Zoom-commissioned research shows Australian customers less trusting of AI than other regions, preferring human agents for data security concerns.
What’s happening: A Zoom-commissioned study of 3,509 consumers across seven countries reveals Australian customers are more frustrated with AI customer service than other regions, with 51% reporting bots fail to resolve their issues.
Why this matters: With 86% of Australian respondents likely to abandon brands over unresolved support queries and 77% sharing negative experiences through word of mouth, businesses face serious reputational and revenue risks from poorly implemented AI customer service.
Australian businesses banking on AI to revolutionise customer service may need to reconsider their approach, with new research revealing local consumers are among the world’s most sceptical about automated support systems.
The Zoom-commissioned study by Morning Consult surveyed 3,509 consumers across seven countries and found more than half (51%) of Australians reported frustration with customer service bots’ inability to resolve their issues, higher than counterparts in the UK and Germany.
Resolution trumps technology
The research, titled “AI alone won’t save CX. Resolution will,” identified a critical disconnect between what businesses promise and what customers experience. While companies rush to deploy AI solutions, Australian consumers care less about the technology and more about outcomes.
“When asked what they thought was important when it comes to customer support, a smaller number of Australian respondents selected speaking to a human compared to factors like speed, knowledge of agents and satisfactory resolution,” the study found.
The stakes couldn’t be higher. The research revealed 86% of Australian respondents said they were likely to stop purchasing from a brand if customer support failed to resolve their queries.
“Our customer experience research found Aussies were most frustrated (51%) with the resolution capabilities of customer service bots, even more so than those in the UK and Germany,” said Bede Hackney, Head of Zoom, ANZ. “It’s crucial that businesses get this right by investing in fit-for-purpose and secure solutions, especially with the majority (86%) agreeing they were likely to abandon a brand if they can’t get a resolution.”
The ripple effects extend beyond individual transactions. With 77% of Australian consumers sharing negative experiences via word of mouth, failed customer service interactions can damage brand reputation far beyond the initial complaint.
Generational loyalty shifts
The research uncovered striking differences in how generations approach brand loyalty, with implications for long-term customer retention strategies.
Baby Boomers demonstrate the strongest brand commitment, with 60% sticking with brands they trust for more than a decade. Gen X follows closely at 61%, while Millennials drop significantly to 45% and Gen Z plummets to just 25%.
However, younger consumers show more tolerance for single missteps. Only 13% of Gen Z would abandon a brand after one poor customer service experience, compared to 21% of Gen X. But after a second negative encounter, the generational gap narrows dramatically, with 42% of Gen Z and 40% of Gen X willing to sever ties.
“Across the countries we surveyed, we found that older generations are more loyal to brands they like. However, as generations progress, there’s a sharp decline in brand loyalty. That said, Gen Z is more forgiving when brands mess up,” Hackney explained.
Security concerns persist
Privacy and data security emerged as paramount concerns for Australian consumers, with 91% rating these issues as “very” or “somewhat” important when engaging with customer service.
The research revealed a significant trust gap between human and AI agents. More than half (59%) of Australian respondents expected human customer service agents to perform better on data security, while only 14% believed virtual agents would excel in this area.
“Privacy concerns typically increase with the amount of information that’s required to be shared in a customer service interaction,” Hackney noted. “Designing streamlined customer journeys and delivering rapid resolution helps ease those concerns and build loyalty and trust.”
AI falls short
Despite widespread deployment of AI customer service tools, the technology consistently underperforms against customer expectations across key metrics.
While 86% of Australian consumers expect AI systems to escalate complex issues to human agents when necessary, only 38% report experiencing this regularly. Similarly, just 25% of respondents say businesses consistently use AI to remember past interactions, despite 76% expecting this capability.
The gap widens further when examining AI’s predictive abilities. Only 28% of Australian customers report AI systems anticipating their needs or issues, falling dramatically short of the 74% who expect this functionality.
“Businesses that leverage smart AI agents and sophisticated CX solutions that are truly engineered to solve customer issues, can minimise wait times, maximise response accuracy, and resolve common questions,” said Lukas Carruthers, Head of CX for APAC, Zoom.
The solution lies not in abandoning AI but in better integration with human support systems.
“While some AI solutions can handle common and repetitive queries easily, for more complex issues, it’s essential the tech can integrate smoothly with human agents, with full context and history, so customers don’t have to repeat themselves,” Carruthers explained. “With the right systems in place, agents can respond faster, collaborate in real time, and resolve issues more efficiently, leaving a lasting positive impression on the customer.”
The research demonstrates that successful customer service strategies must prioritise problem resolution over technological sophistication, with AI serving as a tool to enhance rather than replace human capability.
For Australian businesses, the message is clear: customers will embrace AI-powered support systems, but only if they deliver the outcomes that matter most – fast, effective problem resolution with robust privacy protection.
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