In Ireland, 87% of customers are now less loyal to brands than they were two years ago. Is the human touch the answer to the AI challenge?
New research indicates a decline in brand loyalty in Ireland.
Digital workflow business ServiceNow’s latest Consumer Voice Report 2024 highlights ever-changing customer expectations and economic instability as the driving factors behind the ongoing decline of brand loyalty.
“Our research shows Irish customers are even more discerning than their counterparts across the EMEA region”
This year’s report shows that 87% of Irish customers are less loyal to brands than two years ago, with nearly four out of 10 now making decisions based on affordability.
However, it recommends a ‘race to the bottom’ mentality is not sustainable for Ireland’s business landscape. In an era where competitive pressures are increasing and customer loyalty keeps decreasing, a focus on customer experience is the answer to sustaining market share and relevance.
Survival of the savviest
To survive, ServiceNow recommends businesses must embrace AI, allowing them to seamlessly integrate technology with human input to enhance customer experience.
“When I speak to customers and business leaders, I always hear one thing – their customers are central to their success,” said Cathy Mauzaize, EMEA president at ServiceNow.
“Yet, ServiceNow’s latest Consumer Voice Report shows that brand loyalty is becoming increasingly difficult to win. Nonetheless, this research makes me optimistic for the role that technology like Gen AI has. Consumers believe that technology is already making a positive impact on customer experience, and it is now a fundamental consideration for all organisations.”
As with the 2023 study, Irish consumers sit atop the tables compared to other nations and EMEA-wide averages:
- Six in 10 customers are now spending more than they did two years ago, with 73% attributing this increase to rising costs. Comparatively, almost half spend more and 65% attribute it to rising costs across EMEA.
- There is a disconnect between what appears important to customers on the surface, and what truly drives loyalty with 80% of Irish consumers saying that sustainability is important when choosing a company to buy from. Whilst in line with 2023’s study (81%) Ireland places more importance on sustainability than Germany (68%), the UK and Switzerland (70%), the Netherlands (73%), France (74%), and Sweden (77%).
- However, 50% of consumers in Ireland versus 39% across EMEA, are less loyal to brands now because they prefer to buy the cheapest option. So, while they value the likes of sustainability when using a company, price point remains an important brand loyalty benchmark.
- Disappointing experiences are increasingly switching consumers off. Coupled with the growing influence of social media (+5 percentage points YoY) and the opinions of friends (+2 percentage points YoY), the battle for brand loyalty shows no signs of stabilising.
AI now: The future has already happened
The report illustrates that human and AI collaboration is important for customer satisfaction. More than a fifth (21%) in Ireland said they actively choose to avoid customer facing AI such as chatbots, yet 90% of Irish consumers also demand a variety of channel options when it comes to customer service. The combination of this growing demand, with a lack of trust in AI, adds a layer of complexity to the customer experience landscape.
Offering a variety of problem resolution channels is an important way to win loyalty, but for businesses to deliver this, a seamless blend of automation and personalised touch is the imperative.
A blend of AI and human-led customer experience can deliver semi-automated yet highly personalised services to meet the needs of today’s consumers.
- 24% of Irish customers use chatbots for basic information, valuing technological efficiency, while 37% choose to go to human support for more complicated issues.
- Some even decide to use technology for all their needs, with 6% going to chatbots for everything and 7% using intelligent search engines to provide the answers.
- However, 38% of Irish customers don’t trust, customer facing AI such as chatbots, so human touch remains an important balance.
Although there is still scepticism, consumers are increasingly more receptive to using AI in customer service – if the human element is not lost. AI should not – and cannot – replace human interaction entirely.
More than a third of Irish consumers also want authentic, human generated answers.
By strategically integrating Generative AI with human expertise, businesses in Ireland can create a seamless and powerful authentic intelligence, ultimately enhancing the customer experience.
- The main factor for Irish customers not embracing AI is that yearning for a genuine human interaction, with nearly four in ten (38%) wanting a genuine apology or answer – not a formulaic response.
- 32% still recognise the irreplaceable value of in-person customer service chats (across email, phone and live chat.)
- Nevertheless, 79% are receptive to some form of generative AI, showing the potential of AI as a tool to give agents’ time for more high-value tasks.
“Brands cannot compete on price alone. It’s far more sustainable for business to focus on the factors, beyond cost, considered most important by customers like robust security practices, fast issue resolution, and efficient customer services,” said Paul Turley, senior director at ServiceNow Ireland.
“In Ireland, this is especially true. Our research shows Irish customers are even more discerning than their counterparts across the EMEA region.”
