Insights
From bold bets to back-tracking: What AI missteps are teaching us about CX
We’ve said it before, and we’ll say it again: AI is an augmenter, not (yet) a human replacement.
Recently, there has been a surge of bold declarations from high-profile companies around artificial intelligence. Some have announced sweeping changes to how they work – halting new hires, or restructuring entire teams – all in the name of embracing AI. The rationale is clear: AI promises efficiency, scale, and innovation at a fraction of the cost.
But there’s a growing cautionary tale in these stories.
‘Buy now, pay later’ giant Klarna has back-pedaled on a decision to champion their chatbot over human agents. Now, they’re recalibrating to a more balanced approach: letting chatbots handle routine queries, while rehiring customer service agents to be on hand for more complex enquiries.
“From a brand perspective, a company perspective, I just think it’s so critical that you are clear to your customer that there will be always a human if you want,” said Sebastian Siemiatkowski, CEO.
A month ago, leading language-learning app Duolingo took a bold stance on going ‘AI-first’, citing that it would ‘stop using contractors to do work that AI can handle’. Amid widespread backlash from customers and internal anxiety from its employees, the company has softened its stance.
“To be clear: I do not see AI as replacing what our employees do (we are in fact continuing to hire at the same speed as before),” wrote Luis von Ahn, CEO of Duolingo in a recent LinkedIn update.
In both these cases, the reactions weren’t just noise; they were a signal. And in both cases, the companies walked back parts of their original AI stance.
This ebb and flow – grand AI plans followed by public criticism and corporate back-tracking – is becoming a pattern that should give other companies pause.
It’s time for an AI reality check
AI can do remarkable things; summarize complex conversations, generate personalized content, and simulate interactions. But it is not infallible. It still hallucinates. It still misses context. It still makes mistakes that a seasoned professional or empathetic human simply wouldn’t.
To treat it as a direct replacement for people is not only premature – it risks damaging your brand.
We’re in the experimental phase of AI adoption, where technology is evolving quickly, but human trust evolves slowly. That makes this a dangerous time to overpromise and underdeliver.
Customers don’t want to be experiments
For all its capabilities, AI cannot replicate the nuance of a human conversation – particularly in emotionally sensitive or high-stakes contexts. In industries like financial services, healthcare, or travel, a great customer experience isn’t just a nice-to-have; it’s core to reputation, compliance, and loyalty.
When customers feel they’re talking to a bot, especially one that’s not quite ready for prime time, it erodes trust. And when companies chase cost-cutting at the expense of experience, that erosion spreads fast. In fact, according to a survey by Gartner, 64% of customers would prefer that companies didn’t use artificial intelligence (AI) in their customer service at all.
Public perception matters, and AI strategy can’t live in an engineering vacuum. It must be built with the customer journey in mind, with transparency and empathy at its core.
Focus on empowering, not replacing
There appears to be a race for companies to go ‘AI-first’ before their competitors in order to make the biggest gains (that is, cost savings).
But we predict that the companies who will win with AI won’t be the ones who make the biggest cuts, first. Rather, the winners will be the ones who apply AI as a strategic layer; as an augmenter of human capability, not a substitute for it.
That means using AI to support frontline teams, not replace them. To reduce the repetitive and administrative burden, so people can focus on the interactions that matter most. To deliver smarter insights, faster – all while keeping humans in the loop to steer, sense-check, and respond with care.
This ‘human-plus-machine’ approach is not only more sustainable, it’s more aligned with customer expectations. People want better service, not colder service. They want speed, but not at the expense of empathy.
Build an AI a strategy that lasts
It’s an incredible time for innovation, but companies must avoid the temptation to yo-yo on their customer experience strategy and how tech influences it. Swinging wildly from enthusiasm to retreat not only creates confusion for customers, but instability for employees and questions for investors.
Instead, brands need a clear, principled stance: one that recognizes AI as the powerful tool that it is, but not a silver bullet. You need to evolve with the tech, of course, but it’s also vital to stay grounded in what customers value: human connection, empathy and trust.
Companies that remember that, and take their customers on the journey with them, will be the ones who enjoy the competitive advantage.
