Analysis

Will a company without AI compete only on price? How automation changes the cost and speed of service

This article is for owners and management boards of companies that talk more and more about discounts and less and less about how they beat the competition. We show where price competition comes from, what the data says about the use of AI in companies and how to calculate the cost of handling a single order. At the end, you get a plan for the first steps and a list of situations in which AI will not help.

Author: Kacper Włodarczyk, CEO of ALGORCOMPPublished: May 13, 2026Reading time: 10 min readArtificial intelligenceFor: Mid-sized company
Will a company without AI compete only on price? How automation changes the cost and speed of service

Where price competition comes from

Price is the easiest advantage to copy. When a competitor also cuts its price, the arguments run out and both companies earn less. The winner is the one with lower costs, or the one that gives customers something more than price: speed, reliable delivery dates, good service.

In many companies, service costs are a hidden part of the price. Retyping orders, preparing quotes, answering repetitive questions and manual approvals take up a lot of people’s time. That time goes into the cost of every order, even though nobody counts it that way.

The example below shows how to calculate the cost of service from your own data. Three numbers are enough: the number of people, the cost of their work and the number of orders handled.

  • Take a hypothetical wholesaler whose order handling department has 6 people, with a full employer cost of PLN 8,400 a month per person.
  • Annual cost of the department: 6 × PLN 8,400 × 12 = PLN 604,800.
  • With 12,000 orders a year, handling one costs PLN 604,800 ÷ 12,000 = PLN 50.40.
  • If automating order entry allows the same team to handle 15,000 orders, the labour cost falls to PLN 40.32 per order. From this saving, you still need to deduct the cost of licences and implementing the automation.
  • The company can put the difference into its margin or its price, rather than having to give it away as a discount.

What the data says about AI in companies

According to Eurostat, in 2025 one in five EU companies with at least 10 employees used AI technologies. In Poland, it was roughly one in twelve. That is one of the lowest figures in the EU.

For a Polish company, this is two pieces of news. The bad news: competitors from other EU countries that you compete with in export markets are more likely to be using AI already. The good news: in the domestic market most companies do not yet use AI, so it is still possible to build an advantage.

The best-documented effect of AI concerns work with text and customer service. In a study published in the Quarterly Journal of Economics in 2025, an AI assistant increased customer service staff productivity by 15% on average. Less experienced staff gained the most, because the assistant suggested to them the approaches used by their best colleagues.

Will a company without AI compete only on price? How automation changes the cost and speed of service

Three ways in which AI and automation lower costs

AI does not lower costs simply by being implemented. It works when it takes over a specific part of the work in a process that is repeated many times a week. In practice, there are three mechanisms, described below.

The third is the least visible. A company without automation has to hire every time sales grow, while a company with automation can grow with the same team. This difference only shows up in a period of growth, but that is when it is greatest.

  • Less manual work. AI reads orders from emails and prepares draft quotes and replies to common questions. Employees check and approve instead of writing from scratch.
  • Fewer errors. A quote built from a single price list and automatic data checks reduce mistakes, which cost twice: once when they are made and again when they are corrected.
  • Growth without proportional hiring. The same team handles more orders, and you hire new people for work that needs a human.

Where speed of response decides the sale

A customer who sends an enquiry to several companies often chooses the one that replies first and with specifics. In a study described in the Harvard Business Review, companies that called back within an hour were almost seven times more likely to reach a decision-maker than those that did so an hour later.

The study concerned enquiries from online forms in the US, so do not apply the figure directly to your market. But the direction is clear: every hour of delay reduces the chance of a sale. Below are the situations in which speed usually counts most.

  • Requests for quotation in wholesale and distribution, where customers compare several quotes on the same day.
  • Business services, where customers ask about lead times and a preliminary price before starting talks.
  • Accounting firms and law firms, where clients expect quick answers to common questions.
  • After-sales service: order status, invoices, corrections, complaints.
A comparison of the cost of handling an order in two companies with the same team

A company that competes only on price often does not have a product that is too expensive. It has a way of selling and serving it that is too expensive.

How to tell that your company is slipping into price competition

Competing on price is rarely a decision. It is usually a process that happens slowly, quarter by quarter. The company feels that “the market is getting tougher”, when in fact it is the competitors that have changed.

If you recognise two or more of the signs below, look at your service costs and response times before you approve another discount.

