The gap between AI’s promise and reality is widening, as pressure to prove ROI on AI mounts
Sydney, Australia – October 8, 2025: New research from Qualtrics’ fifth annual Consumer Experience Trends report reveals that Australians are among the world’s least likely consumers to trust companies to use AI responsibly – just 23% trust organisations compared to 29% globally. Additionally, 58% fear that automated AI interactions will prevent them from being able to connect with a human.
As pressure grows on companies to demonstrate tangible returns from AI investments, the Qualtrics report reveals that efforts to scale service excellence with AI are falling short of expectations. Subpar AI interactions don’t just erode trust, they hit the bottom line. Nearly half (41%) of bad experiences lead Aussies to cut spending, while satisfactory experiences have an outsized impact on loyalty.
“Too many companies are deploying AI to cut costs, not to solve problems, and Aussies know the difference. Australian consumers are no doubt a hard group to win over. Their stark preference for human interactions is a reminder of just how critical human connection is for customer experience.
AI needs to be used to improve service, build connections and enhance the human experience, not replace it. It should empower human agents with the right context and suggested solutions so they can resolve complex customer problems quickly and effectively. But there’s more we need to do to educate Aussies about its value,” said Ivana Papanicolaou, Head of Customer Experience Solution Strategy, ANZ at Qualtrics.
The headline findings from the 2026 Qualtrics Consumer Trends report, draws on insights from over 20,000 consumers across 14 countries – including 1,502 from Australia:
AI-powered customer service is failing, so far: Australians are showing hesitancy to AI adoption – over half (56%), are concerned about misuse of their data if companies use AI in customer interactions.
Survey fatigue leaves businesses guessing about customer churn: Aussies aren’t providing direct feedback: 27% do nothing after a good experience, and 31% do nothing after a bad experience.
Value won’t be enough to secure customer loyalty in 2026: Economic pressures are forcing 29% of Australians to cut spending (vs. 19% globally) – making those who select brands for customer service more satisfied and trusting, compared with consumers who base purchasing decisions purely on value.
Consumers demand transparency over personalisation: 61% of Aussies want to buy from brands that tailor their experience to their individual needs and wants, but only 36% of Australians believe the benefits of personalisation are worth the privacy trade-offs.
AI-powered customer service is failing, so far:
The report signifies that Aussies are sceptical of AI – let alone its ability to enhance customer experience. 51% of the country prefer meeting in person or speaking on the phone to complete 8 common activities, rather than engaging with other channels like an AI assistant or live chat.
Survey fatigue leaves businesses guessing about customer churn:
At a time when businesses need insights the most, consumers are staying silent: Almost a third (31%) of respondents stay silent after very bad experiences (same as 2025) – but 27% don’t share their very good ones either. This leaves business leaders in the dark about changing consumer behaviours or the reasons behind churn, making issues even harder to address. It’s not just Aussies, it’s a global trend, with 30% failing to provide any direct feedback after a bad (30%) or good (25%) experience. This issue is 1 compounded by the finding that communication problems are a top reason (42%) Australian consumers say their experience was bad.
While traditional feedback may be declining, customers are still sharing opinions across other channels – calls, chats, reviews, and social media. Successful businesses will connect these scattered signals to understand sentiment, even when it’s not explicitly stated.
“When consumers don’t share their experiences, organisations lose a really valuable source of intel. Silence isn’t apathy, it’s abandonment, and so leaders need to be connecting data across – experience, operational and behavioural – to uncover insights, solve problems and address customer pain points, in lieu of verbal and more direct feedback,” Papanicolaou said.
Value won’t be enough to secure customer loyalty in 2026:
Australia and New Zealand stand out as the most price sensitive markets globally, with 29% of Australian consumers reducing spending this year amid economic uncertainty.
While price and convenience influence initial decisions, companies that compete on more than cost are rewarded with long term customer relationships and meaningful connections. Aussies have a 93% satisfaction rate and a 90% trust rate when choosing for good customer service, which is higher than all other drivers.
“Competing on price might win customers in the short term, but differentiation based solely on price is a losing battle. The organisations leading from the front are building customer connections through exceptional experiences that create lasting impressions competitors cannot replicate,” Papanicolaou said.
Consumers demand transparency over personalisation:
Australians increasingly want experiences tailored to their individual needs – 61% want to buy from companies that cater to their individual experiences. However, most don’t believe the benefits justify the privacy cost. Only 37% trust companies to use their personal data responsibly, and 66% worry about the security of their personal data. Fears about fraud or scams (34%) and hacking (29%) top Aussies’ concerns.
The research identifies a clear path forward: transparency and control can rebuild trust. Almost half (46%) of Aussies would share more data if they had greater transparency about what’s being collected, while 44% want better control over usage or deletion.
“This presents both a challenge and an opportunity for organisations: they must show clear, tangible benefits when requesting personal information and stop asking for more information than they need. Transparency when it comes to customer data shouldn’t be optional, there needs to be clarity about how that data is collected and used,” Papanicolaou concluded.
Methodology:
The data comes from a global consumer study conducted by Qualtrics XM Institute in Q3 2025, surveying more than 20,000 consumers across 14 countries: Australia, Brazil, Canada, France, Germany, Japan, Mexico, Netherlands, New Zealand, Singapore, Sweden, UAE, UK, and US. Responses reflect the gender, age, and income demographics within each country. See how Australia compares to 13 other countries. Download the full 2026 Consumer Experience Trends report.
About Qualtrics:
Qualtrics is trusted by thousands of the world’s best organizations to power exceptional customer and employee experiences that build deep human connections, increase customer loyalty, boost employee engagement, and drive business success. Our advanced AI and specialized Experience Agents™ allow businesses and governments to proactively interact with customers and employees in personalized ways across every channel and touchpoint, respond in-the-moment to fix or improve experiences, and stay across the latest market trends and opportunities.
