Escalation Rules: Teaching AI When to Ask for Help

The Escalation Importance 

AI effectiveness depends on knowing when to escalate to humans. Too few escalations create quality problems. Too many negate efficiency benefits. Understanding escalation rule design balances automation with judgment. 

Reality: Well-designed escalation (20-30% rate) maintains quality while achieving 60-70% automation. 

Escalation Rule Categories 

Category 1: Complexity Thresholds 

Principle: AI handles routine, humans handle complex 

Example rules: 

For AR collections: 

IF dispute amount > $5,000 

  THEN escalate to AR manager 

IF customer requests payment plan > 3 months 

  THEN escalate to controller 

IF customer mentions bankruptcy or legal action 

  THEN escalate immediately to AR manager 

IF customer requests credit beyond standard terms 

  THEN escalate to controller for approval 

Why these thresholds: 

• Financial materiality ($5K significant for mid-market) 

• Policy limits (payment plans >3 months require approval) 

• Legal implications (bankruptcy requires expert handling) 

• Authority limits (credit terms controller decision) 

For vendor bills: 

IF 3-way match variance > 15% 

  THEN escalate to AP manager for investigation 

IF vendor disputes resolution approach 

  THEN escalate to AP manager 

IF requires PO amendment 

  THEN escalate to purchasing for approval 

IF involves contract interpretation 

  THEN escalate to AP manager or purchasing 

Category 2: Emotional Indicators 

Principle: Humans handle emotional situations better 

Detection signals: 

Voice indicators: 

• Raised voice detection 

• Interrupting frequently 

• Speaking very quickly 

• Long pauses (distress) 

• Crying or emotional distress 

Text indicators: 

• ALL CAPS usage 

• Multiple exclamation marks 

• Angry language ("this is ridiculous," "unacceptable") 

• Threats ("I'll never work with you again") 

• Frustration keywords 

Example rules: 

IF voice analysis detects raised voice 

  OR customer interrupts >3 times in conversation 

  THEN transfer to human immediately 

IF email contains "unacceptable" or "ridiculous" or "disgusted" 

  THEN escalate for personal response 

IF customer explicitly requests human 

  THEN transfer immediately, no questions 

Why immediate: Emotional situations require empathy. AI cannot de-escalate effectively. Human intervention prevents relationship damage. 

Category 3: VIP Account Protection 

Principle: Strategic accounts deserve human attention 

VIP identification: 

• Annual revenue threshold (e.g., >$100K) 

• Strategic partnership designation 

• Executive relationship ownership 

• Accounts CEO/president identifies 

• Long-term customers (10+ years) 

Example rules: 

IF account flagged as VIP in ERP 

  THEN never contact automatically, always escalate 

IF account annual revenue > $100,000 

  THEN escalate for human handling 

IF account has executive relationship owner 

  THEN route to relationship owner, not AI 

IF account is on strategic partner list 

  THEN escalate to AR manager 

Fail-safe: Dual verification (ERP flag + manual list review) prevents VIP contact errors 

Category 4: Approval Authority Limits 

Principle: AI operates within defined authority 

Example rules: 

For collections: 

IF payment plan requested 

  AND total owed < $25,000 

  AND plan duration <= 3 months 

  THEN AI can offer plan 

  ELSE escalate to controller 

IF customer requests discount 

  THEN escalate (AI cannot approve discounts) 

IF customer proposes settlement for less than full amount 

  THEN escalate to controller 

For vendor bills: 

IF bill variance < $500 and < 10% 

  THEN AI can approve for payment 

  ELSE escalate to AP manager 

IF vendor requests early payment discount 

  THEN escalate to AP manager for approval 

Why clear limits: Prevents AI from making commitments beyond authority. Protects company financially. Maintains control. 

Category 5: Technical Failures 

Principle: AI recognizes its own limitations 

Example rules: 

IF cannot retrieve customer data from ERP 

  THEN escalate with error details 

IF voice quality too poor to understand customer 

  THEN transfer to human 

IF customer provides information AI cannot parse 

  THEN escalate for interpretation 

IF conversation loops >3 times without progress 

  THEN recognize limitation, transfer to human 

Category 6: Customer Requests 

Principle: Customer always has right to human 

Example rules: 

IF customer says "let me talk to a person" 

  OR "transfer me to someone" 

  OR "I want to speak to your manager" 

  THEN immediate transfer with full context 

IF customer asks "are you a robot?" 

  OR "is this AI?" 

  THEN acknowledge AI, offer human transfer 

Why honor immediately: Respect customer preference. Forcing AI when human requested creates frustration. Better to transfer gracefully than persist. 

