Business Bets Big on AI — Consumers Bet Against It

Almost every brand is desperately trying to participate in the AI narrative — and yet, ironically, a recent Gartner survey revealed that 64% of customers would prefer if brands didn’t adopt AI in customer service.

More worryingly, for businesses that are going all in on AI, 53% of customers feel so strongly that they would consider switching to a competitor.

It seems nobody wants AI chatbots conversationally popping out information from a website’s FAQs without failing to understand the nuance of a unique query.

It can feel that many businesses hide behind automated “help” systems or AI chatbots to prevent customers from speaking to a human. These tensions have been building for many years. So, where do we go from here?

Table of Contents Table of Contents

1. Key Takeaways
2. The Paradox of Progress
3. Needy Customer Review Requests
4. The Customer is Not Always Right
5. The Bottom Line
6. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. The Paradox of Progress
3. Needy Customer Review Requests
Show Full Guide
4. The Customer is Not Always Right
5. The Bottom Line
6. References

The Paradox of Progress

Improving customer experience in a digital age requires a delicate balance of AI and human interaction. A solution provider’s sales pitch typically begins with the promise that AI will manage customer queries and seamlessly pass them on to a human agent if it cannot provide a solution. But this vision is seldom delivered to consumers.

According to the National Customer Rage Survey, 74% of Americans have experienced product or service issues over the past year. These stats suggest that the introduction of technology has led businesses to cause twice as many problems since 1976.

Forrester’s annual Customer Experience Index also revealed that U.S. consumer perceptions of CX quality have dropped for an unprecedented third year, the lowest since its inception in 2016.

The drop in satisfaction was the steepest yet in 2024 — 39% of brands significantly experiencing a decline, compared to 17% in 2023. Unfortunately, many other reports highlight how customer service is in freefall in the eyes of its customers.

Recent research from Cavell revealed that almost half of respondents feel customer service has significantly worsened over the past three years — so bad that 45% of respondents admitted that they had ignored an issue with a product or service rather than facing the hassle of interacting with customer service.

Needy Customer Review Requests

Automated requests for feedback and reviews from shops, hotels, and even dentists are also beginning to feel intrusive. Even Amazon’s Alexa can drop into your living room uninvited on movie night to ask you to leave a rating for a pack of batteries, razor blade refills and a printer cable.

Your chances of reaching inbox zero have also taken a hit after your inbox fills with needy requests from a do-not-reply e-mail address to rate your experience. A new travel insurance policy is a great example that will immediately ask for a review before a trip, but things can take a dark turn when you need to speak with a human about a claim.

Rather than focusing on the customer experience, there is a suspicion that the data will merely result in a front-line employee being taken into a small room and instructed to do better or face a warning. Ultimately, nothing changes.

Considering that acquiring a new customer can cost five times more than retaining an existing one, Forrester reported that customer-obsessed organizations experience 41% faster revenue growth, 49% faster profit growth, and 51% improved customer retention compared with non-customer-obsessed organizations.

Despite the clear path forward on what brands need to do to wow their customers and improve retention rates, only 3% of companies are viewed as customer-obsessed or put their customers’ needs first.

The Customer is Not Always Right

Anyone who has ever worked in customer service knows that customers are far from perfect. Entitlement, rudeness, and anger are just a few characteristics service workers are expected to deal with on every shift. Impatience and a lack of empathy towards the person trying to help often result in a barrage of complaints or threats of leaving a negative review online.

According to the British Retail Consortium’s (BRC) crime survey, abuse and threats of violence against shop workers in the UK have increased by more than 50% to more than 1,300 incidents a day. The theft cost has also doubled by £1.8 billion, with over 45,000 daily incidents.

Technology works best when it brings people together, and there is an argument that we need this more than ever. But the jury is out on whether artificial intelligence can fix the problems the previous solutions arguably made worse.

It’s not all bad on the AI side: Chatbots excel in handling routine tasks such as providing basic information, tracking orders, and providing updates. Collectively, this can lead to improved response times and customer satisfaction.

With a more thoughtful approach, AI can allow workers to focus on more complex or value-added tasks, such as improving the entire customer experience. Technology can also analyze customer data to offer personalized recommendations and anticipate customer needs to improve engagement and loyalty.

The Bottom Line

AI or human agents each have some of the answers, but neither can supercharge your customer service independently. The magic happens with the relationship between AI and humans to ensure a smooth handoff and more personalized customer experiences.

Finally, remember that it pays to be nice to the people you meet on the way up. They will be the same people you meet on the way down, so be nice to the customer service agents. You might want to think about being kinder to AI, just in case they flick the switch one day.