TL;DR:
This blog explores the ROI differences between AI and human agents.
- Virtual agents handle repetitive tasks, provide 24/7 support, and scale seamlessly, making them more cost-effective.
- Human agents can then focus on complex customer interactions.
- Integrating virtual agents reduces employee churn, improving the ROI of both human and virtual agents.
- Virtual agents lower operational expenses, improve first-call resolution rates and enhance retention and profitability.
In today’s competitive business landscape, understanding Return on Investment (ROI) is not just essential—it’s critical for survival.
With profitability tightly linked to smart investments, the rise of virtual agents in contact centers introduces a fresh perspective to this equation.
But what does this shift mean for traditional human agents and the broader ROI picture?
By comparing the operational costs, efficiency, and long-term benefits of human and virtual agents, it becomes evident that adopting AI isn’t just about replacing tasks—it’s about reshaping the support strategy for sustainable growth.
The following sections dive deep into this new paradigm, revealing how virtual agents impact ROI metrics and why businesses are recalibrating their strategies to achieve greater efficiency, satisfaction, and profitability.
But first, What is ROI?
Calculating a business's ROI defines its continued survival. A company with a high ROI will consistently outperform one with a lower ROI.
ROI, therefore, can be defined as a formula that measures a business's profitability relative to its investment.
It is expressed as:
ROI = (Revenue - Initial Investment) / Investment*100
Virtual agents vs Human Agents: Understanding the new paradigm
A few years ago, the entire world was abuzz when Google’s DeepMind defeated the reigning champion of Go.
This achievement was the technological pinnacle of its time, sparking a new era of innovation.
In just seven years, AI technology has advanced so that voice agents can replicate natural human language and speech with remarkable accuracy.
For generations, the customer support industry has been an early adopter of new technologies, from switchboards that revolutionized connectivity to VoIP services that bridged distances.
Unsurprisingly, the customer support industry is the first to integrate virtual agents into daily operations.
An AI-powered virtual agent can transform contact center operations by reducing the workload on human agents and enhancing customer satisfaction.
Customers will no longer endure the grating elevator jazz while waiting for help. Instead, they’ll be greeted by a friendly voice that guides them through their issue and seamlessly transfers them to a human agent when needed.
Does this mean that the era of human agents is over?
No, it shifts their role from chasing calls to building relationships. With AI available 24/7, customers can always reach out, fostering loyalty and increasing retention. Additionally, having an autonomous AI agent working alongside human agents brings other advantages.
- Reduce the time wasted on unproductive leads.
- Incorporating call center AI virtual agents helps boost first-call resolution rates and enhance customer perceptions of human agents.
- With AI gathering critical customer information, human agents can focus on relationship-building rather than repetitive tasks.
What are the ROI metrics for human agents?
Training: To generate generic revenue for a contact center, a human agent must undergo significant training. The duration of the onboarding exercises would be between three and four weeks. However, a human agent will require three to six months of on-the-job training to become proficient.
Recruiting expense: While contact centers can bypass extensive training by hiring experienced candidates, this comes at the cost of higher salaries to compensate for their expertise and skillset.
Salary: The base salary for a qualified new hire is approximately INR 3 LPA, with variations based on their experience and skill level. Salaries represent the largest expenditure for call centers, and without strategic hiring practices, they can significantly impact the enterprise's profit margins.
Employee Churn: The average churn rate in a typical call center ranges between 30% and 40%, driving up recruitment and training expenses as new cohorts of agents must be continually onboarded to replace outgoing staff.
Cost per call: This metric is calculated by dividing the total operational costs by the number of calls dialed and helps asses if the human agents are being utilized efficiently.
First Call Resolution (FCR) Rate: The total number of calls actively resolved in the first call reduces the need for repeat calls, improves customer satisfaction, and lowers operational costs. Ideally, the FCR of a call center should be around 70 and 79%, enhancing customer experience and
Average Handling Time: The time it takes the agent to resolve the customer's query successfully is around 6 minutes. Lower AHT times are directly correlated to improved efficiency and lower operational costs.
