The value of humanization in customer service

Abstract

As algorithm-based agents become increasingly capable of handling customer service queries, customers are often uncertain whether they are served by humans or algorithms, and managers are left to question the value of human agents once the technology matures. The current paper studies this question by quantifying the impact of customers' enhanced perception of being served by human agents on customer service interactions. Our identification strategy hinges on the abrupt implementation by Southwest Airlines of a signature policy, which requires the inclusion of an agent's first name in responses on Twitter, thereby making the agent more humanized in the eyes of customers. Multiple empirical analyses consistently show that customers are more willing to engage, and upon engagement, more likely to reach a resolution, with more humanized agents. Furthermore, we find that customers do not behave more aggressively to more humanized agents, hence humanization incurs no additional cost to agents.