Customers are generally not happy with the experiences they are having with brands.

Last month, Forrester published the US 2024 Customer Experience (CX) Index, which found that US customers’ perceptions of the quality of experiences that they are receiving from brands have declined for the third year in a row and have now hit levels not seen since 2017.

Moreover, this month, the UK’s Institute of Customer Service released its latest UK Customer Service Index (UKCSI), revealing that its index, which reflects UK customers’ perceptions of the quality of customer service that they receive from brands, had dropped to 75.8, a decrease of 2.6 points compared to July 2022 and the lowest score recorded since 2015.

Now, 80% of business leaders say that improving CX is a priority. So, it’s fair to say that many brands have been trying to make good on delivering stand-out experiences. But, unfortunately, they are having to contend with customer expectations that are often growing at a faster pace than they can keep up.

So, what are the causes of the gap between customer expectations and satisfaction, and what can businesses do about it?

Anurag Dhingra, SVP of Engineering and CTO at Cisco, believes that there are three contributing factors that go a long way towards explaining this gap.

In a recent conversation, he explained that the first factor is brands’ over-reliance on virtual agents in recent years.

Now, there is nothing wrong with the idea of virtual agents. A recent study by Futurum and Webex found that 9 out of 10 customers want to use self-service tools. The problem lies, however, with their effectiveness.

The same study reported that less than half of all customers find today’s self-service options helpful.

The second factor he mentioned was a lack of understanding about the personal and tailored experience the consumer is looking for.

This lack of understanding is not new and was highlighted back in 2021 by NTT’s Global Customer Experience Benchmarking Report, which found that “organizations and consumers have different views of what personalization means.” According to the report, consumers say that personalization is “not about how well the organization knows them, but how well the organization is listening to them, and how efficiently and effectively they respond to needs.”

Dhingra illustrated what this could look like, in practice, via a personal example when he said, “I’m a frequent flyer with one of the airlines here in the US. When I call them, I expect them to know who I am, to know that I typically fly out of San Francisco airport, to know what meal I typically order and that I typically don’t check a bag, so when I’m interacting with an agent, whether a virtual agent or a human agent, I expect them to know all of these things and then anticipate what I might be calling about.”

The problem, however, Dhingra suggests, is that many brands don’t have the right infrastructure, processes or people in place to deliver that type of personalized experience.

The third factor was that implementing AI solutions is often a knee-jerk reaction without first addressing the “why” and “to what end”.

This factor was the one that I found the most interesting, as it seems like there is a lot of “knee-jerking” going on at the moment.

Too often, I hear stories about executives approaching vendors wanting to implement an AI or generative AI solution because it feels like the thing to do.

This is reflected in Cisco’s own research, which finds that 95% of contact center leaders believe that AI is key to improving the customer experience, and 52% of them report that they will be dedicating 20% of their budget to it for the upcoming year.

Those figures are staggering, particularly the budget ones. If you think about the economics of a contact center, 20% equates to pretty much all of the discretionary budget of the average contact center.

Doesn’t that feel a bit knee-jerk?

Now, there is little doubt that leveraging AI will transform the contact center, and has the potential to transform the customer’s experience as a whole.

But it’s not magic.

If brands want to make their investments count, they must start by addressing the “why” and “to what end”.

But also they shouldn’t stop there.

The Achilles heel of many brands’ customer experience and service aspirations is that they haven’t really imagined at a granular enough level what sort of experience they want to deliver across their different groups of customers and their respective journeys and what the human and technology balance should be at each touchpoint on the journey.

Only when they achieve that level of understanding will they gain the clarity needed to tackle Dhingra’s three factors in a way that makes sense for both their customers and their brand.

Credit: Image by MaxAce from Pixabay

This post was originally published on Forbes.com.