Customer Satisfaction Scores: If customers aren’t happy with the service they receive, they will not return to the business. Therefore, having a high CSAT score is essential to the longevity of the enterprise.
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What are the ROI Metrics for An AI Agent?
Time Savings: The primary goal of an AI agent is to minimize the time human agents spend on unproductive calls. AI virtual agents can identify high-intent leads and seamlessly forward them to human agents for follow-up and conversion.
Cost Saving: Virtual agents can be integrated into an existing telephony system for as little as INR 4 per minute. AI-powered virtual agent can be scaled effortlessly as a contact center grows without incurring additional costs.
User Satisfaction: Virtual agents with a realistic human-like voice should be capable of delivering a high Net Promoter Score and boosting customer satisfaction ratings reported by customers.
Quality Assessment: The AI agent continually learns through the LLM that powers it. Therefore, contact centers should routinely assess the Virtual agents' outputs to ensure that the content generated is accurate, relevant, and free of misinformation.
Case studies about the adoption of Virtual agents
Bank of America and Erica
Launched in 2018, Erica has helped close to 32 million Bank of America clients manage their finances. The autonomous Virtual agents' insights helped the clients reduce their recurring payments.
The 19% increase in revenue generated by the AI agent through recommendations of the bank’s other services demonstrates Erica's effectiveness.
Erica's around-the-clock support has improved customer satisfaction and loyalty. Over 98% of Bank of America clients report that Erica manages to provide them with answers to their questions.
Customer support Virtual agents, like Erica, eliminate the need for additional human resources to handle phone lines while enabling existing agents to focus on more strategic tasks.
Camping World and Arvee
Camping World is a US-based company that sells Recreational Vehicles (RVs) globally. It adopted an AI customer support agent to increase customer satisfaction and identify potential gaps in its business.
The launch of Arvee has resulted in a 40% increase in customer satisfaction across all platforms. The impact of deploying autonomous Virtual agents was immediately evident, increasing human agent efficiency by 33% and reducing the average wait time to under 33 seconds.
Hypothetical ROI Analysis Between Human and AI-Powered Agents
The average monthly salary of a human agent in India is around INR 25-30k. A contact center would charge an additional INR 10-15k per month per agent for miscellaneous items like a desk, software, devices, telephony, etc.
Assuming an agent works 25 days a month, the daily cost per agent is approximately INR 1,500, resulting in a total monthly cost of INR 37,500
An agent's daily talk time averages around 200 minutes, translating to a per-minute cost of approximately INR 7.5. This calculation is based on a daily cost of INR 1,500 divided by 200 minutes of talk time.
Introducing Convin AI Phone Call, priced at just INR 3-5 per minute—significantly lower than a human agent's INR 7.5 per minute cost. This makes Convin's AI solution 33% to 60% more cost-effective. The final per-minute cost may vary based on call volume.
When contact centers account for additional costs associated with human agents, such as:
- Agent attrition
- Hiring, onboarding, and training
- Ramp-up time
Operating a contact center exclusively with AI agents, like Convin’s AI Phone Call, can result in realized cost savings of approximately 50%.
Efficiency in Handling Volume:
Recently, a client approached us with a key challenge: a high volume of repeat calls, diminishing their revenue-earning potential.
Despite having 200 human agents, the high volume of calls—particularly repeat calls—limits their capacity to connect with more customers, hindering their ability to drive revenue growth.
This challenge is universal for contact centers worldwide. As call volumes increase exponentially, the human agent support infrastructure struggles to keep up, leading to an inefficient system.
But, an AI agent system does have this problem.
Powered by large language models (LLMs), AI virtual agents can proactively respond to customer queries, send timely reminders, and, with Convin’s AI phone call, emulate human-like persuasion to guide customers effectively. These virtual agents can operate at scale, reaching thousands of accounts simultaneously and efficiently.
Customer Experience Impact:
Consider the following example.
- Scenario 1: Human-Agent Interaction
- Customer A calls a contact center to discuss an issue with renewing their subscription.
