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Why you should rethink AI-powered customer experience as human experience

Technology will transform customer experience. Competitive differentiation will come from connecting to what is essentially human.

In brief

  • AI unlocks new ways to gain customer insight and deliver digital and physical customer experiences that could confer competitive advantage today.
  • In the near future, these customer experience tools will quickly become ubiquitous, setting a baseline of performance.
  • Differentiated experiences will emerge from paradox: tech-driven seamlessness operating alongside the imperfections and frictions of human interactions.

Business leaders face a rapidly transforming customer landscape reflecting the growing complexity and increasing disruptions of the broader business environment. Leaders must navigate new customer channels, changing consumer expectations and challenging data imperatives.

The stakes are high. Companies able to deliver leading customer experiences enjoy a significant competitive advantage. With compelling experiences, companies can stand out amid the noise and generic content of crowded channels, redefining and transforming their customer relationships.

The astonishing pace of generative AI (GenAI) development and adoption opens disruptive new opportunities to scale content creation and personalization in customer experience. It also provides an access point to the insights of other kinds of AI and other experiential technologies.

Yet, by its nature, GenAI is democratizing. Its capabilities will become widely accessible and widely applied. As this foundational technology makes complex customer experiences simpler and cheaper to execute, finding the right use cases will become table stakes, and standing out from the crowd will become all the more difficult.

Differentiated customer experiences amid the flux in technology and capabilities depends on anchoring on what’s constant — human values, behavior and emotion — focusing on four key areas:

  • Don’t fall into an Uncanny Valley.
    People can be unsettled by human-like representations and interactions that are not good enough, too perfect or betray too much knowledge of them.

  • Cultivate trust to be relevant.
    Machines will generate vast quantities of customer data, but human-to-human trust will persuade customers to provide truly valuable data.

  • Maintain human agency in experience.
    As technology becomes increasingly predictive and autonomous, both the customer and the customer experience teams must be able to direct and validate the outcomes.

  • Optimize for human experience.
    Every successful customer experience maps to an underlying employee experience, and both have human imperatives that need to be treated holistically.

Ultimately, leaders will have to embrace the human experience paradox: Customer experience must become both more seamless with technology and less seamless with human interaction. Technology should not be considered a replacement for human touchpoints but as an enabler for better human-led experiences.

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Chapter 1

Technology will become table stakes for customer experience

The democratizing nature of new technologies will make their effective deployment a new baseline, not a differentiator.

Experience leaders have an advantage at every stage of the customer journey, from acquisition to advocacy. In a noisy and crowded business environment, where share of customer attention and trust are increasingly hard to win, delightful, empathetic experiences can differentiate brands and build loyalty.

Technology will be central to delivering these experiences and creating value; yet, the democratizing nature of new technologies and the growing ecosystem of experience solution providers will make them widely accessible — effective deployment of these will become a new baseline, not the differentiator.

Customer experience drives competitive advantage

It’s no secret that customers reward organizations that provide exceptional experiences. Customers are 3.8 times more likely to make return purchases after a successful experience than after an unsuccessful one.1 With customer acquisition costs up 60%2, experience-driven loyalty yields a significant financial advantage.

The focus on experience also drives value in surprising ways. The EY Tech Horizon study shows that highly successful transformations — those exceeding expectations on key indicators — focus more on creating new products and experiences, and use AI to drive innovative offerings. This translates into 42% higher forecast average annual revenue growth for the companies whose transformations exceed expectations.

The EY Future Consumer Index (FCI) underscores the growing importance of interlinked technology and experience to consumers, who expect improvement in both and will direct their shopping and spending accordingly: 54% of consumers expect their experience of technology to improve over the next three years, while 49% of consumers expect their experience of shopping to improve in the same period.3

Given technology’s growing importance in delivering on consumer expectations, many business leaders see promise in utilizing GenAI to close their customer experience gaps. The top-ranked GenAI focus among senior executives is enhanced customer experience and service (44%), according to IDC's global GenAI ARC Survey.4

GenAI will be a leveler in customer experience

Company leaders look to GenAI for enhanced experience, speed and competitive differentiation. However, the very nature of GenAI makes it a leveler. GenAI provides an access point to the insights of other AIs — from pattern recognition to machine learning and cognitive. It democratizes the ability to query structured and unstructured data, and to create content on the fly.

Every marketer will be able to deploy GenAI to create personalized content at scale. This threatens to swamp the customer with content, much of it generic, creating challenges for brands seeking to stand out from the crowd.

