The Journey of Customer Support from Call Centers to AI – Part 1
The transformation of customer support into customer experience represents one of the most significant shifts in business strategy over the past half-century. What began as a necessary cost focused on serving customers and fixing problems has evolved into a strategic differentiator that drives revenue, retention, and competitive advantage. Let's trace the journey from traditional product support to comprehensive customer experience, examining the forces that drove this transformation and why customer experience has become critical to business success in the modern economy.
1960s: The Call Center Begins
A fundamental transformation in customer relationships emerged during the 1960s as technological innovation, economic pressure, and evolving customer expectations converged to create the modern call center.
Before this era, customer support relied heavily on in-person interactions and written correspondence. The growing popularity of the telephone, especially after the post-war boom, quickly exposed the inefficiencies of this manual approach for businesses. Telephone support remained limited in scale, with human operators manually routing calls and employees answering inquiries while managing their primary responsibilities. There was little automation, no scalable call management, and no way to meet growing demand for phone-based customer service.
That changed in 1965, when the Birmingham Press and Mail in England launched a centralized call-handling operation now widely recognized as the world's first formal call center. By combining the Strowger telephone exchange with a GEC PABX 4 system featuring automatic call distribution (ACD), the newspaper could route external calls from the public network and intelligently distribute them to available agents[1]. The setup allowed them to handle large volumes of calls efficiently, creating a centralized, automated call-handling operation. This marked the true beginning of the modern call center era.
This era established several foundational concepts that would define customer service for decades. Technology made operations scalable, standardized processes ensured repeatability, and dedicated roles brought specialization to customer service. These innovations directly enabled the reactive support patterns that would dominate the following two decades.
1970s & 1980s: Product-focused Support
The early technology era operated under what seemed like a reasonable philosophy: build good products with solid documentation, and you shouldn't need much support. Most organizations viewed support as a necessary operational expense, rather than a strategic investment, and success was defined as resolving calls efficiently and keeping costs low. Consequently, customer support in this era served a clear purpose: address product defects, answer usage questions, and "handle" the occasional frustrated customer.
The typical support journey followed a simple pattern: customers purchased products, encountered problems or difficulties, called support during business hours for troubleshooting or repair arrangements, then ended the interaction once the problem was resolved. Early on, companies typically ran phone-based support operations during standard business hours, often with limited staffing and extended wait times. The widespread adoption of toll-free 1-800 numbers during this era[2] removed the barrier of long-distance charges, dramatically increasing call volumes and pushing companies to centralize operations while seeking more efficient call handling solutions. In 1983, AT&T launched the first 24/7 customer service hotline, establishing a new expectation for always-available support[3].
Performance during this era was measured primarily by call resolution rates and cost per interaction, with little consideration for long-term customer satisfaction or relationship building. Support agents had minimal information about customers beyond the immediate problem, and each call was treated as a standalone event rather than part of an ongoing relationship with the customer. This approach reflected the dominant business strategy of the era: growth through acquisition. Marketing budgets prioritized advertising, sales teams chased new accounts, and the customer journey largely ended at the point of sale. Success was measured by how quickly issues were closed, not by whether customers stayed or returned.
1990s: The Service Quality Movement
“Zero defections is the path to maximum profitability.”— Fred Reichheld
A significant shift emerged in the 1990s as companies increasingly adopted the premise that retaining customers cost less than acquiring new ones. This understanding gained momentum through academic pioneers like Leonard Berry and Frederick Reichheld, who introduced relationship marketing concepts. Frederick Reichheld's influential 1990 Harvard Business Review article and 1996 book The Loyalty Effect demonstrated that increasing customer retention by just 5% could boost profits by 25–95%, further promoting retention over acquisition. Through quantifying the positive impact of loyalty, this research reframed the role of customer service from a back-office cost to a front-line revenue protection function. Armed with this compelling business case, companies pivoted to invest more in service quality.
To achieve these service quality goals, companies increasingly invested in training programs focused on customer service skills and established quality assurance programs with call monitoring. Internal knowledge bases and troubleshooting procedures were standardized to help agents provide more consistent support[4]. Post-support customer satisfaction (CSAT) surveys, delivered initially by representatives and later by automated phone systems, became a common practice[5]. This enabled companies to systematically measure service quality immediately after interactions. First Call Resolution (FCR) gained traction as a standard KPI during this period as businesses sought to reduce repeat calls for the same issue[6].
The focus on service quality and its value to businesses helped establish customer service as a legitimate business profession. While formal Customer Service Week was championed by several unions and organizations throughout the 1980s, the U.S. Congress established the first official National Customer Service Week in October 1992, followed by other countries. Supporting this trend, organizations like the International Customer Management Institute (ICMI) began publishing best practices and benchmarking studies for FCR and other KPIs.
The emergence of basic company websites in the mid-to-late 1990s introduced the first digital touchpoints for customer support. Companies began listing email addresses on websites and in product manuals, initially handled informally by general staff. By the late 1990s, companies like Dell and Microsoft pioneered more systematic email support through centralized queues, laying the groundwork for the digital transformation that would define the following decade.
Despite these improvements, support remained largely reactive and transactional. As customer support was still considered a cost center, the focus remained on improving the efficiency of problem resolution in order to reduce support costs.
Continued in part 2
Endnotes
While the core principles of automatic call distribution emerged in the mid-20th century, early ACD systems, like those used by Birmingham Press and Mail, marked the beginning of their practical, large-scale application in customer service environments.
Toll-free service was introduced by AT&T in 1967 but business adoption for customer support became widespread in the 1980s as costs decreased.
Some critical services or emergency lines may have offered round-the-clock availability earlier, but AT&T's launch of a widely accessible 24/7 customer service hotline established a new commercial standard for continuous support.
Early forms of internal documentation and knowledge sharing existed prior to the 1990s, but the rise of digital databases and the explicit goal of standardization for customer service efficiency marked a significant shift in this decade.
Interactive Voice Response (IVR) technology saw early development in the 1970s, but its widespread adoption by businesses for customer service, particularly for automated surveys and basic routing, accelerated significantly in the 1990s due to falling costs and improved capabilities.
While the concept of resolving issues quickly has always been important, FCR emerged as a formalized metric and strategic objective for customer service operations primarily in the 1990s, driven by service quality initiatives.
