AI Agents Are Rising — But Customer Experience Is Falling Behind

Why the future of customer service needs a balance of artificial and emotional intelligence

Everyone’s talking about how AI agents will soon handle every customer service task — from resolving queries to managing sales calls. The promise of an always-on, data-driven, efficient contact center sounds almost irresistible.

But there’s one big question being ignored: What about Customer Experience (CX)?

According to the latest Qualtrics 2026 Consumer Experience Trends Report, the reality of AI-powered customer service isn’t living up to the hype. In fact, nearly one in five consumers say they see no benefit from AI in customer service — a staggering failure rate that’s four times higher than AI applications in other areas.

So while businesses celebrate automation gains, customers aren’t feeling the love.

AI Is Missing the CX Mark

In today’s hyper-digital world, 73% of consumers use AI daily. Yet, when it comes to AI in customer support, the experience often feels impersonal, rigid, and frustrating.

Qualtrics researcher Isabelle Zdatny explains,

“On the surface, the CX improvements paint a surprisingly rosy picture, but when we dug into the numbers, we found a more complex reality.”

Industries with low switching barriers, like retail and streaming, show surface-level CX gains — customers can easily move if they’re unhappy. But in utilities, healthcare, or finance, where switching is harder, the cracks are widening. Poor experiences now risk real revenue loss — 6.1% of sales at risk in “protected” industries compared to 4.0% in transactional ones.

The message is clear:
AI cannot be implemented with a cost-cutting mindset alone.
When automation becomes the goal — not better experience — customer trust begins to erode.

Experience, Not Price, Builds Loyalty

While “value for money” remains a top reason for choosing a brand (46%), it’s not what keeps customers loyal.

Consumers who stay with a brand for “good customer service” report:

• 92% satisfaction, compared to 87% for value-seekers
  
  

• 89% trust, compared to 83% for price-driven customers
  
  

That means real loyalty comes not from discounts, but from dependable human experiences — empathy, problem-solving, and reliability when things go wrong.

Brands chasing efficiency at the cost of connection may win the short-term race — but lose the long game.

The Trust Deficit in Personalization

Personalization is supposed to make customers feel understood. But what happens when they don’t trust the company behind the algorithm?

The Qualtrics report reveals a worrying trend:

• 64% of consumers want individualized experiences
  
  

• Yet only 39% trust companies with their data
  
  

The trust deficit is widening. Misuse of personal data is now the top consumer concern about AI — rising eight points in just one year. Nearly one-third of consumers are uncomfortable with personalization in any form.

This is a wake-up call.
Without transparency and consent, personalization backfires — coming across as manipulative, not meaningful.

AI Should Augment, Not Replace, Humans

The lesson from the world’s largest call center operator, Teleperformance, offers a glimpse of how to get it right.

With over 500,000 employees in 100 countries, TP could easily automate aggressively. Instead, it’s choosing to blend Artificial Intelligence (AI) with Emotional Intelligence (EI).

“AI is not going to replace all our jobs,” says Alan Winters, TP’s Chief Privacy and Data Ethics Officer.
“It’s going to allow us to put resources where human interaction has the most impact.”

TP uses AI to listen, not replace. For example, during candidate recruitment, AI tools analyze tone and responses to support recruiters — but the conversation remains human-to-human.

Winters puts it simply:

“I could automate 100% of my recruiting process. But is that what I want new employees to experience if I say we’re a people-first organization?”

This philosophy — tech that enhances, not eliminates, humanity — is what differentiates thriving organizations from those that merely survive the AI wave.

How to Build a Human + AI Customer Experience Strategy

Here are some takeaways for CX and contact center leaders navigating the AI revolution:

Next Steps for Brands

To succeed in 2026 and beyond, organizations need to realign their AI strategies with human priorities.

1. Enhance, Don’t Replace, the Human Touch
   Use AI for background assistance, not as the frontline. Let it fetch context, summarize history, and suggest solutions — while agents focus on empathy and resolution.
   
   

2. Invest in the Experience Economy
   Compete on service quality and reliability, not discounts. Customers will pay more for peace of mind and genuine care.
   
   

3. Rebuild Trust Before You Personalize
   Be open about what data you collect and why. Give customers clear options to manage or delete it. Trust is the new currency of personalization.
   
   

4. Train for Emotional Intelligence
   Just like Teleperformance, organizations should upskill teams in empathy, listening, and ethical AI use. Technology without humanity is just noise.
   
   

The Path Forward: CX Is Still the Differentiator

As automation scales, empathy will become the rarest — and most valuable — skill in business.

AI agents may one day handle 90% of routine customer interactions. But the 10% that truly matter — the moments of frustration, emotion, and vulnerability — will always require humans.

The brands that thrive in the coming decade will be those that understand this balance:

AI for efficiency. Humans for empathy. Together, for trust.

About CloudConnect
CloudConnect is India’s first licensed B2B Digital Telco, empowering enterprises to build human-centric communication experiences through AI-powered cloud contact center solutions. Learn more at www.cloudconnect.in.

Reference

1. https://www.reuters.com/

2. https://www.cmswire.com/