and technology, but rather from a thoughtful collaboration between the two. When AI is allowed to excel at what it does best - processing information quickly, working tirelessly, and providing instant answers - it serves as the ultimate sidekick for your customer service team. But as soon as a situation becomes complex or emotionally charged, it’s the human agents who step in, bringing empathy, creative problem-solving, and even a sense of humor to the table.

While advances in technology mean we’re getting better at teaching AI to recognize when someone is upset or frustrated, true emotional intelligence still comes from people. The real challenge is in designing systems that know when to pass the baton; letting AI handle the straightforward interactions and then seamlessly handing over to a human agent when a more nuanced touch is needed. Ideally, this transition happens without customers having to repeat themselves or start their story from scratch. It’s not rocket science, but it is the result of good design and a clear understanding of each team member’s strengths, whether silicon or human.

By combining the speed and efficiency of AI with the warmth and understanding of human agents, companies can deliver service that feels both personal and effortless. This partnership ensures that customers get the best of both worlds: fast, accurate support when they need it, and genuine empathy when it matters most.

How to make AI work for you (and your customers)

When considering how to implement AI in customer service, it’s important to start by identifying genuine challenges rather than adopting technology simply because it’s trending. Take a close look at where AI can make a meaningful difference and set clear objectives to measure its impact. For instance, if a large proportion of your support calls are about issues already covered in your FAQs, or if you regularly onboard new customer service representatives who need to get up to speed quickly, these are areas where AI could offer real value.

Whatever you do, once you decide that AI can help your business, don’t throw the kitchen sink at it. There are some tasks that only AI (or a human) can do easily, but there are many others that existing tools and frameworks will be faster, cheaper and better at. Getting your fresh out of the box AI service to deal with everything will get expensive and frustrating very quickly.

Selecting the right tools is equally crucial. The best AI platforms are those that integrate smoothly with your existing systems, are easy to customise, and don’t require specialist expertise to operate. It’s a bonus if the provider offers reliable support themselves, demonstrating that they stand behind their product.

The effectiveness of your AI will depend heavily on the quality of information it has access to. Investing in a robust, up-to-date knowledge base written in clear, accessible language is essential. The same resources you use to train your employees can be invaluable for teaching your AI agents as well.

Transparency builds trust, so it’s important to let customers know when they’re interacting with a bot and to make it easy for them to escalate to a human if they wish. Pretending your AI is a real person can quickly undermine confidence if customers discover otherwise.

Finally, just as your customers’ needs evolve, so should your AI. Continually monitor its performance, update its training, and refine its responses to ensure it continues to meet expectations and deliver value. By taking this thoughtful, iterative approach, you’ll be well positioned to harness the strengths of AI while keeping the customer experience at the heart of your service. 

Measuring success: It’s not just about saving money

Sure, AI can cut costs, but the real question is: Are your customers happier? Are issues resolved faster? Are your agents less stressed? If the answer’s yes, you’re on the right track.

  • Customer satisfaction: Are you getting more “thanks!” and fewer “let me speak to your manager”?
  • Resolution rates: Is AI actually fixing problems, or just bouncing people around?
  • Agent satisfaction: Do your agents feel empowered, or like they’re training their robotic replacements?
  • Customer loyalty: Are people coming back, or running for the hills?

What’s next? The (slightly) smarter (slightly) distant future

Looking ahead, AI in customer service is poised to become even more sophisticated and intuitive. As technology advances, AI will increasingly anticipate customer needs, sometimes even before customers themselves are aware of them. When this level of hyper-personalisation is executed thoughtfully, it can feel almost magical, creating seamless and memorable experiences. However, if handled poorly, it risks crossing the line into the uncanny or intrusive, leaving customers feeling uncomfortable rather than cared for.

We are also on the brink of a new era where AI is not just following scripts but actually making decisions and taking meaningful actions. This shift towards more agentic AI is both exciting and a little daunting. It opens up possibilities for greater efficiency and responsiveness, but it also underscores the importance of keeping humans involved in the process. Human oversight ensures that decisions remain grounded in empathy, ethics, and common sense, providing a necessary balance to the speed and scale of automated systems.

The future of customer service will be defined by truly seamless omnichannel experiences. AI will play a central role in connecting chat, email, phone, and social channels, so customers can move effortlessly between them without having to repeat themselves or start over with each new interaction. This integration promises a level of convenience and continuity that has long been the goal for customer service teams.

Ultimately, these advancements highlight the importance of thoughtful design and a human-centred approach. As AI becomes more capable, its greatest value will come from working alongside people, enhancing both the efficiency and the warmth of customer service interactions. The goal isn’t to replace the human touch, but to amplify it, ensuring that technology serves to make life easier for both customers and the teams supporting them.

The bottom line: Keep it human

The best AI in customer service doesn’t replace people, it helps them shine. It’s about making life easier for your customers and your teams, not just your finance department.

So, as you think about the future of AI in your customer service, what kind of experience do you want for your customers and your teams? Are you looking for technology that simply automates tasks, or for solutions that truly empower people to do their best work? How will you ensure your AI platform is designed with transparency, empathy, and adaptability at its core?

At The49, these are the questions we help our clients answer every day. Drawing on our experience building and scaling digital ventures, developing tailored tech solutions, and crafting strategies that redefine industries, we know that the most successful AI platforms are those built for people-first outcomes, not just process efficiency or cost savings. Our team can work closely with you to identify real opportunities, integrate AI seamlessly with your existing systems, and iterate relentlessly until we deliver the right results.

Whether you’re just starting to explore AI or ready to take your customer experience to the next level, our approach is always transparent, collaborative, and focused on building trust at every step. Because the future isn’t a choice between humans or AI - it’s human plus AI. And that’s a partnership worth building.

At The49, we help teams design customer experiences where AI and humans work in harmony, so service feels seamless, intuitive, and genuinely human. Take a look at our startup, Jack Burton.