RESEARCH REPORT
Customer service on the brink
Course correct now for future growth
10-MINUTE READ
March 13, 2025
In brief
- Service is failing customers at a cost for business. 87% of people surveyed say they're likely to avoid a company after just one bad experience.
- Only 18% of people say tech has improved their experiences—but companies are prioritizing tech, costs and efficiency ahead of the customer.
- Technology, data and AI—especially generative AI (gen AI)—when used right, can deliver efficiencies, lower costs and improve customer satisfaction.
The choices companies make today—where they invest, how they design experiences and how they build trust—will determine their relevance and growth for years to come. We see three essential actions service leaders must take. Now is the time to fix customer service.
Bad customer service is bad for business
Think about a recent customer service experience. How did it go? If bad, what’s your opinion of that company now? Our research found that 87% of people are likely to avoid a brand after just one single negative experience. And, as shown in the graph below, customer service isn’t hitting the mark.
Service or disservice?
What people told us about their interactions with companies.
Where customer service has gone wrong
During and just after the pandemic, many customer service functions were streamlined, deprioritized and forced to do more with less. Companies embraced an ad-hoc “survival mindset” approach to service that often solved for the enterprise ahead of the customer. More recently, companies have been ramping up their customer service investments, adopting new technologies, such as gen AI. But the integration of technology with data and AI is falling short. People know companies have data about them and question why it’s not being used to benefit them as customers.
On the one hand, customers feel they are investing more of themselves than they believe they should to get what they want and need. On the other, business priorities are misaligned at the expense of high-quality service. A majority of executives (64%) told us they’re actively making trade-offs between cost efficiency and customer satisfaction.
The good news? Prioritizing business efficiency over customer satisfaction is no longer a necessary compromise.
Generative AI can transform customer service, if done right
If introduced well, gen AI could be a game-changer for customer service solutions. But done wrong, it can add more frustration and friction. Our research found that 35% of customers are concerned AI will reduce the quality of service and don’t trust it at all.
It’s still early days for gen AI, but now is the moment to get this right.
Three actions to power up customer service for growth
01
Personalize every interaction to build trust
Self-service tools should do more than complete tasks—they should feel intuitive, responsive, and genuinely helpful, like a great customer conversation.
But AI-powered service shouldn’t stop at self-service. To create truly tailored support conversations, human agents need immediate insights and intelligent recommendations to better guide customers.
Look to the leading companies. They are
82%
more likely to use gen AI to help agents resolve customer issues faster and more effectively.
87%
more likely to implement the technology to personalize digital channels.
Get started by redesigning customer journeys by mapping real interactions, not idealized flow. Where do customers get stuck? Where is data repeated? Where does self-service fail to meet real needs?
Enhance self-service tools with AI so they can adapt to individual needs—make use of agentic AI to deliver faster, more personalized support.
And equip human service agents with real-time insights with the help of generative AI tools to move beyond generic service scripts to relevant, dynamic conversations.
Case study
Best Buy humanizes the customer support experience. Discover how generative AI is shaping the future of service at the electronics retail giant.
02
Predict and proactively solve customer needs
Companies with the best customer outcomes take bold steps, using data to be proactive and predictive.
Right channel, right time
Leading companies are 48% more likely to invest heavily in gen AI to improve predictions than those with the poorest service outcomes. Yet, only 14% of the executives we surveyed said their companies regularly use data-generated insights to improve customer service.
Move service beyond issue resolution with AI-powered customer service solutions built on real-time customer usage patterns.
Start by identifying high-volume, complex service issues that could be predicted and resolved before they escalate.
Then think bigger. Expand data sources beyond traditional service records to include behavioral, operational and third-party data for a fuller picture of potential customer interactions.
And be responsible. Ensure AI-powered predictions are explainable and accountable, so customers trust proactive service interventions.
“[My comms provider] contacted me with an offer to upgrade to faster broadband for less money. At first, I thought it was a scam. But they’d actually analyzed my household usage and realized I needed a better package. It was proactive, thoughtful and saved me money. I was very impressed!”
Gen X, UK
03
Power collaboration by putting service at the center
Even in our hyper-connected world, customer service still often remains siloed, leading to fragmented processes and gaps in the customer journey.
Enable insights to flow
Rethink service, not just as a support function but as a Customer Insights Hub, where every interaction not only resolves an issue but generates valuable intelligence. Until now, much of this insight has been overlooked or undocumented. Gen AI changes that.
High-performing organizations are already leading the way. 57% are more likely to use customer service insights to refine enterprise processes, from go-to-market strategies to product development. And those with the strongest customer service functions are 87% more likely to say that service plays a critical role in influencing their marketing strategy.
Sow the seeds of growth by setting up a Customer Insights Hub that centralizes relevant customer information across all touchpoints.
Ensure customer insights continuously flow across the whole company—embed them into marketing, pricing and enterprise-wise strategies, and use them to inform product innovation and to spot new revenue streams. And make it a priority to act on business intelligence. Align all business leads, data and AI specialists and creatives towards a joint strategy and shared goals to drive smarter and more aligned customer-centric decisions.
With today’s technologies, a more connected way of working is finally within reach.