An indication of what could come is provided by what is happening in news, a bellwether for disruptions to content generation and distribution: More than 800 websites use AI to generate ”unreliable” news content without significant human oversight.5 The sites also use AI to promote the content in search and social to achieve higher rankings than traditional news sources.6

Achieving differentiation will be made more challenging by the advent of consumer-controlled AI agents who will stand between customers and companies. The startup DoNotPay has taken a significant step in this direction. DoNotPay’s AI assistants help consumers do things as various as negotiating better lease terms, lowering utility bills and securing hotel upgrades. Rather than companies speaking to customers, corporate AI may soon be communicating with customer AI. By 2026, 20% of inbound customer service interactions will be handled by machine customers, according to Gartner predictions.7

Moreover, as technology — whether AI or other tech — increasingly enables analytics and autonomy, everything related to customer that can be optimized will be, reducing the competitive advantage of efficiency. It was harder to distill customer insight in the past when companies relied on surveys and transactions volumes to understand the consumer. Now companies have an abundance of voice-of-the-customer data. They can analyze every call in a call center, monitor voice stress patterns, track customer behaviors in stores and assess the use of Internet of Things (IoT)-enabled products. Anything previously unstructured can now be structured and analyzed.

A growing innovator ecosystem increases accessibility

A well-funded and rapidly growing universe of customer experience innovators will ensure that experience excellence is widely accessible. Over $100b in venture capital (VC) and private equity (PE) was invested in over 100 companies developing customer experience solutions between 2019 and 2023— see Fig. 2. VC and PE investment in experience reached $20b in 2023. That marks the highest annual figure in the last 10 years, outside the pandemic-fueled peak of $36b in 2021, when companies accelerated digital transformation.8

The widespread deployment of GenAI and other experiential technologies will make mastering them customer experience table stakes — crucial to creating the capabilities needed to compete, but not enabling them to differentiate as winning factors in themselves. Companies will have to go beyond technology to create customer experiences that truly resonate.

Male artist in his studio, pouring acrylic colors on canvas.

Chapter 2

Stand-out experiences are rooted in human values, behavior and emotion

Human imperfection will be the foil to seamless experiences delivered predictively and autonomously. Avoiding Uncanny Valleys, building trust and optimizing for human experience will be essential.

Human values, behavior and emotion will differentiate customer experience in a world increasingly driven by machine intelligence. Qualities such as empathy and imperfection will be the foil to seamless experiences delivered predictively and autonomously. Instead of delegating customer experience to machines, finding opportunities to create signature moments with human sensibility and agency will be key.

“Experiences are felt at an emotional level,” says Edwina Fitzmaurice, EY Global Chief Customer Success Officer. “This isn’t something that is often considered by engineering teams who can focus more on an action to be achieved, rather than an experience to be felt.”

The personal touch
of consumers value human interaction or assistance for all purchases.

Don’t fall into an Uncanny Valley

As GenAI, affective AI (which detects mood and emotion), spatial computing and other technologies enable ever more realistic interactions with customers, efforts to create hyper-realistic digital experiences run the risk of sparking negative reactions — the Uncanny Valley effect. 

Achieving authentic and resonating experiences enabled by tech requires even more emphasis on connecting to emotions and imperfection to avoid feeling generic.

The first Uncanny Valley, a term coined by the pioneering roboticist Masahiro Mori, referred to the unease or revulsion people can feel when encountering technologies such as robots or digital avatars that seem almost human. This is the territory we’re in with today’s technology. For example, a recent study found that highly human-like virtual influencers induced the Uncanny Valley effect in participants and were less likely to be followed than obviously non-human ones.9

As GenAI and other technologies evolve, we are also seeing the rise of a potential second Uncanny Valley: distrust caused by the perfect but generic AI interactions we’re likely to have soon. These may make experiences consistent and seamless but could also make them anodyne and soulless. Humans engaging with AI-led experiences may ultimately find the inauthentic perfection of them more alienating than endearing.

That’s because to be human is to be imperfect. This idea finds precedence in the Japanese concept of wabi sabi: finding beauty in the imperfect, authentic and simple. For example, a major retailer has launched a line of pottery made of recycled shards, each unique, where the imperfection signals purpose and human touch.

The experience of a US Fintech, which was designing an offering for retirees, demonstrates the value of connecting with authentic emotion. In contrast to the images of carefree older people, which dominate financial industry portrayals retirees, interviews with retired people revealed complex emotions: shame at needing discounts; worry about their ability to make benefits meet monthly expenses; and anxiety about fraud. The company built a highly successful offering around meeting these concerns, utilizing “imperfect” images, real family photos and videos reflecting the life journey of a retired person.

