How customer reacts to your automated products

New, transformative technology is on the rise and more and more companies are offering automated products to their customers to simplify their everyday life. Many companies are good at asking customers how they think about their tech products, yet what people are feeling about them is less studied. Is this a problem? Yes. Why? Well, not knowing this can have a clear impact on several success factors, like word-of-mouth, perceived loyalty, and overall customer satisfaction.

Humans are creatures of habit. We don’t like uncertainty and fear the unknown. As AI and human intelligence take up more space in our lives, so does the uncertainty. Googling how people feel about AI development, many surveys show that people are both concerned and excited, but the fear of its risks and potential harm to humankind is prominent. For a large chunk of society, AI is raising worrying questions and is associated with many negative connotations. This said, if you are a company that relies on AI or are considering going in that direction to help your customers, it’s time that you focus on the emotions your technologies evoke. Research shows that people will react differently if they are being helped by a human or algorithms. 

A study found that, in terms of acceptance, the participants felt differently about decisions made by AI than those made by humans. Even if the outcome was the same, the participants whose requests (e.g. applying for a bank loan) were accepted by an individual felt more joy than those whose requests were approved by a loan algorithm.1 How come? The researchers have several hypotheses for this. For instance, being accepted by a human might create a sense of social belonging, while being evaluated by an algorithm might evoke feelings of disrespect. An explanation could also be drawn from Attribution Theory (Jones & Davis, 1965; Kelley, 1967) in that consumers are more motivated to internalize favorable decisions (it becomes a part of the kind of person you are). This process however is more difficult when the decisions are made by an algorithm and not a human. Another reason could be that consumers are known to perceive decisions made by algorithms (compared to humans) as less fair. Therefore it could be a perceived unfairness of algorithmic versus human decision-makers that explains the results.

Interestingly though, this difference was mitigated for unfavorable decisions, e.g. when an application was rejected. When participant’s requests were turned down, participants felt the same way whether the rejection was delivered by a person or by AI. In both cases, they tended to blame the decision-maker (human or AI) for their failure to be approved rather than themselves.2 

This tendency can also affect a company's ratings. The study showed that when participants' bank loan applications were approved by an algorithm – instead of a loan officer –, they had a more negative attitude towards the bank and as a consequence, they gave lower ratings to the bank and were also less likely to recommend it to others. Meanwhile, however, the effect of the decision-maker type was significantly mitigated when the application was rejected. Participants who had their applications turned down (either by AI or a loan officer) gave the same ratings to the bank and felt the same willingness to recommend it to others.

Deliver positive news by a human

The study results indicate that if you deliver positive news to a customer, make sure it’s done by one of your employees. If you due to high demand or time limitations need to use AI, the same study shows that humanizing your AI (e.g. with a fictitious name and avatar) could reduce the likelihood of less positive reactions among customers.

Design with emotions in mind 

Automatization of technologies is everywhere and as a company, you should embrace the possibilities that new technology gives. However, when doing so it’s important to acknowledge how automatization makes people feel using them. This requires you as a company to take human feelings into account when designing these new technologies and also other aspects of your business – like strategies, processes, and communication. If not created with emotions in mind, it could lead to lower customer satisfaction, and that’s the last thing we want, right?

1 Yalcin, G., Lim, S., Van Oselaer, Stijn, M.J., & Puntoni, S. (2021). Thumbs Up or Down: Consumer Reactions to Decisions by Algorithms Versus Humans. Journal of Marketing Research, 56(4). 10.1177/00222437211070016

2 Ibid (2021)