Escalation Timing 

Immediate Escalation (Real-Time Transfer) 

Triggers: 

• Customer requests human 

• Emotional distress detected 

• VIP account contacted by error 

• Technical failure prevents continuation 

Process: 

• AI immediately stops interaction 

• Transfers to available human (if phone) 

• Creates urgent task (if email/async) 

• Provides complete context to human 

Timeline: Seconds (phone) or within 2 hours (async) 

Scheduled Escalation (Next Business Day) 

Triggers: 

• Complexity exceeds AI capability 

• Approval required beyond AI authority 

• Investigation needed before response 

• Customer commitment needs verification 

Process: 

• AI documents complete interaction 

• Creates task assigned to appropriate person 

• Includes AI's assessment and recommendation 

• Sets priority level 

Timeline: Next business day typically 

Follow-Up Escalation (After AI Attempt) 

Triggers: 

• No customer response after 2-3 attempts 

• Payment commitment not kept 

• Dispute unresolved after initial contact 

• Pattern of non-responsiveness 

Process: 

• AI attempts resolution 

• Documents attempts and responses 

• Escalates when pattern suggests human needed 

• Provides summary of all attempts 

Timeline: 7-14 days after initial contact 

Escalation Rate Targets 

Optimal Range: 20-30% 

Why 20-30%: 

• Below 20%: AI likely handling situations it shouldn't (quality risk) 

• Above 30%: AI too conservative (efficiency loss) 

• 20-30%: Appropriate balance of automation and judgment 

Breakdown by Trigger 

Typical distribution: 

• Complexity/approval needed: 10-15% 

• VIP accounts: 3-5% 

• Customer request for human: 3-5% 

• Emotional indicators: 2-4% 

• Technical issues: 1-2% 

• Investigation required: 3-5% 

Total: 22-36% (within optimal range) 

Too High Escalation Rate 

If escalation rate >35%: 

Likely causes: 

• Escalation rules too conservative 

• Complexity thresholds too low 

• VIP list too broad 

• Technical issues requiring fixes 

Actions: 

• Review escalation reasons 

• Adjust thresholds appropriately 

• Refine VIP criteria 

• Fix technical issues 

Too Low Escalation Rate 

If escalation rate <15%: 

Likely causes: 

• AI handling situations beyond capability 

• Missing escalation triggers 

• VIP protection insufficient 

Actions: 

• Sample AI interactions for quality 

• Add missing escalation criteria 

• Review VIP account handling 

• Increase complexity escalation threshold 

Context Transfer 

What Human Receives 

Complete conversation history: 

• All messages exchanged 

• Customer responses 

• AI actions taken 

• Data accessed from ERP 

AI assessment: 

• Why escalation triggered 

• AI's understanding of situation 

• Recommended next action 

• Relevant customer history 

Account context: 

• Customer details 

• Current balance and aging 

• Payment history 

• Previous exceptions 

Escalation Documentation 

Example escalation: 

ESCALATION: Customer dispute requires investigation 

Customer: ABC Manufacturing 

Balance: $18,500 

Issue: Claims invoice 12345 doesn't match delivered quantity 

AI Conversation Summary: 

- Called customer 12/15, spoke to AP Manager Jane Smith 

- Customer states received 80 units, invoiced for 100 

- Requested proof of delivery 

- AI identified this requires shipping department verification 

AI Recommendation: 

- Coordinate with shipping to verify delivery 

- If 80 units confirmed, credit for 20 units ($3,700) 

- If 100 units confirmed, provide POD to customer 

Escalated to: AR Manager 

Priority: Standard 

Due: Next business day 

The Reality 

Escalation rules define when AI transfers to humans across 6 categories:  

• Complexity thresholds (dispute >$5K, payment plan >3 months, bankruptcy mentions);  

• Emotional indicators (raised voice, angry language, frustration);  

• VIP account protection (revenue >$100K, strategic partners); 

• Approval authority limits (AI operates within defined limits); 

• Technical failures (data access, voice quality, parsing issues); 

• Customer requests (always honored immediately). 

Optimal escalation rate: 20-30%.  

• Below 20% quality risk.  

• Above 30% efficiency loss.  

Typical distribution:  

• Complexity 10-15% 

• VIP 3-5% 

• Customer request 3-5% 

• Emotional 2-4% 

• Technical 1-2%  

• Investigation 3-5% 

Escalation timing:  

• Immediate (customer request, emotional distress, VIP error, technical failure); 

• Scheduled next business day (complexity, approval needed);  

• Follow-up 7-14 days (no response pattern). 

Context transfer:  

• Complete conversation history; 

• AI assessment; 

• Account context 

Recommended action. Human receives full picture to continue seamlessly. 

Conservative escalation (20-30% rate) maintains quality while achieving 60-70% automation. Better to escalate when uncertain than handle incorrectly. 

About the Author: This content is published by ERP AI Agent. 

Published: January 2025 | Reading Time: 7 minutes