“Achieving authentic and resonating experiences enabled by tech requires even more emphasis on connecting to emotions and imperfection to avoid feeling generic,” says Lisa Lindstrom, EY Global Consulting Innovation and Experience Design Leader.

Cultivate confidence to be relevant

GenAI can create insights from unstructured data to provide an unprecedented understanding of human behavior. Yet, the technology cannot ensure experience is relevant to each customer, and there may be aspects of the customer that cannot be fully understood or anticipated by a machine. It may know what we want, but likely doesn’t know why we want it.

Confidence in AI
of consumers do not have confidence in purchase recommendations from AI.

“GenAI knows everything, but does it know me? Customers will determine the answer to this question based on the relevancy of the experience it delivers,” says Kristina Rogers, EY Global Consumer Leader. “Achieving relevancy depends less on the quantity of data and more on the quality of it.”

Customer data has potential energy, and only the right approach can make it kinetic. Trust and loyalty today unlock the permission to obtain the right data to deliver better experiences. People have greater confidence in people than machines.

Personal details
of consumers prefer to share personal details with humans compared to 21% who do not.

Reflecting this dynamic, a US supermarket chain has partnered with a same-day shipping specialist to increase its digital reach for grocery delivery, but still sends staff out to meet individual customers in their homes and collect “small data” on what their expectations of experience, assortment and service should be.

No matter how data is shared, meeting customer concerns about data security and privacy is essential to confidence. Consumers are “extremely concerned” about ID theft/fraud (61%), data security/breaches (59%) and selling personal data to third parties (58%), according to the FCI.10

Privacy concerns carry over to the use of data. If customers feel unsettled by the level of insight AI has into their lives without having opted in to sharing, it could prompt yet another Uncanny Valley. This underscores the need for human direction to ensure that the experience offered by AI is transparent, appropriate and contextual.

Sharing data back with the customer and what it reveals, rather than only taking from them, can engender confidence and loyalty by shifting the relationship dynamic from “the brand understands me” to “the brand helps me understand myself.”

Customers must have confidence in your empathy and that you are acting in their interest. CX is not a journey that ends with a transaction. It’s a cycle that runs through the lifetime relationship with the customer. When it fails, confidence and loyalty will disappear.

Maintain human agency in experience

New risks arise as customer experience becomes more anticipatory and autonomous. Crossing the fine line between curation and dictation can miss the value that maintaining human agency in experience generates for both customers and the companies. Experience design and delivery without adequate human judgment and validation puts differentiating authenticity and commercial outcomes at risk.

Agency is a key dimension in immersive physical and digital experiences. When people are empowered to discover and be rewarded to the degree they choose, the result can be transformative for the participant in the experience and their relationship with the company hosting it.

This transformative possibility is reflected in the growing desire of customers to have more immersive experiences. Companies have an opportunity to engage customers through shared experiences brought to life with storytelling, art and technology in interactive physical and digital environments.

Similarly, customers will increasingly want to exercise their agency by participating in the co-creation of products and experiences. “Experience will no longer be one-way, where the company controls and curates access to information, buying terms, and products,” says Rogers.

She notes that this will challenge incumbents because legacy systems and assets are not geared toward allowing customers to participate in the business at scale. The risk in not being able to deliver on promised experiences is high: Unlike earlier generations, Gen Z is unforgiving of technical failures.

It will also be important to maintain human agency in creating and delivering customer experiences. While AI can create, personalize, and anticipate using customer data, people must remain the decision-makers. People must apply human sensibility to validate the authenticity and differentiation of experience. “Tech can inform decisions,” says Lindstrom, “but creative people need to interpret customer insights and turn them into the narrative and connection you want to build.”

Offering experiences without an adequate filter of human judgement and validation also creates risk. “Humans need to assess whether an experience or offer is intuitive and makes sense in terms of how a human would connect with it. AI might generate the wrong answer with commercial and reputational repercussions,” says Helen Bentley, EY Global Digital Strategy, Innovation and Experience Leader.

Optimize for human experience

The need to address human emotion, authenticity and agency doesn’t exist only on the customer side of experience. Care must be given to the needs and pain points of the people delivering customer experiences — employees and channel partners — because customer experience and employee experience are interdependent.

“If you map the journey of someone's positive customer experience, there is an underlying employee journey experience that shows how the dots are connected.” says David Clarke, EY Americas FSO Customer and Front Office Excellence Leader.

