Technology & Innovation

How small businesses can harness agentic AI without the big costs

Discover how AI agents can transform your customer service, cut costs, and level the playing field without much technical expertise or massive investment.

Aug 12, 20258 min read Share

You’ve probably encountered countless chatbots that frustrated you more than they helped.

The ones that couldn’t understand your question, trapped you in endless loops, or forced you to repeat “speak to a human” until you gave up entirely.

But what if there was a different kind of AI that actually works?

One that could handle your customer inquiries with empathy, solve problems autonomously, and do it all at a fraction of the cost of traditional customer service?

This technology exists today, and it’s called agentic artificial intelligence (AI).

Unlike the basic chatbots you might know, AI agents can make decisions, take actions, and provide genuine help to your customers.

Here’s what we’ll cover:

Understanding agentic AI: Beyond basic chatbots

The difference between traditional chatbots and AI agents comes down to capability and autonomy.

“If you surveyed an audience and asked, ‘Do you like chatbots?’ my guess is not a single person would raise their hand,” explains Bret Taylor, co-founder and CEO of Sierra, an AI customer service company.

“But if you ask the same audience, ‘Do you like ChatGPT?’ almost everyone would raise their hand. And what’s the difference? Well, one works.”

Traditional chatbots follow pre-programmed scripts and decision trees. They can only respond to specific keywords or phrases they’ve been programmed to recognise.

When customers ask something outside those parameters, the system breaks down.

AI agents, on the other hand, understand context, can engage in natural conversation, and most importantly, have agency.

“The word agent does come from the word agency,” says Taylor. “Fundamentally, you’re affording the software some ability to make decisions.”

This means an AI agent could:

• Understand that a customer is frustrated and adjust its tone accordingly
• Access your inventory system to check product availability
• Process a return request according to your policies
• Schedule appointments in your calendar system
• Escalate complex issues to human staff when necessary

Why AI agents are now accessible to small businesses

For years, advanced AI seemed reserved for tech giants with unlimited budgets. That’s changing rapidly.

“AI is democratising access to expertise—medical expertise, legal expertise, technology expertise,” Taylor notes. “I think it’s a very democratising force for small businesses in particular.”

The costs that once made sophisticated customer service prohibitive are plummeting.

Taylor points out that a typical customer service phone call costs businesses between $5 and even $25, depending on complexity.

AI agents can handle similar interactions for pennies.

“We’re bringing down the cost by orders of magnitude,” he explains. “It means that even businesses that are relatively low margin will be able to provide really high quality customer experiences.”

This cost reduction transforms customer service from a necessary expense into a competitive advantage.

You can now afford to offer:

• 24/7 customer support without night shift wages
• Multilingual assistance without hiring speakers of different languages
• Instant responses without customers waiting on hold
• Consistent service quality regardless of staff turnover or training levels

Real-world applications for your business

AI agents go beyond the realm of theory and are already solving real problems for businesses today.

Here are practical applications you can implement:

Customer service and support

Instead of customers waiting on hold or sending emails into the void, an AI agent can instantly help with common queries:

• Order status and tracking information
• Product specifications and compatibility questions
• Basic troubleshooting for your products or services
• Account management tasks like password resets

Appointment scheduling

For service-based businesses, AI agents can handle booking complexity that traditional online calendars miss:

• Understanding customer preferences and constraints
• Suggesting optimal appointment times
• Rescheduling when conflicts arise
• Sending automated reminders and follow-ups

Sales qualification

AI agents can engage with potential customers, understand their needs, and determine if they’re a good fit before passing them to your sales team:

• Gathering initial requirements and budget information
• Explaining your services and pricing structure
• Identifying the decision-maker and timeline
• Scheduling qualified prospects for sales calls

Basic contract and document review

Taylor shares an example from his own family: “I have a lot of family members who run small businesses, and one of them was saying they had a contract from a supplier, and they weren’t sure whether they wanted to pay for an attorney to review it, so they put it into ChatGPT and got some advice on it.”

While you shouldn’t rely on AI for complex legal decisions, agents can help with:

• Identifying unusual clauses in standard agreements
• Explaining technical terms in plain language
• Flagging potential red flags for human review
• Comparing contract terms against your standard policies

Getting started without breaking the bank

The key to successful AI implementation is starting small and focusing on specific problems rather than trying to revolutionise everything at once.

“Don’t wait for the technology to be perfect [because] it may never be perfect,” Taylor advises. “Instead, narrow the domain that you’re working on so you can take these intractable problems and make them solvable.”

