Digital missteps continue to short-circuit corporate efforts to make artificial intelligence smart enough for consumers to become more satisfied with their customer experience (CX).
However, the disconnect with customers makes CRM software with AI features more expensive for organizations to develop and maintain. While companies invest in AI, consumers still crave a human touch.
Consumers expect companies to deliver a consistently smooth experience, whether shopping on a website, calling customer support, or using a chatbot. The hype surrounding AI-powered CRM implies AI is becoming a bigger part of daily life for company reps and consumers.
But recent research by Qualtrics XM Institute (formerly known as Tempkin Group) suggests the hype is misguided. Customers are putting a higher value on human connection and rewarding brands that deliver exceptional digital support with their dollars and lasting loyalty.
Key findings in Qualtrics’ 2024 Consumer Experience Trends Report suggest that consumer expectations are rising. The study surveyed over 28,000 consumers in 26 countries about their expectations heading into next year and revealed that 60% of customer experience leaders expect AI will give them a competitive advantage. However, less than half of consumers are comfortable with a brand using AI.
“The challenge for brands in 2024 will be identifying the tasks AI does and doesn’t do well and aligning those capabilities with consumer preferences,” said Sid Banerjee, chief XM strategy officer at Qualtrics XM Institute.
AI can also make frontline employees’ lives easier by quickly analyzing different data and situations and surfacing insights that can drive improvements to the customer experience, Banerjee offered. These can reduce effort, make the shopping experience more efficient, and highlight interactions that drive negative emotions.
In some cases, AI can provide real-time recommendations, allowing staff to create better customer journeys and coaching frontline staff that helps them connect more purposefully and effectively when customers have a human touchpoint with a company.
Nonetheless, researchers say digital support is the weak link in the customer journey. As companies invest in digital support capabilities, consumers are 22% less satisfied with their customer support experience when making an online purchase, as opposed to in-person.
Customer Relationship Impediments
The primary goal of making meaningful human connections in retail settings is getting more complex. According to Banerjee, that occurs for four reasons:
- The ongoing decline of brick-and-mortar stores has reduced traditional retail person-to-person connections and lessened the number of repeat interactions between retail employees and customers that create relationships, customer understanding, and customer needs.
- Customer journeys have evolved away from single touchpoint journeys, like walking into a store, finding an item, and buying it. That is now replaced with more sophisticated, omnichannel, and multiple touchpoint journeys like shopping online, interacting via digital chat or telephone with an agent, and picking up an item in a retail store.
- Digital-first retailers are leaning toward fewer human interactions. E-commerce-based ordering, configuration, shopping, and supporting touchpoints are increasingly highly automated.
- Chatbots, interactive voice assistants, and other automated platforms are progressively taking over support functions such as telephone support and conversational chats between agents and customers.
“Our research found that 73% of consumers are comfortable using a brand’s automated system for simple, transactional activities like checking an order status. However, they are averse to using it when the stakes are high — for example, only 19% of consumers would prefer to engage with a chatbot or self-service channel for advice on a medical issue,” Banerjee said.
Failed AI Expectations
Despite all of the hype around AI, consumers aren’t sure they’re ready for customer service delivered by AI directly, noted Qualtrics’ leaders.
The top three concerns among consumers interacting with a company using AI include:
- Lack of human connection (48%)
- Poor quality of interactions (45%)
- Loss of jobs for employees (45%).
CX professionals believe AI will give them a competitive advantage by augmenting how they do their work. With the correct data, AI has the potential to deliver service that closely resembles the human experience.
“Organizations are understandably excited about the potential of AI, but as they incorporate it into their business, they must take customers’ concerns into account,” said Qualtrics XM Institute Principal XM Catalyst Moira Dorsey.
If done well, AI-powered services will make human teams more effective. Dorsey added that it can give customers a fast, effective way to get what they need through self-service and automated tasks.
Some internal problems are related to a lack of enthusiasm and lagging morale among frontline employees. These issues are a considerable barrier to organizations delivering the level of experience that creates loyal customers.
“Great customer service starts with taking care of the humans engaging with customers on the frontline,” Dorsey said. “Customer service experiences are often where people have strong emotions, so they tend to influence future purchase decisions more than any other interaction.”
CX Facing High Hurdles in 2024
Handling changing CX trends is among the most significant challenges organizations face.
Staffing shortages and inflation have added pressure on organizations to improve the situation before the customer experience suffers, observed Banerjee. Integrating new technology and improving the frontline employee experience will be a top challenge in 2024.
Money matters may be the most challenging. Delivering a better customer experience requires some degree of investment, he noted.
“Facing their own headwinds, business leaders will need to make calculated, albeit challenging decisions about where to invest, where to cut, and how to deliver a top experience to their most valuable customers,” he explained.
Organizations need to invest in connecting the dots of fragmented customer behavior caused by the channel hopping of modern customers. They need the complete picture to understand better the moments that make a customer experience wasteful and qualitatively bad, and that predict negative outcomes like complaints, customer churn, or a failed sale.
“That is part of the excitement around some of the new AI technologies. AI can connect dots, find patterns, and extract qualitative and quantitative insights and recommendations,” he added.
Timing and Planning Key to AI Integration
When and how organizations roll out different tools to customers makes all the difference. Not every AI integration needs to be customer-facing, and you still need to make it easy for customers to connect with a human if needed, suggested Banerjee.
“AI technology is arguably at the peak of corporate expectations for value creation while also at the peak of customer mistrust and uncertainty. You could argue that both customer and corporate expectations are out of alignment. Over time, AI technologies will become qualitatively better, more empathetic, and more trusted,” he observed.
Lastly, AI technologies should not be limited to direct company-to-customer interactions. Companies can use AI agents, bots, and recommendation engines to empower their frontline customer service teams and improve the entire customer experience, Banerjee recommended.
He added that AI-driven insights can now help managers better serve their teams, boost employee well-being, and provide more precise coaching to frontline employees to serve their customers better.
“By deploying AI in the right places, like automating administrative tasks and processes, frontline customer service employees can devote more time to human connections with customers, creating a better customer experience,” concluded Banerjee.