Welcome to the forefront of conversational AI as we explore the fascinating world of AI chatbots in our dedicated blog series. Discover the latest advancements, applications, and strategies that propel the evolution of chatbot technology. From enhancing customer interactions to streamlining business processes, these articles delve into the innovative ways artificial intelligence is shaping the landscape of automated conversational agents. Whether you’re a business owner, developer, or simply intrigued by the future of interactive technology, join us on this journey to unravel the transformative power and endless possibilities of AI chatbots.
New research from Qualtrics reveals that AI-powered customer service is falling short for UK consumers and it’s costing brands both loyalty and sales. With only 5 per cent of UK consumers saying they would prefer to use an automated assistant, such as a chatbot, and 80 per cent saying they haven’t used AI for customer service help or support recently, it’s clear there is scepticism around using AI across their customer experience.
The gap between expectation and reality matters. When asked why they choose one brand over another, almost half (46 per cent) of UK customers point to convenience, choosing to buy from brands because they make life easier, with good products and services close behind at 44 per cent. However, communication breakdowns remain a major source of dissatisfaction, driving 42 per cent of poor experiences in the UK.
AI service tools are not yet closing that gap. A third of UK customers (33 per cent) say they don’t trust the information provided by AI, while globally just 35 per cent report that AI customer support actually solves their problem. At the same time, more than half (58 per cent) worry they won’t be able to reach a human when companies use AI, compounding frustration when communication fails.
That frustration is colliding with feedback fatigue, which is leaving businesses without the insights they need to understand churn and continue building brand loyalty. A third (31 per cent) of UK consumers say nothing directly to the company after a bad experience. With nearly half (44 per cent) of bad experiences leading to cut spending, brands are losing loyalty and revenue without being able to understand why.
Isabelle Zdatny, Head of Thought Leadership at Qualtrics XM Institute, said, “Consumers can tell the difference between brands that use AI to genuinely improve service and those that deploy it purely to cut costs. In the UK, where consumers remain cautious about spending, brands cannot afford to deliver poor and impersonal experiences. The findings show that UK consumers expect seamless, convenient customer experiences, clear communication from brands, and assurance that their data is handled responsibly.”
Trust is at stake for brands. Developing trust with customers is vital to delivering a reputable CX that builds brand loyalty, but consumer concerns around AI are undermining efforts to nurture trusting relationships. While 63 per cent of UK consumers prefer to buy from brands that provide personalised experiences, a third of UK consumers (36 per cent) are uncomfortable with their information being used for personalisation, and only 40 per cent trust companies to use their data responsibly. Just 39 per cent believe the benefits received from sharing data with brands is worth the privacy trade-off.
UK consumers are among the most worried globally about hackers stealing their information, with 28 per cent saying this is their biggest fear when companies collect their personal information, compared with 23 per cent of global consumers. Recent high-profile breaches in the UK have sharpened those fears and left many questioning whether sharing data is worth the risk. But the research points to a way forward as nearly half of UK consumers (44 per cent) say they would share more data if companies were transparent about what’s being collected, while 47 per cent want greater control over how it’s used. Trust can be rebuilt if brands put transparency and control at the heart of their AI strategies.
Zdatny adds, “Competing on discounts or cutting costs with AI is short-lived. UK consumers reward companies that use technology responsibly, keep their data safe, and make it easy to get problems solved. Brand leaders should focus on convenience, clarity, and trust – the foundations of long-term loyalty. The brands that thrive will be those that use AI to enhance human connections, not replace them.”
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