The strongest customer relationships are formed by human connection. And fueling customers' psychological needs is a powerful and cost-effective strategy for building customer satisfaction, loyalty and retention, according to Dr. Ron Friedman, the founder of ignite80 and social psychologist specializing in human motivation.

“We have decades of research showing that people have three basic human psychological needs that extend to every experience in life and so we know, for example, that if people have these needs met at work, they're going to be healthier, happier and more productive — if they have it in their marriages, their marriages are going to be more successful,” Friedman said. “Therefore, it stands to reason that the same psychological needs also extend to the consumer experience.” 

What Are the 3 Basic Human Psychological Needs?

According to Friedman, there are three things that meet a human’s basic psychological needs:

  • Mastery: Feeling like you're good at what you do and that you're growing on a regular basis. Of those surveyed 61% prefer being taught how to solve a problem independently over having the vendor solve it for them.
  • Relatedness: Feeling like you're connected and respected and valued by others. The research indicates that 70% of vendors who provide good service know their customers personally, compared to only 33% of vendors with poor service. Along the same theme, customers prefer vendors who call them by their first name and use humor, implying a closer relationship.
  • Autonomy: The experience of choice. The majority of respondents (58%) said they preferred being asked to choose from a few solutions to a problem, over having the problem solved with a single solution.

Related Article: How Do You Measure Customer Success? Very Carefully

The Gap Between Generation Z and Baby Boomers

Getting into the psyche of customers can yield some interesting results for the business of CX.

Friedman teamed up with Front, a communication and software company, for a survey, “The Science Behind Strong Customer Relationships,” in which researchers discovered that over two thirds of respondents prefer excellent customer service over excellent pricing. Friedman said that one of the most interesting findings in the research is that the older the customer, the shorter the leash.

While the study shows that Baby Boomers will only wait the time it takes to boil an egg to speak to a human on the phone (about eight minutes), the results tell a different story for Gen Z, who are willing to wait the length of a movie (2 hours and 14 minutes) for that same phone call.

And as far as waiting on an email response, Baby Boomers will give it just two hours, while Gen Z is willing to wait half a day. 

“The single best predictor of strong customer service is a quick response time. But there's some nuance there because younger customers are vastly more forgiving and older customers are a little bit merciless,” Friedman said. “In most cases, budgetary decisions are controlled by senior staff members, which is why if your response times are lengthy and senior team members trying to reach you, you're putting the business relationship at risk.”

Related Article: Do Your Brand's Values Align With Those of Gen Z?

The Chatbot Advantage

According to The State of Customer Care in 2022 by McKinsey & Company, organizations struggling to find talent plan to expand digital interactions by one and a half times by 2024 — in particular by increasing the use of chatbots and AI tools. In addition, they point out that new hires require significant staff training, with 41% of surveyed leaders reporting that it takes between three and six months to train a new employee for optimal performance; further, 20% say it takes more than six months.

Unlike most human workers, chatbots can offer quick, efficient 24/7 customer support and service, and they may assist in retaining the remaining human workers by taking on the more repetitive, mundane jobs, so the humans can focus on more rewarding projects. They’ve also come a long way over the years, and today the market is flooded with variety — from rule-based chatbots for handling simple tasks to those that incorporate high performance AI.

Greg Bennett, director of conversational design at Salesforce, cited the State of Service report that shows a 30% increase in the number of organizations offering customer service through chatbots.

"Chatbots are definitely not the only piece to the customer service puzzle but AI-powered chatbots are a great solution to answering simple questions," Bennett said. "By using bots to handle simple customer service tasks, agents have more time to focus on complex service interactions that require a human touch — especially when it comes to showing empathy, which helps establish long-lasting customer relationships.”

Can You Fulfill Customer Expectations?

But no matter how advanced the tech or human the AI, Friedman said much of the customer experience comes down to customer expectations — and the expectation the customer brings into the experience can color everything that happens from then on forward.

Learning Opportunities

In other words, one bad experience with a chatbot in the past is sometimes all it takes for a customer to retain a permanent negative perception of the tech.

“From the business owner or marketing perspective, you can have the best chatbot in the world and that won't matter if your customers experienced negative experiences prior to interacting with your chatbot or Voice AI,” Friedman said. “Consequently, what ends up happening is — as good as your chatbot might be — the takeaway for customers is that you're prioritizing efficiency above the customer experience.”

Related Article: Why People Are Reluctant About Chatbots and What You Can Do About It

Is a Human Always Better Than a Chatbot?

No, says Scott Varho, chief evangelist at 3Pillar. He challenges this contention because "it's a bit of a false choice."

"A machine can be preferable to a human under the right circumstances," Varho added. "Has anyone ever gotten to a human who can't help them and has to transfer them only to start over or worse get hung up on and start again after a long wait? If you compare a chatbot to a human who can handle any kind of issue and picks up right away, then absolutely a human is a better experience. However, if your organization can't maintain such a high level of expensive customer support, then we're comparing the benefits of a chatbot to a suboptimal human experience.”

Not all chatbot experiences are the same, he added. Varho believes too few organizations take a disciplined approach to continually improving this interaction based on both data and qualitative feedback for fully digital, digitally augmented and fully human customer experiences.

“There is another choice here that deserves mention: designing your product or service well enough that no support is needed,” Varho said. “I don't call Amazon or Google despite how much I rely on them, and I prefer it that way. This means not using support as a crutch for gaps in your digital customer experiences.”

Transparency in Chatbot-Human Handoff

To ensure a proper human connection when incorporating chatbots, Sarah Diegnan, VP of customer experience at ChartHop, said organizations need to offer transparency right away, in the initial response to a customer opening a ticket.

“Tell them they’ve received an auto-response but guarantee that a human will get in touch with them in the next few hours,” Diegnan said. “Customers need to know that we hear them, we understand they need help, and that an actual human will assist them. That’s not an automated process. That’s an experience.”

“Experience matters from the moment a customer submits a support ticket to the end result of a company resolving their issue,” Diegnan said. “Customers don’t want a robot to answer their questions. They want a human connection.”