While most companies map customer pain points and seek to turn them into signature moments, few map and solve employee pain points along the customer journey. Only 37% of executives in a recent survey said that their organizations had invested in improving employee experience to serve customers better.11

If you map the journey of someone's positive customer experience, there is an underlying employee journey experience that shows how the dots are connected

Creating a positive employee experience entails taking an ecosystem view, creating the culture and conditions that will enable employees to be productive and achieve what they’ve been asked to do. Incentives, policies, IT and the intangibles of workplace environment all come into play. As highlighted by the EY Work Reimagined Survey, leaders overestimate how well their organization is performing in employee experience, resulting in a significant employee/employer perception gap.

“To close gaps in employee experience, organizations must work differently to create more meaningful employee experiences that maximize long-term value creation — for people as much as the business,” says Maya Smallwood, EY Global People Advisory Services Employee Experience Leader.

The importance of employee experience to customer experience extends to companies whose products are sold and installed indirectly, such as household appliances, furniture or HVAC equipment. “Many of these companies have never really had a deep connection to the end customer — the relationship ends at point of sale,” notes Sachin Lulla, EY Americas Advanced Manufacturing and Mobility Sector Consulting Leader.

There’s an opportunity to change this dynamic by creating value for the customer throughout the product ownership lifecycle through transforming previously “dumb” products (e.g., water heaters) into smart connected products that meet the growing customer expectation that any product will deliver experience on par with their digital devices.

Yet, the first opportunity to create a signature experience that sets the stage for taking ownership of the product lifecycle is a human one that channel partners deliver — installation. “Better customer experience is driven by a better employee experience — supporting people with the right insights at the right time — across both your employees and channel partners,” says Lulla.

Both direct employees and people in the extended ecosystem require training, upskilling, incentives and access to real-time insights to boost their satisfaction and performance — particularly when AI is perceived as a threat to job security.

A positive customer experience will almost always be dependent on a positive experience for all the people involved in delivering it. This creates a positive cycle — satisfied employees help make satisfied customers, which in turn helps boost employee satisfaction. We should stop thinking about “customers” and “employees” and instead optimize for human experience.

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Chapter 3

Embrace the paradox of human experience

We need to scale experiences efficiently with technology while introducing friction in the form of the human agency and interaction to make experiences authentic, real and memorable.

Centering experience on human values creates a paradox: To be successful, experience needs both to take out friction and add friction. Seamlessness must operate alongside stickiness.

On one side, we need to make experiences scale efficiently — these are the technology table stakes.

On the other side, we need to introduce friction in the form of the human agency and interaction to make experiences authentic, real and memorable. The challenge is to find the right balance for your brand and experience portfolio.

Experiences are felt at an emotional level. This isn’t something that is often considered by engineering teams who can focus more on an action to be achieved.

Technology should not be considered a replacement for human touchpoints but as an enabler for better human-led experiences. For example, many supermarkets are reintroducing human cashiers and shutting down automated self-checkouts. This is, in part, because human checkouts are not only faster, but they’re more engaging than self-checkouts, which can be fraught with pain points when even simple things go wrong. Similarly, an AI-led customer experience will be far richer if it has a human element at the right time.

The shift from customer experience to human experience requires focusing on the human needs and considerations across all stakeholders, from customers to employees to ecosystem partners.

Key considerations for making the shift from customer experience to human experience include:

  • In a rapidly shifting customer landscape driven by new tech capabilities, experiences must anchor on the constant of human values.
  • Technology should not be a solution looking for a problem, but an enabler to help human endeavor succeed more effectively.
  • Even as technology becomes anticipatory, autonomous, and generative, double down on human agency both the customer and people that deliver the experience.
  • Turning pain points into signature moments requires rethinking customer experience as a spectrum that balances between technology-led efficiency and optimal human engagement.
  • Embrace uncertainty and fluidity in the spectrum of experience. The blurring line between customers and creators and the ability to integrate your ecosystem into your experience will be key.
  • Over-indexing on fully immersive experiences and hyper-personalization isn’t always the answer; instead, you need to find the right place in the spectrum for your capabilities and your customer’s expectations.
  • Make space for non-linear thinking to surface the human dimension in experience. Establish top-down imperatives to shift culture toward optimizing experience for everyone.
  • Convene different mindsets and disciplines to explore human-centered experiences that include considerations of GenAI use cases, experience design and customer journey scenarios.

With special thanks to Michael Wheelock and Lisa LaMotta for their contributions to this article.


In the rapidly transforming customer landscape, competitive edge hinges on human-centric experiences. GenAI, by democratizing customer insight and content generation, will become table stakes in customer experience. True differentiation lies in embracing the paradox of human experience: To be successful, experience needs to remove friction through technology and add it through authentic human connection, leveraging trust, intuitiveness, and emotional resonance to stand out.

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