Bad CX could cost companies $3.8 trillion in 2025
How poor customer experiences and AI missteps could cost businesses billions in 2025
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Companies that fail to meet sky-rocketing customer experience (CX) demands risk significant financial losses — potentially totaling US$3.8 trillion globally in 2025, according to the 2025 Consumer Experience Trends report by Qualtrics.
The study, which drew insights from nearly 24,000 consumers across 23 countries, reveals that while the frequency of poor experiences may be declining, the consequences of even a single misstep are becoming increasingly severe.
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Declining loyalty and high expectations
The sharp decline in consumer loyalty was one of the standout trends from the report. Qualtrics highlights that despite reporting fewer negative experiences, consumers are quicker to reduce spending or switch brands after a single poor interaction.
Isabelle Zdatny, a customer loyalty researcher at Qualtrics, emphasizes this shift: “Consumers know what is possible and they are ready and willing to look for alternatives if companies don’t keep up.”
Critical industries such as public utilities, banks and hospitals face heightened scrutiny. Although consumers may tolerate poor experiences in these sectors due to necessity, industries providing discretionary goods and services — like airlines, hotels and retail — have less room for error. As competition stiffens, even minor lapses can lead to significant churn, contributing to the huge potential losses.
Silent dissatisfaction
Adding to the challenge is a sharp drop in consumer feedback. Compared to 2021, there has been an 8-point decline in the likelihood of consumers reporting bad experiences and a 7-point drop in sharing positive experiences. This silent dissatisfaction leaves businesses with fewer insights to address shortcomings.
“In a world full of surveys, people are increasingly less willing to answer them, leaving businesses with little to work with,” Zdatny says.
This trend highlights the need for companies to develop more sophisticated listening tools, utulizing indirect signals and advanced analytics to stay attuned to customer sentiment.
Can AI combat bad CX?
To combat this, artificial intelligence (AI) is increasingly becoming a more popular tool that companies use to ensure they deliver good CX, for example through marketing, hyper-personalization, chatbots and virtual assistants.
As stated in CX Network’s Global State of CX 2024 report, 28 percent of respondents record a positive impact on customer loyalty through their use of generative AI for CX, while 39 percent said they had recorded a positive impact on company profits. However, the Qualtrics report reveals that only 26 percent of consumers trust organizations to use AI responsibly. Additionally, more than half of consumers (51 percent) express concerns about the absence of human interaction in AI-driven customer service.
While nearly half of respondents (46 percent) are open to AI in specific contexts, there is a clear trust gap that businesses must address. As Zdatny explains: “Companies are more excited than consumers are about using AI for customer interactions. They will have to work to persuade their customers that AI offers a benefit to both parties.”
American Express is an interesting example of a company which has utilized AI to significantly enhance customer experience while maintaining trust. By implementing AI-driven chatbots and predictive analytics, American Express has been able to resolve up to 60 percent of common customer inquiries without human intervention, reducing wait times by 40 percent.
Importantly, the company has maintained transparency by clearly informing customers when AI is used and ensuring a seamless transition to human agents for complex issues. This balanced approach has led to an impressive 25 percent increase in customer satisfaction scores and contributed to stronger loyalty across their user base.
Balancing personalization and privacy
The demand for personalized experiences is another critical factor driving consumer decisions. According to the report, 64 percent of consumers prefer brands that tailor their services to individual needs. However, this desire is tempered by privacy concerns. Only 27 percent of consumers are comfortable with companies using unsolicited data for personalization.
The paradox highlights a difficult balancing act for businesses: delivering the customization consumers crave without overstepping boundaries. Companies that earn consumer trust by transparently handling data and providing clear value from personalization efforts are more likely to succeed.
“Following through on basic commitments carries the most weight with customers. It’s dangerous to assume that existing customers will stay loyal without intentional effort to keep them,” Zdatny comments.
Companies that fail to prioritize trust, listen closely to consumers through advanced feedback mechanisms and tread carefully with AI and data-driven personalization risk alienating their customer base and facing steep financial repercussions, contributing to the estimated $3.8 trillion in potential global losses.
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