  • Margins are falling even though sales are rising. You are selling more, but more cheaply, to match competitors.
  • Enquiries from new customers often end in silence, because someone else replied faster.
  • Staff turnover is high in customer service and administration, because the work is repetitive and frustrating.
  • At its meetings, the management board talks mainly about discounts and prices, and rarely about the quality of service and products.

Is a company of a few dozen people too small for AI?

In a smaller company, every working day saved matters more, because the work is spread across fewer people. Many AI tools need neither your own servers nor data specialists, and work within the software the company already uses.

For example, Microsoft 365 Copilot Business is designed for organisations with up to 300 users and, according to Microsoft’s price list, costs USD 21 per user per month with annual billing (as of October 2026). Until 31 December 2026, a promotional price of USD 18 applies. However, it is worth buying licences first for the people who work most with documents and email, not for the whole company.

Small scale has a downside too. A company of 30 people rarely has someone who can run a project alongside their own job. That is why a narrow first step and clearly assigned responsibility are especially important here.

Where to start if your company is facing a decision

Do not start by choosing a tool. Start by establishing where the company loses the most time and money. The steps below take you from that diagnosis to the first measurable result.

The plan assumes a decision after each step. If the pilot does not meet the measure you set in advance, you end it and lose the cost of one stage, not of the whole programme.

  • Talk to department managers and list the processes in which people spend the most time retyping, copying, searching and waiting.
  • Measure the current situation for the three most promising processes: number of cases, handling time, number of errors, time to respond to the customer.
  • Choose one process with the best ratio of impact to difficulty – often requests for quotation or retyping orders.
  • Run a pilot in one team, with a measure of success written down before the start and a person responsible for the result.
  • After the pilot: compare the results with the baseline and decide whether to extend, improve or end it.

How to talk to your team about AI

Employees who hear about AI without an explanation usually think of redundancies. Rumours can halt a rollout more effectively than technical problems. That is why the management board should say clearly why the company is doing this, and back it up with its decisions.

The most important message concerns the goal: to relieve people of work nobody likes and to serve more customers without overtime. The second concerns the team’s involvement. The people who handle the process manually today know the most about it and should help shape the change.

While you are at it, look after your employees’ knowledge of AI. Since 2 February 2025, the AI Act (Article 4) has required every company that uses AI in its business to take steps to build that knowledge.

When AI will not improve your company’s position

AI is not the answer to every margin problem. If the cause is expensive raw materials, a weak product or a poor location, office automation will not change that.

The same applies in markets where customers buy purely on the lowest price and service does not matter to them. There, AI can lower costs, but it will not build an advantage other than price. An honest diagnosis before the decision saves money and avoids disappointment.

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FAQ

AI and price competition – frequently asked questions

Questions business owners ask before deciding on their first AI project.

Will AI mean I employ fewer people?
Usually it is not about redundancies, but about hiring more slowly. The typical effect is handling more cases with the same team and moving people to work that requires customer contact or judgement.
Will customers notice that AI is answering them?
They should. From 2 August 2026, the AI Act (Article 50) requires an AI system that talks to people to tell them they are not talking to a human. So many companies start with AI that prepares a draft reply, which an employee then sends.
Wouldn’t it be better to wait until the technology matures?
The tools will keep changing, but knowledge of your own processes and data stays in the company. A sensible compromise is a small pilot now and a decision on further steps based on its results.
How can I check whether competitors are already using AI?
The simplest way is to send the same enquiry to several competitors and measure who replies, when and how specifically. The test will also show how you compare when a customer is weighing up several companies.
How much does the first step cost?
Only tool licences have a list price. The cost of implementation work depends on the process, the number of systems to be connected and the state of the data. We describe what it consists of and how to calculate the return in a separate article on the cost of implementing AI.

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About the author

Kacper Włodarczyk — CEO of ALGORCOMP

Kacper Włodarczyk

CEO of ALGORCOMP

Kacper specializes in implementing Microsoft 365 Copilot, Copilot Studio, Power Platform (Power Automate, Power Apps, SharePoint) and AI agents for mid-sized B2B companies in Poland. He leads dozens of projects covering AI strategy, Power Platform governance, document workflow automation and sales processes. In his writing he focuses on the practical side of AI adoption in organizations — from the first proof of concept to company-wide rollout — with particular attention to data security, compliance (GDPR, NIS2, the AI Act) and return on investment.

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