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UK businesses continue to face rising costs, and many are finding it harder to protect their margins. The Confederation of British Industry (CBI) recently reported that profitability across the UK service sector has fallen again as cost pressures continue to build.
With budgets under strain, businesses are exploring ways to work more efficiently. Automation and AI often feel like natural options, especially in customer service where technology can handle large volumes of queries at any time of day. Even so, the idea of replacing human agents entirely has proved more complex than expected.
When automation works and when it doesn’t
Some companies have introduced automation successfully. Salesforce, for example, replaced 4,000 customer support roles with AI agents, which now handle around half of all customer conversations. Human teams remain involved to oversee complex issues and maintain quality.
Others have found the transition more challenging. Klarna’s large‑scale shift to AI created a backlog of unresolved issues and rising customer frustration. The company had to reassign staff from marketing and engineering to help manage the volume of complaints generated by the system.
Several major brands, including McDonald’s and Starbucks, have also stepped back from full automation after seeing the impact on customer satisfaction. Whilst cost savings are attractive, these examples highlight how businesses need to be more cautious and avoid veering too sharply to an AI-led customer service model.
What customers actually want
Despite the rapid growth of AI, customer expectations have stayed consistent. SurveyMonkey’s 2026 Customer Service report found that customers still value a human touch:
89%
believe companies should always offer the option to speak to a human
The research also shows that people value a human touch and feel human agents understand their needs better, explain things more clearly and provide more accurate information. These qualities shape how customers feel about a brand long after the interaction ends and are a key to a good customer experience.
79%
of people strongly prefer interacting with a human over an AI agent
Why a human touch defines good service
Good customer service and high customer satisfaction rely on qualities that people naturally bring to a conversation.
Empathy
Empathy helps customers feel understood and supported. When someone is stressed or unsure, a thoughtful response can quickly build trust.
Judgement
Judgement allows an agent to read a situation, consider the options and choose an approach that feels fair and proportionate. It helps resolve issues in a way that feels personal rather than purely rules based.
Accuracy
Accuracy gives customers confidence that their issue is being handled properly. Clear, correct information reduces repeat contact and strengthens trust.
Reassurance
Reassurance helps customers feel safe and informed. A calm, steady tone can turn a difficult moment into a manageable one.
Together, these qualities create high quality customer experiences that are remembered and valued.
Why good service drives profitability
Ensuring customers can speak to a human agent in sensitive, distressing or complex situations is essential for businesses who are looking to protect and increase their bottom line.
Poor service is costly. Research from the Institute of Customer Service shows that bad customer experiences cost UK businesses 7.3 billion pounds every month
Businesses with higher‑than‑average customer satisfaction consistently achieve stronger revenue growth, higher operating profit, and greater revenue per employee. Good customer service strengthens relationships, encourages loyalty, builds trust, increases referrals and supports deeper product usage. All of this contributes to improved commercial performance and increased profitability.
A balanced path forward
The most effective customer service blends the speed and efficiency of automation with the empathy and judgement of human expertise. AI excels at routine questions, simple transactions, high‑volume information requests and out‑of‑hours support, but it cannot replace the understanding, clarity and confidence that skilled human agents bring to complex issues, emotionally sensitive situations, high‑value accounts and regulated environments.
Many organisations that moved quickly towards automation have since adjusted their approach after seeing the impact on customer experience, recognising that short‑term cost cutting can be at the expense of customer satisfaction and long-term profitability. When AI handles the straightforward tasks and a human touch is applied where nuance matters, businesses create customer experiences that build loyalty, strengthen relationships and enhance reputation.
