CX News
U.S. consumer satisfaction drops for third straight quarter
The American Consumer Satisfaction index reports that consumer satisfaction continues to fall. While it’s far above where it stood at a low in 2022, the organization’s own headline is pretty dire:
The disconnect signals growing seller power, weakened market competition, and rising consumer prices. Experts warn this imbalance may harm long-term economic health. In competitive markets, true success comes from earning customer loyalty through better service and value - not extracting it.
CX leaders may be in a tough spot, but this presents a great opportunity especially as you plan holiday campaigns: deliver value via stellar experiences for customers, especially if they are paying higher prices than this time last year.
Work with your cross functional teams. You may not set the prices of products and services, but you can escalate customer feedback about what’s working and what’s not and pay close attention to perceptions of value.
Going above and beyond at this moment in time can help you stand out from the competition and gain critical loyalty from your customers.
Loyalty programs having a moment
As I’ve been reporting on the news lately, loyalty has been a recurring theme - perhaps as a safeguard against recession worries and a way to deliver even better value to the consumers who continually patronize brands. Here are some notable recent tidbits around loyalty programs:
- JetBlue and United are teaming up to launch Blue Sky to provide more flight choices, perks, and ways to earn and use miles.
- Denny’s is launching a point-based loyalty program and expects it will drive between 50 and 100 basis points of traffic
- Sprouts Farmers Market is rolling out a nationwide loyalty program after piloting in Arizona.
- Chipotle’s “Summer of Extras” spurred growth in digital loyalty sign-ups 14% year over year, and they’re gamifying loyalty with their Chipotle IQ test.
Why all the recent developments? Beyond it being a safeguard against a pullback in consumer spending, I see that forward-thinking organizations are investing in them now (or should) because of the rollout of AI. CX teams can shift their customer experience team members’ focus from answering simpler support questions to working on broader initiatives that drive loyalty.
OpenAI’s GPT-5 rollout causes headaches
OpenAI rolled out its latest model, GPT-5, but temporarily removed GPT-4o and GPT-4o mini, causing disruption for customers and their workflows as they dealt with an unexpected and to many, unwelcome change. There are even hashtags - #BringBackGPT4o and #forever4o with users proclaiming their affinity for LLMs.
It’s a lesson: don’t force customers to adopt new things right off the bat. Even if the product is better in every possible way, customers will remember the sting of inconvenience and disregard for their preferences.
AI News
1) Duolingo CEO admits AI-first motion dampened growth results: it’s a lesson to be mindful of your consumer base’s attitudes before making big changes.
2) The U.S. government gets Claude for $1 per agency per year - a followup from last week’s news how it ended up on a federal vendor list with competitors Google and OpenAI.
3) AI Agents coming to a wardrobe near you: Stitch Fix adds more AI experiences, but stylists aren’t forgotten.
4) Cresta launches AI-augmented customer experience for email, but it’s behind other platforms that were already omnichannel.
The latest at Kustomer
We’re celebrating our 10th birthday (and it’s actually today)!
Check out the blog where our CEO Brad Birnbaum reflects on the early days of Kustomer and the past decade of growth to commemorate the company's tenth trip around the sun.