- The call is initially answered by an inexperienced agent still in training.
- Overwhelming call volumes cause the center to struggle with management, leading this agent to handle the issue.
- The agent mislabels the customer’s problem due to a lack of understanding and closes the ticket prematurely.
- The customer has to call again, as their concern remains unresolved.
- High call volumes prevent the customer from connecting with a human agent, increasing frustration.
- After three attempts, the customer reaches a human agent and expresses frustration.
- Despite the customer's frustration, the agent resolves the issue amicably.
- Nevertheless, the repeated attempts and unresolved issues lead to a less-than-pleasant experience.
- Customer frustration contributes to high employee churn in contact centers, with global turnover rates between 30% and 45%.
- Scenario 2: AI Agent Interaction
- The customer connects instantly to an AI agent without any waiting time.
- The AI agent accurately assesses the severity of the issue and attempts to resolve it.
- If the AI agent cannot resolve the problem, it seamlessly transfers the call to an available human agent.
- The human agent promptly addresses the customer’s concern.
- The human agent avoids the customer's frustration, leading to a satisfied customer and another success for the contact center.
Customer Loyalty and Retention:
Customer loyalty is the silver bullet that can make or break a business. Retention hinges on how effectively the customer service team resolves issues. However, human agents have limitations in what they can offer to customers.
However, an AI agent can create and send personalized customer messages after their calls, enhancing brand loyalty. Enterprises can also analyze customer behavior and sentiment to anticipate future needs and deliver more comprehensive service.
Tracking customer sentiments allows contact centers to address issues proactively before they arise. With the support of virtual agents, contact centers can fine-tune their strategies to cater to each customer individually.
Conclusion
Integrating Virtual agents alongside human counterparts offers a compelling solution as businesses adapt to changing customer expectations and operational challenges. Virtual agents enhance efficiency, reduce costs, and provide round-the-clock support, while human agents continue to bring empathy and expertise to complex scenarios. This give-and-take equation between AI and human agents allows contact centers to achieve the best of both worlds—optimized operations and improved customer experiences.
Ultimately, the ROI difference between human and Virtual agents is not about choosing one over the other but about leveraging their strengths to build a future-ready support ecosystem. Forward-thinking organizations embracing this model are not just increasing profitability—they’re redefining what customer service success looks like.
Get a tailored ROI analysis to make your call center cost-effective. Contact us today.
FAQ
1. What is a Virtual Agent, and How Does It Improve Call Center Efficiency?
Answer: A virtual agent is a software-based system that simulates human conversations and performs specific tasks within a contact center. These AI-powered virtual agents can handle repetitive queries, automate call routing, and provide seamless customer experiences, reducing the need for extensive human intervention.
2. How Do Virtual Agents in AI Enhance Customer Interactions?
Answer: Virtual agents in AI leverage advanced algorithms to assess customer intent and context, enabling them to respond more accurately. These AI-powered virtual agents ensure that customers receive prompt, effective resolutions while human agents focus on handling complex issues, leading to a more personalized and efficient interaction.
3. What Are the Benefits of Integrating Virtual Agents with Human Agents?
Answer: Integrating virtual agents alongside human agents creates a synergistic approach to customer support. Virtual agents manage routine tasks, scale effortlessly to meet call volume spikes, and provide 24/7 support. This gives human agents more time to focus on critical tasks requiring empathy and in-depth problem-solving.
4. Can AI-Powered Virtual Agents Reduce Operational Costs?
Answer: Yes, AI-powered virtual agents are highly cost-effective. They automate mundane tasks, minimize the need for continuous training, and can handle multiple customer interactions simultaneously. Reducing manual workload and scalability helps call centers cut costs while improving overall service efficiency.
5. How Do Virtual Agents Contribute to Customer Retention?
Answer: Virtual agents contribute to customer retention by delivering consistent and personalized experiences. These AI-powered virtual agents analyze customer data, predict needs, and proactively address issues. This enhances satisfaction and fosters long-term loyalty through seamless, real-time support.
