The Value of Humanization in Customer Service


( Under Review )
Recent advances in information technologies have put customer service, especially text-based ones, at the forefront of a new wave of service automation. As algorithms become increasingly capable of handling customer service queries, customers are often uncertain whether they are served by humans, and managers are left to question the value of keeping human agents once the technology matures. The current paper studies this important and timely question by quantifying how a simple policy change that enhances customers’ perception of them being served by human agents affects 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 to customer queries on Twitter, thereby making the agent more humanized in the minds of customers. Various empirical analyses consistently show that customers are more willing to engage, and upon engagement, more likely to reach a resolution, when agents are perceived as more humanized. Furthermore, we find no evidence of elevated verbal aggression from customers to more humanized agents, hence humanization seems to incur no additional cost to agents. Therefore, our findings suggest a readily available and almost costless strategy for customer service provision on social media: signal humanization through a signature of each agent. Despite the increasing trend of automating customer service, our study reveals the importance of humanization, which can at least be partly interpreted by our bias in favor of humans when it comes to customer service.