For more than a decade now, customer experience has been central to many brands’ strategies as a strategic and competitive differentiator. As a result, you will often hear brands talk about being customer-centric, customer-focused, or even customer-obsessed.

Brands often use one or more of these statements as a signal that delivering a great customer experience is important to them. However, despite these statements, many brands are not getting it right and are not meeting customer expectations. Research from Forrester and the UK’s Institute of Customer Service (ICS) finds that customers are generally not happy with their experiences with brands, and their perception is that the quality of the experiences that they are receiving has fallen to levels not seen since 2015/16.

I would query whether, in fact, CX quality has fallen, but I would rather suggest that while brands are endeavouring to deliver great experiences, customer expectations are outpacing their ability to keep up.

One reason for this is that while brands say they are listening to their customers, evidence suggests that they aren’t.

Take, for example, personalisation.

Back in 2018, research by Evergage (subsequently acquired by Salesforce in 2020) found that 98% of marketers agreed that delivering a personalised experience positively impacts customer relationships, resulting in increased engagement and increased conversion rates.

Moreover, around the same time, Forrester found that 75% of consumers expect a personalised experience. However, the same piece of research found that 49% of consumers had data and privacy concerns and that those numbers were rising year on year.

In addition, InMoment’s 2018 CX Trends Report captured how consumers felt about brands’ data collection and use practices, finding that 75% of consumers thought that most personalisation efforts are, at the very least, rated as being ‘somewhat creepy’.

But, the most frightening insight from that same piece of research was that, despite consumer concerns, 40% of brands admitted to finding elements of their own marketing efforts ‘creepy’.

So, taking all of this into account, it’s safe to conclude that while consumers and brands broadly agreed on the value and importance of personalisation, many marketers were guilty of not taking their customers’ concerns about privacy and data collection into account.

Fast forward to now, and the situation does not show much signs of improving.

For example, Qualtrics recently published their 2025 CX Trends, which surveyed nearly 24,000 consumers from 23 different countries around the world. Their research found that almost two-thirds (64%) of customers prefer to buy from companies when their experience is tailored to their specific needs. However, they also found that 73% of consumers are uncomfortable with organisations using unsolicited data for personalisation, and only a third trust the companies they’ve shared personal information with to use it responsibly.

Isabelle Zdatny, Head of Thought Leadership, XM Institute at Qualtrics, commented on the research: “companies are in a tough spot. Consumers want personalised experiences, but give less feedback than ever and don’t want to share their data. Businesses must find a way to gain their customers’ trust, so they can meet consumer expectations without overstepping and turning them away instead.”

Now, there are two obvious differences between 2018 and now.

The first is that the world went through a global pandemic in 2020 and the following couple of years, which drove a massive shift to digital and online sales. Given the lockdown restrictions that were in place, it was no surprise that customers flocked online to source the products and services that they wanted. Much of that behaviour stuck as we emerged from the pandemic and its restrictions.

Secondly, over the last couple of years, we have seen generative AI explode onto the scene with the emergence of ChatGPT in late 2022. Since then, consumers have come to understand the power and potential that generative AI offers, with nearly three-quarters (73%) of UK consumers reporting that they have used generative AI in their personal lives.

But, they are also increasingly concerned, with only a quarter (26%) reporting that they trust organisations to use AI responsibly, which is 11% down from the previous year.

So, what’s going on? What’s at the heart of the problem?

Research from NTT’s 2021 Global Customer Experience Benchmarking Report provides some clues. Their report found that “organisations and consumers have different views of what personalisation means”, with consumers saying that personalisation is “not about how well the organisation knows them, but how well the organisation is listening to them, and how efficiently and effectively they respond to needs.”

The NTT report goes on to say that “Consumers are more interested in being able to choose how they engage with organisations – and having those choices respected – than receiving what organisations think are helpful reminders, or proactive offerings in an attempt to upsell or cross-sell to them. They’re also wary about sharing personal data so companies can send them personalised information.”

This suggests that while brands might talk about being customer-centric, focused, or obsessed and that they want to deliver a personalised experience for their customers, they have not established a clear value exchange between them and their customers vis-a-vis their data.

Now, while the advent of generative AI and all of its AI cousins is presenting all sorts of possibilities to brands to help super-charge their service and experience efforts, from a customer’s perspective, it is clear there is no established value exchange between customers and brands, particularly when you take into account the fact that customers have been raising similar concerns for the last eight years.

In fact, I would suggest that there is a deficit of trust between brands and their customers not only regarding the collection and use of their data but also regarding the use of AI.

This is backed up by the Qualtrics 2025 CX Trends report, which suggests that brands would be best suited to going back to the basics to(re)establish trust between them and their customers and “rather than focus(ing) on the next best thing, you need to get the basic elements of an experience right to build rock solid foundations with those you serve.”

Consumer Priorities When Interacting With Companies

Source: Qualtrics 2025 Trends Report

Going back to the basics and leveraging AI, where appropriate, to facilitate that would allow brands to establish a true value exchange between them and their customers.

This would then allow them to build a foundation of trust with their customers that could be built on and expanded over time, allowing for an expanded value exchange to be developed where customers are clear about what they will receive in exchange for their data.

With customers becoming increasingly intolerant of poor experiences, including those that make it difficult for customers to achieve their jobs to be done or those that don’t respect their data and privacy preferences, this type of approach is likely to become increasingly prevalent amongst those brands that truly are customer-centric, customer-focused, customer-obsessed or all of the above.

Key takeaways:

1. Customers have real concerns about data, privacy, and the use of AI, and these concerns are growing year on year.

2. Customers have been voicing these concerns for years, creating a trust deficit between brands and their customers.

3. Brands need to acknowledge these concerns and rebalance their personalisation efforts away from purely marketing and growth-focused initiatives towards better understanding their customers and responding to their needs.

4. Brands also need to use clear, simple and plain language to describe what data they are collecting about their customers, why they are collecting it, how they will use it, how they will protect it and how it will benefit their customers if they are to establish a genuine value exchange between them and their customers and set the stage for the establishment of a foundation of trust.

This article was originally published on the Optima Partners website.

Credit: Photo by Priscilla Du Preez 🇨🇦 on Unsplash