According to the 2024 Forrester Research Customer Experience Index report, customer experience quality has declined for the third consecutive year — an unprecedented trend. 

Customer service expectations are steadily rising, and many companies struggle to keep up as they scale, potentially leading to customer churn and impacting their bottom line.

So, why the downward trend? Wasn’t the widespread adoption of AI tools supposed to make CX better, not worse?

Why Is CX Quality Decreasing?

The Forrester Report revealed that 39% of brands and 10 industry averages have seen a decline in CX quality over the past year. This decline spans across all three dimensions Forrester uses to measure CX quality: effectiveness, ease, and emotional connection.

In other words, consumers often experience CX interactions that leave them asking, “Why is customer service so bad now?”

We believe companies struggle to meet customer expectations for three main reasons:

1. They’re Only Focusing on Costs

Prioritizing costs over all else — including quality, ease of use, and human touchpoints — contributes significantly to the ongoing decline in CX. 

Brands are increasingly focused on cost savings, often at the expense of quality customer service experiences. For example, during the RFP and vendor selection process for outsourced partners, price often overshadows factors like CX quality, contract flexibility, and collaboration capabilities. This focus leads to unsustainable contracts that appear cheap initially, but become costly — and can even prohibit growth — when changes are needed down the line.

Additionally, a lack of quality often results in hidden costs, such as losses in customer lifetime value and damage to brand reputation — quickly canceling out any surface-level cost savings. 

Even in our own studies, we’ve seen brands coming to the realization that service quality cannot be left behind in the search for cost savings.

2. They’re Not Connecting with Customers

In an attempt to cut costs, some brands completely replace human interactions with self-serve tools. These tools — including knowledge bases and chatbots — often offer great value, but don’t provide for the kind of emotional connection that drives loyalty — and they often don’t align with what customers want from customer service.

Research by COPC Inc. found that while 46% of executives are trying to transition human interaction to self-serve options, 53% of customers still prefer real-time human assistance. Additionally, 59% of consumers feel companies have “lost touch with the human element of customer experience.”

This disconnect is leaving customers dissatisfied.

3. They’re Not Using AI with CX in Mind

AI was initially expected to improve customer experiences through increased efficiency and effectiveness. However, the reality is often different — despite significant investments in AI solutions, many companies find that customer satisfaction is deteriorating. 

AI has its place in CX (especially when there’s a human in the loop), but it should never be the only option. 

Importantly, AI notoriously struggles with emotional understanding and empathy, further contributing to the lack of connection. This lack of empathy often frustrates customers, especially when they struggle to bypass automated systems to speak with a human — getting stuck in an AI loop when trying to reach a live representative is a key source of customer service frustration, and makes customers feel like you don’t care about their experience. 

AI can also provide incorrect information, compounding user frustration, and without human oversight, AI-driven approaches risk further accuracy degradation over time. 

At SupportNinja, we’re firm believers that a strategic blend of AI and human interaction offers the best outcome. By combining AI efficiencies with human empathy, companies can leverage technology without sacrificing the human connection that’s crucial for maintaining customer trust and loyalty.

Customer-Obsessed Organizations Come Out on Top

Prioritizing customer preferences generates significant benefits. Forrester found that customer-obsessed companies — those that put “customers’ needs, desires, and satisfaction at the forefront of all business decisions and actions” — report 41% faster revenue growth, 49% faster profit growth, and 51% higher customer retention.

Investing in CX quality is vital for growth, whether it pertains to profit, revenue, or customer retention. To achieve these results, businesses should focus on quality over cost savings in their CX technology investments.

This approach doesn't necessitate abandoning self-service and AI tools; instead, it calls for thoughtful application with the end user in mind. By prioritizing customers, organizations can achieve strategic goals around retention, repeat business, and positive brand perception.

Let’s Get Back to the Basics (But Better)

Current statistics around the state of customer service may seem bleak, and there's definitely room for improvement. But companies that emphasize CX quality along with cost, make genuine connections with customers, use AI thoughtfully, and prioritize customers in all they do will find significant opportunities for growth. 

At SupportNinja, this is our sweet spot. Our approach ensures that our human agents, supported by AI, assist customers with efficiency, accuracy, and ease. This blend of technology and human touch offers the best of both worlds, addressing customer needs efficiently while maintaining the personal connection essential for a positive experience.