Would you pay for customer service from a human?

I’ve been a Verizon customer for years. So I was shocked, a few months ago, when the company’s IVR bot informed me that if a human customer service agent was brought in to handle my payment, Verizon would charge me $7.

Say what?

I write about customer service. I know that sophisticated businesses are hyper-focused on making customers feel loved or recognized, and building experiences that create the kinds of connection that customers want. There are whole movements around personalization, empathy, agent empowerment, and omnichannel service…. all to the end of customer retention. That’s why it was hard to reconcile the $7 charge for the honor of paying my bill with the assistance of a person.

“Oh no,” I thought, “is this where AI is taking us? Are we going to have to pay a premium now for human customer service?”

Fancy Mills, Director of Training and Content for HDI, and group training and content director for the International Customer Management Institute (ICMI), says no. “This is the opposite of where the industry is going…” she said. “People really hate this.”

Judging from the comments on Verizon’s community forum (of which you need to be a member to view), she’s right. To quote one customer ranting about the company, it is “…getting the most amount of money…while having no real sense of compassion. Present Case in point, the $7.00 AGENT SERVICE CHARGE for each call.”

“Oh no,” I thought, “is this where AI is taking us? Are we going to have to pay a premium now for human customer service?”

To be fair, Verizon doesn’t charge $7 for each call; only for those services it deems simple enough to accomplish by self-service, like making payments. Verizon also isn’t the only wireless company to try charging customers a fee for live agent support, and other industries are giving it a try, too. Spirit Airlines, for example, will charge you to have an agent at the counter print your boarding pass, should you fail to print your boarding pass at home. Strangely, there is also a discount for buying a ticket at the airport from an agent, a deal that has to do with tax laws. As a budget airline offering low fares, Spirit is no doubt trying to offset its overhead by charging for anything that’s not strictly necessary.

Customer tolerance vs. satisfaction

Clearly there’s an economic incentive to push customers toward self-service options. As Mills notes, it costs companies two-to-three times as much to serve a client through a human interaction as through a self-serve portal. One Gizmodo writer did some number-crunching to estimate how much money companies might make off the fees. Looking at a conservative 10 percent of people over the age of 65 who have smartphones, but don’t use the internet, the writer figured that would come out to about 1.6 million people. If each paid an average fee of $6.60 a month to pay a bill through an agent, that would rack up roughly $126 million a year for the big wireless carriers. And that doesn’t even include how much the companies will save on transactions in which customers have been discouraged from seeking human help. Of course, that’s a drop in the bucket for most of these companies. Verizon’s 2018 revenues, for example, were $130 billion.

Verizon, as with the others, seem pretty sure they’re on solid ground. The company’s response to the customer above was:

Please keep in mind that our goal is for no one to pay this fee. We have so many ways to pay the bill quick and easy without interacting with a representative, it makes it easier for you to make a payment. Check out this link for payments…

While this is true, there’s a fine line between making self-service available to those customers who prefer it, and pushing customers to self-serve. Some people aren’t just being stubborn; they really need human help—and they may also be the ones who don’t have extra money to pay for it.

Some people aren’t just being stubborn; they really need human help—and they may also be the ones who don’t have extra money to pay for it.

Companies are gambling on customers’ levels of tolerance, Mills said. This involves a calculation of how little service a customer is willing to tolerate and how much they’re willing to pay for better service. Also how much they’re willing to put up with before they switch companies. Ironically, the Gizmodo article said, the only big carrier not charging a fee for assistance with payments is Sprint, who may have learned from a fiasco named Claire in the early 2000s.

Sprint introduced the automated Claire system around 2002. Customers could work with Claire, or pay a fee to deal with a breathing human. As someone demanded in a forum at the time: “Does Claire suck or what?”

Sprint seems to have overestimated customers’ levels of tolerance…and how functional the tech was at the time.

[Read also: Not all great customer experiences are convenient]

People who need people

The reason I needed to talk to a person was because I had a “situation” in which I needed to push back a scheduled payment. I had once previously attempted this through the automated system, but the payment date wasn’t changed and there was no record of what I’d done. So the payment went through, the money wasn’t there…you know how it goes. It may have been my fault, if I’d missed a button or step, but either way, it was an experience I didn’t want to repeat. I was stressed about money at the time, so learning that Verizon was going to charge me extra for what seemed to me pretty standard customer support did not endear them to me.

Other people have even more compelling reasons to talk to a person. For example, some elderly people, or others uncomfortable with technology; or people with disabilities; or just people who are feeling anxious. Michelle A. Shell, a researcher and doctoral candidate at Harvard Business School in the Technology & Operations Management Unit, co-wrote a piece for the Harvard Business Review entitled “Why Anxious Customers Prefer Human Customer Service”. She worked on the research with Ryan W. Buell, associate professor of Service Management in the Technology and Operations Management Unit at Harvard Business School, and faculty chair of the Transforming Customer Experiences executive education program.

“When people feel anxious, it’s human nature to turn to others for help,” the article said. “Yet many companies in high-anxiety settings – like financial services and healthcare – are funneling nervous customers to self-service technologies (“SSTs”) – kiosks, websites, and smartphone apps – isolating them at the precise moment when they’re most keen for connection.”

In an interview, Shell told me that part of her interest in this topic was sparked before she began her academic career, when she managed online financial planning customer interfaces in financial services.

“Year after year, I marveled at the fact that no matter how much we designed, tested, redesigned, and introduced new functionality to the platforms to make it as easy as possible for customers to help themselves, they simply kept calling our phone representatives — who logged in to the exact same systems — and often just listened while the customers conducted the transactions themselves. I was curious about what was really driving this inefficiency. As I’ve come into broader contact with companies across industries, I’ve learned that there is quite a bit more that we need to understand about human behavior in order for companies to achieve their goals, whether it is efficiency or increased customer engagement, when introducing new technologies.”

[Read also: The Magnolia method: Scaling authenticity in customer service]

Giving anxious customers access to human contact, their research showed, has a positive affect on how customers feel about their own decision-making, and that has a positive effect on how trusting they feel toward the company serving them. While the researchers weren’t able to name a dollar figure, they did assert that both trust and decision satisfaction boost customer retention, profitability, and other customer value metrics. The credit union they studied found there was a greater likelihood for customers who were invited to speak with a loan officer to close an approved loan. And yet they had no evidence that those customers cost more in terms of service.

Giving anxious customers access to human contact, their research showed, has a positive affect on how customers feel about their own decision-making, and that has a positive effect on how trusting they feel toward the company serving them.

Removing the choice to speak to an agent, or putting impediments in place to divert customers from agent interactions, could cause dissatisfaction. Conversely, when companies make human help more easily available, Shell said, it reduces the customer’s anxiety level, even though very few actually used the human contact option. In fact, while it wasn’t included in their conclusions, she said they learned of a European bank that actually incentivized customers to give one another financial advice. That, she thought, was an interesting model.

“It might be that companies who charge extra for customers to talk to a person, particularly if the customer is feeling anxious, may be shooting themselves in the foot twice,” Shell said, as they’ll be penalized by the effects of customer anxiety and by making it harder for customers to access the help/assurance they need.

Shell said that remains to be studied.

In the meantime, it will be interesting to see how this pans out. Most companies that charge a fee to talk to an agent are those in which changing providers is difficult, so they can get away with it. One hopes, though, that in a world where customer experience is key, these policies will eventually fade away. This is, after all, a very human business.