CX in the age of AI: What’s working and what’s not
AI is reshaping customer experience, but is it making things better — or just more frustrating?
AI is everywhere in customer experience (CX) right now — but is it actually making things better?
That’s the big question host Tom Lewis, SVP of Consulting at TTEC Digital, and guest Max Ball, Principal Analyst at Forrester, tackled in our latest Experience Exchange session.
Max brought data, real-world examples, and candid advice on where brands are getting AI right — and where they’re falling short. Here are the highlights.
The CX Index is dropping — here’s why that matters
Forrester’s Customer Experience (CX) Index™, which surveys about 10,000 consumers annually, has tracked a historic decline in CX quality. “Times have been hard for consumers lately,” Max shared. “This is the first time ever the index has gone down three consecutive years.”
That’s a red flag for brands. CX quality directly impacts customer loyalty, and when experiences don’t meet expectations, customers don’t stick around.
As Max put it: “When you get those three things right, the reward that you get is customer loyalty. You get retention — how long are they going to stay? You get enrichment — which is a lovely fancy word for cross-sell/upsell. And you get advocacy — net promoters and all those sorts of things.”
The numbers from Forrester’s CX Index™ back it up: When customers feel appreciated by a brand, 88% are likely to stay loyal to it.
88%
Percent of customers who, when they feel appreciated by a brand, are likely to remain loyal to it, according to Forrester's CX Index™.
FCR: Small change, big impact
First-contact resolution (FCR) is a major driver of customer satisfaction and revenue. Max put it plainly, “I just think first-contact resolution is really important. Period. End discussion.”
The impact varies by business size, but for large-scale companies even small improvements can mean big dollars. “For an airline with 40 million customers, if you get the first-contact resolution right, you’re talking $700 million a year,” Max shared. In industries like home and auto insurance, that number can climb into the billions.
Not every company operates at that scale, but the principle holds: Resolving issues on the first try doesn’t just make customers happier — it directly affects the bottom line.
AI, self-service, and the chatbot conundrum
Self-service is gaining traction as a cost-effective solution for brands. Max pointed out that automated interactions cost about one-tenth of what it takes to interact with an agent. So it makes sense why so many businesses are pushing chatbots and AI-powered self-service.
However, Max cautioned that while AI helps automate simpler tasks, it doesn’t solve everything. “AI is not magically going to blow the scope of what you can do out of the water,” he explained. “But it is going to make it a whole lot easier to add things that your chatbot does so that you can start growing the scope."
For now, when it comes to complex issues, Max shared data from Forrester showing that customers still prefer old-fashioned human interaction over any AI-boosted self-service option for most interactions.
Here's the breakdown:
- Make a payment: 71% prefer self-service, 29% prefer human
- Request product info: 51% prefer self-service, 49% prefer human
- Delivery issue: 27% prefer self-service, 73% prefer human
- Have a product/service problem: 18% prefer self-service, 82% prefer human
- Solve a difficult tech problem: 14% prefer self-service, 86% prefer human
- Solve a billing dispute: 12% prefer self-service, 88% prefer human
And herein lies the disconnect. As businesses pour resources into these cost-saving AI-powered chatbots, consumers often actively trying to avoid them.
According to the Forrester research Max shared, 67% of U.S. brands have invested in or are planning to implement chatbots, yet only 16% of U.S. consumers report using them often when seeking support.
Max didn’t mince words about this: “We all know chatbots suck”. The issue isn’t necessarily with the technology itself but with its implementation. A badly designed chatbot can confuse customers, waste their time, and lead them to the same agent they were trying to avoid in the first place.
These gaps — between AI investment and customer adoption, and customers’ preferred channels vs. the cheaper options brands are pushing them toward — aren’t just inconvenient, they’re harmful to the customer experience.
Badly executed chatbots fail to deliver on their promise and instead create more problems. As customers get stuck in chatbot traps, agents bear the brunt of the frustration, making what should be an efficient experience a negative one for everyone involved.
16%
The percentage of U.S. consumers who report using chatbots "often" when seeking support. Meanwhile, 67% of U.S. brands have invested in or are planning to implement chatbots, according to Forrester research.
How brands can get AI right
All this begs the question: what’s the right way to integrate AI into CX?
Max and Tom shared a few must-follow strategies to help companies turn their AI investments into real customer experience improvements, without the frustration that often comes with poor execution.
- Start with internal applications. Before rolling out AI to customers, use it for internal analytics, summarization, and reporting. “Have a framework — start in internal-facing analytics, summarization, reporting, move on to agent assist,” Max advised. “If you have a hallucination that you give to an agent who's been on the job a week, I don't know how good of a filter they're really going to be.”
- Avoid a patchwork of AI tools. Many brands take a fragmented approach to AI — buying point solutions for individual use cases. While this may deliver quick wins, it creates long-term complexity. “Please don’t buy five point solutions from five different vendors to solve five different problems,” Max warned. “Then you’re building a mess.” Instead, ensure AI investments align with a broader CX strategy. Prioritize solutions that integrate, scale, and provide clear ROI to drive efficiency without adding complexity.
- Focus on personalization. Customers expect brands to know who they are and anticipate their needs. As Max put it, personalization isn’t just a better experience, it’s also a cost-saving opportunity. When a brand recognizes a customer immediately, it reduces friction, speeds up resolution, and eliminates unnecessary steps. “Easy is fast,” Max explained. “I call, they know who I am, they know why I’m calling — boom.” The less time spent verifying identity and intent, the more efficient and cost-effective the interaction becomes.
The future of CX: Artificial plus human intelligence
As AI continues to shift, successfully adopting it for better CX will hinge on finding the right balance between automation and human intelligence. AI can streamline processes, but it’s human insight that makes the difference.
Like most customers, Max said that for simple, straightforward questions, he too prefers automation — so long as it's easy. But the second issues get more complex or frustrating — like a billing error — he needs someone who can make an exception, not just offer empathy.
“I need a judge who can say, ‘I know what the rule is, but we’re going to change this for you because we love you.’” That kind of flexibility is where humans still have the upper hand over AI. And why making sure human-to-human touchpoints still exist along your customer journeys remains imperative.
While human touchpoints are crucial, Max also emphasized the urgency of moving forward with AI, no matter where you start. As he put it, "Waiting right now would be suicide. The value is there, imperfect though it may be. [Companies] go out and they start [with AI] and they try it with their first customers and it’s rough and it’s not great, but it gets there. If you're not being part of that journey, you're never going to get there. And that's not going to be good for your business."
Max’s perspective speaks to a deeper truth in CX innovation: It’s never just about adopting technology. Adoption is only the beginning. What matters is how you integrate it, evolve with it, and keep improving. Those who embrace the journey — and adapt along the way — will be the ones who succeed in harnessing tools like AI for better CX, more loyal customers, and stronger results.
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