For too long, business leaders have viewed customer experience (CX) as a cost center. It’s time to flip the narrative. Quality CX drives revenue.

Real-world results validate the connection between customer service and success. Ally Financial attributed its 95% customer retention rate to its CX, and Bank of America credited CX improvements for significant organic growth.

What are these companies doing right? They recognize that customer service requires more than just access to a 1-800 number or a rigid chatbot. Good CX is about building relationships bigger than business, which means moving beyond fielding complaints and requests to proactively initiating conversations that benefit the customer.

Businesses that deliver good customer service can capitalize on a significant market opportunity. The ACA 2024 State of Customer Service and CX report found that 85% of customers will go out of their way to do business with a company providing better customer service, and nearly 80% will switch to a competitor for a better CX.

Transforming CX from a cost center to a revenue driver requires prioritizing the customer’s needs.

The Outdated View of Customer Experience

Many companies approach customer service as a necessary expense to handle customer questions and problems.

It started with the 1-800 number. Call centers require a legion of human agents to run, and even still, customers face long wait times and frustrating handoffs. With the rise of what I call Fear of Reaching Out (FORO), these experiences have become even more negative.

According to a Zingly survey, 71% of people find customer service interactions as stressful or more stressful than their original problem. If someone is picking up the phone to call customer service, something has gone wrong. Starting from a place of conflict undermines opportunities to build meaningful connections with customers. As a result, human-only call centers can be expensive and unproductive.

Many companies have adopted rules-based chatbots in an attempt to improve CX and reduce human capital costs. These tools are a significant advancement but not a magic solution. The ACA report cited above found that 63% of customers have stopped doing business with a company because they couldn’t reach a human agent, and only 27% think self-service or automated support can match the quality delivered by humans. On the flip side, a quarter of customers have stopped doing business due to a lack of self-service options.

So what does this mean? Companies must find the ideal mix of human and AI interactions. The key lies in leveraging advanced AI to deliver scaled, personalized experiences while preserving the human touch when it matters most. Perfecting this formula is the recipe for transforming CX into a revenue driver.

Marketing Technology News: MarTech Interview with Meghann York, Global Head of Product Marketing @ SAP

Scaling Personalized Experiences

Just as we naturally gravitate toward friends who remember our birthday and our pet’s name, customers respond to businesses that treat them like a familiar face rather than just another transaction. According to the ACA, 8 in 10 customers prefer companies that offer a personalized experience.

Many contact centers are overwhelmed with incoming requests, making tailored, proactive outreach a pipedream. How can businesses overcome this hurdle? Automation.

You don’t need a live agent to provide an order status or account balance. AI-powered automation can handle these and other routine inquiries, streamlining the customer experience and preventing people from having to make the dreaded phone call. Self-service capabilities also allow human agents to focus on more high-value conversations.

Personalization requires moving beyond standard chatbots that give pre-programmed responses. AI built on Retrieval-Augmented Generation (RAG) and integrated with a company’s systems can leverage real-time and historical customer data (including purchase history, past interactions and preferences) to provide contextual, relevant answers instead of generic replies. The algorithm does not access the open web, which mitigates hallucinations. ​These AI-powered interactions evolve with each engagement. Customers appreciate this personalization; 77% of people surveyed by Zingly value companies remembering their history.

AI also enables companies to predict needs and proactively engage with customers. For example, an AI solution could send a payment reminder, extend an invite to a special event or alert a customer when a previously viewed item goes on sale.

Agentic AI — which autonomously makes decisions and takes actions rather than following fixed scripts — enhances the interaction by engaging in conversation and dynamically adjusting its approach based on customer responses. The technology doesn’t just respond to inquiries; it takes action like a human would, making interactions feel seamless and personal.​

In the sale example, instead of just notifying a customer about a price drop, agentic AI tools might ask if they’re still interested, offer personalized styling recommendations based on past purchases or provide an exclusive discount. The platform learns from each customer interaction, refining its responses and delivering increasingly tailored interactions.

Agentic AI is designed to recognize context, complexity and customer sentiment in real-time, ensuring that human agents step in at the right moment. These solutions can seamlessly bring in an agent when it identifies frustration, a VIP customer or situations that require human discretion. Customers get the specialized attention they crave without having to start an interaction over.

AI-driven automation allows businesses to scale personalized engagement across millions of customers — something impossible to achieve with human agents alone. This approach reduces the cost per interaction while seamlessly shifting touchpoints from solving customer issues to offering relevant product recommendations or upsells​.

Assessing AI’s Impact

The ideal combination of AI and humans will vary for each company. Leaders must continuously assess the impact of their strategy. True success lies in balancing three critical pillars: reducing costs, increasing revenue (through acquisition and wallet share) and boosting Customer Satisfaction (CSAT) scores.

If automation drives profitability but reduces CSAT, it signals that short-term financial gains may come at the expense of customer loyalty and expansion. To ensure sustainable growth, revenue and CSAT must rise while costs decrease.

Tracking real-time customer sentiment post-interaction is key. This requires a shift from periodic CSAT reviews to continuous monitoring to ensure AI continues to enhance, rather than degrade, the customer experience. In other words, the more automation implemented, the more consistently you’ll need to monitor the system.

Selling CX Short

Executives have been selling the CX function short. Treating it only as a cost center risks frustrating and alienating customers. People will gravitate toward brands that offer more personalized, human-like experiences. Approaching CX as a way to build relationships empowers companies to create positive experiences, foster loyalty and drive long-term revenue growth.

Marketing Technology News: EGC will Humanize Businesses and Unlock Growth in 2025