Step 1: Identify your biggest pain points

Choose one specific area where customer inquiries consume significant time:

• Which questions do you answer repeatedly?
• What tasks could be handled without human expertise?
• Where do customers experience the most friction?

Step 2: Start with existing tools

Many popular business platforms now include AI agent capabilities:

• Customer service platforms like Zendesk and Intercom offer AI-powered features
• Website builders include chatbot functionality that’s becoming increasingly sophisticated
• Accounting software like Sage includes AI features for invoice processing and expense categorisation

Step 3: Define clear boundaries

Successful AI agents work within well-defined parameters.

Establish:

• What decisions the agent can make autonomously
• When it should escalate to human staff
• Your company policies it must follow
• Sensitive topics it should avoid

Step 4: Test extensively before going live

Start with internal testing, then gradually expand:

• Have your team interact with the agent to identify issues
• Run parallel systems initially, with humans reviewing AI responses
• Monitor customer satisfaction scores closely
• Adjust the agent’s responses based on real feedback

Managing risks and setting boundaries

With autonomy comes risk.

AI agents can make mistakes, and those mistakes can affect your customers and reputation.

“There have been some infamous cases,” Taylor acknowledges. “There was an airline where someone said they had a death in the family, and the chatbot hallucinated a bereavement policy and just said, ‘Your airfare is on us’.”

To avoid such problems:

Set strict operational limits

• Define exactly what actions the agent can take without human approval
• Create approval workflows for high-value transactions
• Establish clear escalation triggers for complex situations
• Regular audit agent decisions and outcomes

Maintain brand consistency

Your AI agent represents your business, so ensure it:

• Follows your company’s tone of voice and values
• Understands and enforces your policies accurately
• Knows when to admit limitations and seek human help
• Maintains professional standards in all interactions

Plan for continuous improvement

AI agents learn and improve over time, but they need guidance:

• Review customer feedback regularly
• Update the agent’s knowledge base as your business evolves
• Train it on new products, services, or policy changes
• Monitor for drift in behaviour or decision-making

The future of AI in small business operations

Taylor believes we’re at a pivotal moment similar to the early days of websites. “It’s 2025 and we’re talking about creating your first AI agent,” he says. “We’ll look back in 10 years and laugh at how simplistic the AI agents of today were.”

He envisions three types of agents that businesses will use:

• Personal agents will help you manage your own work, e.g. triaging emails, planning schedules, and handling administrative tasks.
• Specialist agents will perform specific professional functions, e.g. reviewing contracts, analysing financial reports, or managing inventory.
• Brand agents will become as central to your business as your website, handling the majority of customer interactions across all touchpoints.

“I think most companies’ AI agents will actually be as significant as their website or their mobile app in terms of the percentage of interactions they have with their customers,” Taylor predicts.

Making the transition work for your team

The shift to AI-powered operations affects your staff, and managing this transition thoughtfully is crucial for success.

“I like to think of it as a culture of reskilling,” Taylor explains, comparing the current moment to when spreadsheet software transformed accounting. “We are all accountants, and we’re right on the eve of Microsoft Excel being invented. If you’re still using a slide rule and your HP calculator, you’re going to have a problem, but anyone can learn how to use these technologies.”

Rather than replacing your team, AI agents can enhance their capabilities:

• Customer service staff can focus on complex problems while agents handle routine queries
• Sales teams can spend time with qualified prospects instead of initial screening calls
• Administrative staff can tackle strategic projects instead of repetitive data entry

The key is involving your team in the implementation process and providing training on how to work alongside AI tools effectively.

Taking the first step

The technology exists today to transform how you serve customers and operate your business.

The question to ask is whether you’ll be an early adopter who gains competitive advantage or a late adopter playing catch-up.

“AI is democratising access to expertise,” Taylor observes. “I’m really excited, particularly for sole proprietorships and truly small businesses.”

The businesses that begin experimenting with AI agents today will build the expertise and systems needed to thrive as this technology becomes ubiquitous.

Those who wait for perfect solutions may find themselves struggling to catch up in a world where instant, intelligent customer service is the baseline expectation.

So start by identifying one customer service pain point that consumes significant time.

Research existing tools that could address this specific problem.

Test thoroughly, set clear boundaries, and gradually expand the agent’s capabilities as you gain confidence.

Fact is your customers are already experiencing AI agents elsewhere.

The question is whether they’ll experience your version of helpful, empathetic, and efficient service or be forced to look elsewhere for businesses that have embraced these capabilities instead.