Businesses Embrace AI, But Consumers Push Back

Businesses are betting big on AI, but consumers aren't so sure. Many companies are eagerly adopting AI, especially in customer service, but a recent Gartner survey shows that 64% of customers wish they wouldn’t. Even more concerning for these companies, 53% of customers said they’d consider switching to a competitor if AI doesn’t meet their expectations.

The truth is, people aren’t thrilled with the idea of AI chatbots handling their questions, especially when they don’t get the nuance of unique situations. It often feels like businesses are hiding behind automated systems, keeping customers from talking to a real person. This tension has been growing for years, so where do we go from here?

Key Takeaways

• Despite AI’s involvement, customer service satisfaction is at an all-time low.
• 45% of consumers would rather ignore an issue than deal with AI-based customer service, and 53% would switch to a competitor if AI falls short.
• Acquiring new customers costs up to five times more than retaining existing ones, yet few companies are truly customer-focused.

The Double-Edged Sword of Progress

Improving customer experience in today’s digital world requires a careful mix of AI and human touch. Often, AI is promised to handle simple queries and pass on more complex issues to human agents. But this ideal scenario rarely plays out for consumers.

A National Customer Rage Survey found that 74% of Americans had problems with products or services in the last year. This suggests that while technology was supposed to help, it has actually doubled the problems businesses face since 1976.

Forrester’s Customer Experience Index also showed a sharp decline in U.S. consumer satisfaction with customer experience, dropping for a third year in a row. In 2024, 39% of brands saw significant declines, compared to 17% in 2023. Other reports confirm that customers feel customer service is in freefall.

Research by Cavell found that nearly half of respondents believe customer service has worsened over the past three years. So much so, that 45% of them admitted they’d rather ignore an issue than deal with the hassle of customer service.

The Problem with Review Requests

Automated requests for feedback are becoming more intrusive, whether from shops, hotels, or even your dentist. Amazon’s Alexa might interrupt your movie night to ask you to rate your recent purchase of batteries or razor blade refills. Meanwhile, your inbox fills up with requests from do-not-reply email addresses asking for reviews.

It often feels like these requests don’t really focus on improving customer experience. Instead, they seem aimed at pressuring frontline employees, with little real change happening as a result. Given that acquiring a new customer costs five times more than keeping an existing one, this is a big missed opportunity.

Forrester reports that companies obsessed with their customers see 41% faster revenue growth, 49% faster profit growth, and 51% better customer retention than those that aren’t. Despite this, only 3% of companies are considered truly customer-obsessed.

The Customer Isn’t Always Right

Anyone who’s worked in customer service knows customers can be difficult. Entitlement, rudeness, and impatience are just a few traits service workers deal with daily. The British Retail Consortium’s crime survey shows abuse and threats against UK shop workers have risen by over 50%, with more than 1,300 incidents daily.

Technology should bring people together, but it’s unclear if AI can fix the problems caused by previous tech solutions. However, AI isn’t all bad. Chatbots are great at handling routine tasks like providing basic information, tracking orders, and giving updates, which can improve response times and customer satisfaction.

When used thoughtfully, AI can free up human workers to focus on more complex tasks, enhancing the overall customer experience. Technology can also analyze customer data to offer personalized recommendations, improving engagement and loyalty.

The Takeaway

Neither AI nor human agents can supercharge customer service alone. The magic happens when they work together, ensuring smooth transitions and more personalized customer experiences. And remember, it’s wise to be kind to the people who help you—whether they’re human or AI. You never know when you might need them again.