AI is ready for CX, but capabilities outpace business adoption

The AI race in customer experience software is creating an implementation gap as organizations struggle to integrate sophisticated capabilities with their current operations. Qualtrics and Medallia, both leaders in customer feedback management, recently showcased divergent AI approaches at their annual conferences—with Qualtrics pushing into customer-facing AI agents while Medallia focuses on enhancing employee analytics tools. These advancements highlight the growing divide between what vendors offer and what most organizations can effectively implement, particularly as regulatory concerns, data limitations, and organizational readiness remain significant hurdles.

The big picture: Qualtrics and Medallia, both leaders in customer feedback management solutions, revealed contrasting AI strategies at their recent conferences, highlighting the industry’s varied approaches to enhancing customer experience capabilities.

• Qualtrics made a bold move into the competitive AI agent market with their Experience Agents, designed to handle customer-facing interactions beyond traditional chatbots, including personalized product recommendations and conversational surveys.
• Medallia focused primarily on employee-facing AI enhancements, such as Root Cause Assist and improved text analytics, designed to help staff extract more value from unstructured feedback data.

Implementation challenges: Despite the impressive technological innovations, many organizations are struggling to fully utilize these advanced capabilities due to various organizational and regulatory constraints.

• For companies in regulated industries like healthcare and financial services, customer-facing generative AI applications still present unacceptable risk levels.
• Many businesses lack the data integration infrastructure needed to maximize the value of AI-enhanced features, creating a utilization gap between what’s available and what’s actually deployed.

The reality on the ground: Conference attendees and clients are still wrestling with fundamental CX program maturity issues rather than advanced AI implementation.

• Many organizations continue to struggle with expanding beyond basic surveys, securing executive buy-in for CX initiatives, and demonstrating clear connections between customer experience metrics and business outcomes.
• While excitement exists around AI-powered tools, practitioners recognize these are just technological enablers—not solutions to the cultural and strategic challenges that remain the primary barriers to CX program success.

Key strategic imperatives: Industry experts recommend three critical focus areas for organizations navigating the CX technology landscape.

• Organizations should begin developing plans to incorporate AI into customer understanding initiatives despite implementation hesitancy, as waiting for “second-mover advantage” could leave companies at a competitive disadvantage.
• CX professionals need closer collaboration with data and IT teams to ensure customer feedback becomes an integral part of the organization’s broader data and AI strategy.
• Companies must invest in building employee AI literacy (Artificial Intelligence Quotient or AIQ) to effectively leverage new capabilities, recognizing that technology adoption requires significant internal change management.