30% of consumers say AI personalisation detracts from their experience: Report

Verizon CX Annual Insights report conducted by Longitude, a Financial Times company, reveals a growing disconnect between how companies use AI to improve customer experience (CX) and what consumers are experiencing. While executives see significant benefits from AI, consumers report mixed results, often citing a lack of human contact as a major frustration.

According to a survey of 5,000 consumers and 500 executives across seven countries, brands are actively developing AI use cases and see it paying off in areas like personalisation, customer support and customer loyalty. However, most consumers aren't seeing these same improvements. The study highlights several key findings:

Human touch is still king: Consumer satisfaction is much higher in interactions with humans than with AI. The report notes that 88% of consumers are satisfied with interactions handled mostly or fully by human agents, compared to only 60% for those driven by AI.

Lack of human agent is the biggest frustration: The top frustration for nearly half of all consumers (47%) is the inability to speak with a live sales or customer service agent. Brands recognise this, as a similar percentage of executives report this as the main complaint they receive about AI-enabled interactions.

The Personalisation Paradox: Despite personalisation being a top AI use case for 71% of companies, consumers are unimpressed. The report found that more consumers said personalisation has detracted from their overall experience (30%) than improved it (26%). Data privacy rules are a major factor, with 65% of executives saying they limit their ability to use AI for personalisation. This is particularly concerning as 54% of consumers say their trust in companies to use their data properly has declined in the past two years.

Morlon Bell-Izzard, Senior Vice President of Customer Experience at Exelon, highlighting that empathy is far more preferable when dealing with complex issues, said, "Even if we manage to build empathy into AI, that's not going to satisfy all the needs that customers have".

John Aylward, a Career Chief Marketing Officer, also noted the frustration consumers face with AI, stating, "When brands do AI chatbots well, consumers want more of the experience. But so few do them well”.

Despite the challenges, the report indicates that executives are not planning to replace humans with AI entirely. The largest percentage of companies (44%) plan to split their future investments in CX roughly evenly between AI-driven and human-driven improvements. This hybrid approach means that customer-facing staff will need new skills to work effectively with AI. According to the report, top training priorities for staff include handling customer complaints about chatbots and understanding AI prompts during interactions.

Daniel Lawson, SVP, Global Solutions at Verizon Business, said, "The future of CX isn't about AI replacing humans; it's about using AI to make human interactions better. Businesses that use AI to preempt customer needs, empower their employees, and enhance personalisation while respecting privacy will be the market leaders of tomorrow."

The report noted, AI is being leveraged by companies to enhance team capabilities and improve customer experience, rather than to replace human input.

As outlined in the Insights report, energy utility company Exelon used AI and predictive analytics to identify middle-income households that might have trouble paying their energy bills during COVID-19 lockdowns. This enabled them to proactively reach out with personalised recommendations for assistance programs, earning customer appreciation and proving that AI can solve real-world problems with a human-centric approach.

Instead of being used to replace human agents, AI is being used to make them more effective, the report stated. Exelon is piloting generative AI to help its customer service representatives handle calls more efficiently by providing the right data at the right time and summarising calls, which eases the agent’s burden.

This is said to align with the report's finding that companies are now equally prioritising investments in both human and AI-driven CX improvements.