KPMG's Global Customer Experience Excellence Research 2023–24 shows that customer satisfaction has fallen across nearly every measured market and metric over the past year. The study aggregates experiences from more than 81,000 customers across 21 countries and examines roughly 3,000 brands to assess changes in customer experience and ways to improve it.
What's behind the decline?
The primary factor identified is the global cost-of-living crisis. Inflation and rising living costs affected purchasing decisions for 97 percent of respondents, and one in four consumers reported being very strongly impacted by price rises.
KPMG notes that while many companies displayed exceptional care during the pandemic — strengthening customer relationships by supporting consumers through unforeseen circumstances — consumers now feel that brands are less partner-like in handling the current crisis. Issues such as slower service caused by price increases or staff shortages are often attributed by customers to individual brands, even though these are frequently the result of broader, systemic forces.
Price sensitivity coexists with value-driven spending
Despite financial pressures, a significant portion of consumers remain willing to pay more for products from companies that share their values: 48 percent said they would pay a premium to ethical firms, while only 7 percent said they do not consider this factor at all.
Technology versus human connection — where companies fall short
Respondents also say that aggressive deployments of technology designed to address labor shortages and cost pressures have contributed to falling satisfaction. Many tech-driven solutions lack empathy and a human tone that customers seek in difficult situations. Consumers expect channels representing their chosen brands to align with their personality, style and values — not just deliver automated answers.
The six pillars of customer experience
KPMG evaluates customer experience across six pillars: honesty (trust-building), managing expectations, time and effort, personalization, empathy and handling negative experiences. Although average scores dropped across all six pillars this year, personalization remains the most important driver of loyalty. Personalization goes beyond customized content or product offers; it creates a feeling that the customer is valued, important and unique.
Artificial intelligence can play a significant role here: by using customer data and behavioral patterns to create tailored experiences, AI can help convert one-time buyers into repeat customers. At the same time, AI can worsen the customer experience if implemented without care. KPMG recalls that in the 2023 KPMG CEO Outlook, 7 out of 10 executives identified AI as a top investment priority, largely focused on customer service.
Trust, transparency and ethics around AI
AI adoption most directly affects the honesty/trust-building pillar. Its use raises a set of new considerations: transparency, data protection and ethical usage must be emphasized. Halász Erika, head of the Strategy and Operational Efficiency business advisory area at KPMG, warned that AI solves only part of the problem and can backfire from a customer-experience perspective if applied poorly.
Citing IDC, the report notes that each dollar invested in AI returns an average of $3.50, while the top 5 percent of companies can see returns of up to $8. Such prospects may tempt firms to roll out AI rapidly for business reasons alone, but brands have a responsibility to ensure AI-derived benefits are perceived as valuable by customers, otherwise trust can evaporate.
Where AI helps and where it risks damaging experience
Consumers feel companies have not been consistently proactive or effective in resolving customer problems recently. AI can improve efficiency and reduce customer effort, but it is costly, must be accepted by customers, and requires human oversight. KPMG stresses the need to identify which touchpoints require genuine human-to-human interaction and which can be supported by automation.
Empathy — understanding a customer's situation and perspective — remains essential for deeper relationships. While promising AI-driven empathy tools exist, technology should augment, not replace, real human interactions in delivering excellent customer experience.
Conclusion
KPMG's research indicates that the decline in customer satisfaction is driven largely by macroeconomic pressures, especially inflation and rising living costs, while the ways companies adopt new technologies, particularly AI, influence trust and emotional connection with brands. Firms must balance efficient, ethical use of technology with preserving personal, human interactions where they matter most to customers.
