Customer Insights Series

Is AI Adding Value to the Customer Experience—or Taking It Away?

Red key with an attached tag displaying HOTEL LORELAI in bold text hanging from a keyring.
Red key with an attached tag displaying HOTEL LORELAI in bold text hanging from a keyring.

AI is the new front desk

AI isn't an experimental side channel anymore. With 63% of all customer service interactions expected to be performed by AI by 2027, AI is quickly becoming the customer experience. 

But as brands automate more of the customer journey, there’s one question efficiency dashboards can’t answer: Do customers actually feel valued by the experience? Or does automation leave them feeling like efficiency matters more than service?

Right now, consumers are split. 41% say interacting with AI instead of a person makes them feel efficient and empowered. But nearly as many (37%) walk away feeling frustrated and undervalued.

For decades, strong customer service has been built around the same basic principles as great hospitality: recognize the guest, understand and anticipate their needs, respect their time, and make getting help feel effortless. AI doesn't change that standard. If anything, putting technology between a customer and a brand raises the stakes.

AI may be taking over the front desk, but the standard for great service hasn’t changed. Here’s how to roll out the red carpet for every customer — regardless of whether there’s a human or an AI agent on the other side.

Hand pressing a red bell with musical notes indicating sound
Hand pressing a red bell with musical notes indicating sound
Cartoon robot receptionist sitting at a desk labeled Hotel Lorelai with computer and office supplies.
Cartoon robot receptionist sitting at a desk labeled Hotel Lorelai with computer and office supplies.

Service looks different from the other side of the desk

Most brands believe their AI experiences are already delivering five-star service. But the guest reviews tell a different story. While 86% of brands believe customers are satisfied with their AI-powered service, only 51% of consumers agree. That’s a 35-point perception gap.

Part of the problem may be how success is being measured. Brands understandably look at operational benefits like faster resolution times, decreased ticket quantity, lower service costs, and around-the-clock availability. Those metrics matter, but they don't necessarily tell you how the experience felt on the other side of the interaction.

Customers are asking a much simpler question:
Did this interaction make my life easier — or did it make me feel like the company didn't want to deal with me?

That distinction becomes especially important as AI takes on a larger share of customer interactions. When AI becomes the face of your brand, it doesn’t just shape the customer experience. It shapes the customer relationship.

Hotel brand rating of 5 stars with a positive review, guest review of 3 stars with a lukewarm comment.
Hotel brand rating of 5 stars with a positive review, guest review of 3 stars with a lukewarm comment.

84% of brands believe they’re good at providing positive customer engagement.

Customers aren’t anti AI. They’re anti bad service.

The good news: Using AI doesn't automatically make customers feel less important. 55% of global consumers say that as long as AI is smart enough to help them, they still feel valued by the company using it.  But the reverse is also true: 64% say dumb or faulty AI makes them feel undervalued as a customer.

Luckily, attitudes are improving. Nearly two-thirds (64%) say the AI bots they interact with have gotten better over the past year, while 34% are more likely to choose an AI chatbot over a human for customer service than they were a year ago.

The takeaway? Customers aren't judging brands for using AI. They're judging how well that AI serves them. They don't necessarily care who — or what — is on the other end of the interaction, as long as it understands what they need and can actually help.

Red door marked 304 with a Do Not Disturb sign reading WITH BAD AI
Red door marked 304 with a Do Not Disturb sign reading WITH BAD AI

Don't make customers carry their own bags

The quickest way to make customers feel undervalued? Put them to work.

AI is supposed to make life easier. But when it fails, it can do the opposite, shifting the burden of customer service from the brand back onto the customer.

Suddenly, customers are the ones doing the heavy lifting, having to:

  • Explain themselves repeatedly

  • Correct inaccurate information

  • Find a workaround when the bot can't handle an exception

  • Sit through endless unhelpful loops

  • Hunt for a way reach a human

These aren't just technology problems. They're signals about whose time the experience was designed to protect. The moment AI becomes more work for the customer, it stops feeling like service.

Cartoon person pulling two suitcases, wearing red clothes and a red hat.
Cartoon person pulling two suitcases, wearing red clothes and a red hat.

74% of consumers say they have to repeat themselves to AI assistants at least some of the time.

How to make your customers feel like VIPs

So, what separates a five-star AI experience from one that leaves customers wishing they'd asked for a human?

It comes down to whether AI can deliver on the fundamentals of great service: respecting customers' time, recognizing them, and solving their problems quickly and efficiently.

Red and white robot holding and pulling luggage on a black background
Red and white robot holding and pulling luggage on a black background

Great hospitality doesn't make guests wait around wondering when someone will help them, and AI shouldn't either. Its always-on availability and ability to serve many customers simultaneously means support can be there the moment someone needs it — no waiting until normal business hours, tolerating bad hold music, or standing in long queues required.

And customers are noticing the difference: 81% say AI agents save them time, estimating they save an average of 82 seconds per interaction. 

Knowing a customer's name isn't the same as actually knowing them. Great service comes from understanding who someone is, what they prefer, and what brought them to you—no matter how many channels they hop across.

Because customer journeys rarely happen in one place, someone might start with an AI agent over chat, follow up by text, and finish on a call with a live representative.

With the Twilio Conversations Layer, you give both AI and human agents the real-time, context-aware memory to pick up right where the last interaction left off. This unlocks a single continuous dialogue that eliminates repetition and makes every customer feel recognized.

Customers don't just want AI to answer questions. They want it to take action — whether that's updating an order, resetting a password, changing a reservation, or issuing a refund. Anything to make their lives easier. 

Powered by the Conversations Layer, Twilio Conversational AI allows companies to connect their AI agents to Twilio’s AI infrastructure and channels. That helps brands move beyond static Q&A to understand true intent and execute complex workflows directly on a customer's behalf.

And many brands are already delivering on these expectations, as 67% of consumers say AI can fully resolve their issues without human intervention at least half the time. Keep improving your AI systems and that share can grow, turning more frustrated customers into friendly advocates.

What five-star AI service looks like

As AI capabilities mature, brands don't have to jump from a simple chatbot straight to fully autonomous, proactive customer service. Think of AI sophistication as a progression toward five-star service:

★ AI answers
 AI can handle FAQs and other straightforward informational requests accurately and reliably.

★★ AI recognizes
 AI knows who your customers are and can draw on relevant history and preferences.

★★★ AI resolves
 AI moves beyond answering questions to autonomously completing common tasks and solving basic customer issues.

★★★★ AI orchestrates
 AI carries context across channels, systems, AI agents, and human agents so the customer can pick up right where they left off.

★★★★★ AI anticipates
 The five-star future: AI that anticipates customer needs and proactively takes action before they ever have to ask.
 

Brands are racing to automate more customer interactions. But the winners won't necessarily be the brands that automate the most. They'll be the ones that use AI to make being a customer easier.

The goal of AI shouldn't be to minimize the amount of effort your brand spends on each customer. It should be to minimize the amount of effort each customer spends on your brand.

Illustration of a red hotel named Lorelai with stars and clouds in the background.
Illustration of a red hotel named Lorelai with stars and clouds in the background.

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