In an era increasingly shaped by AI, the most memorable customer experiences harness the power of “and”—they are fast and human, automated and deeply personal. Being seen and understood isn’t at odds with scale. It’s what elevates it. 

From transactions to trust

Over the past decade, organizations have invested in technology to make customer service faster, more consistent, and less reliant on human intervention.

While automated chatbots and self-service tools have become commonplace, many experiences still feel impersonal and often frustrating. That’s because they were built for efficiency, not empathy.

But business is shifting from a service economy, where value is measured by speed and volume, to an experience economy, where value is created through emotional resonance, trust, and personalization. 

This concept of the “experience economy” was first introduced by B. Joseph Pine II and James H. Gilmore, who argued that we are moving into an era where the primary offering is not a product or a service, but rather the experience itself. In their words, “work is theatre and every business a stage.” That framing may sound dramatic, but it’s more relevant now than ever. Consumers aren’t just buying outcomes. They’re buying how those outcomes feel.

It’s a shift that’s easy to see in our daily lives. We’ll choose a coffee shop not just for the quality of the coffee, but for how the space makes us feel. We’ll return to a brand that remembers our preferences. We’ll tell friends about the airline that made a frustrating delay easier to navigate with clarity. These experiences create differentiation in a world where many services have become commoditized. In fact, according to a survey we conducted in 2024, 30% of consumers say they have stopped using a brand after a negative experience in the past year.

The five levels of experience

Technology has historically lagged behind this evolution, but that’s changing, too. Artificial intelligence is now capable of understanding sentiment, adapting to behavior in real time and personalizing every interaction. This evolution requires more than incremental upgrades. It calls for a new approach—one where conversations across channels, moments, and touchpoints are designed to feel seamless, personalized, and emotionally intelligent.

To understand how organizations are navigating this shift, we developed a five-level maturity model that maps progress from basic transactions to fully orchestrated, emotionally intelligent experiences.

Levels 1 and 2: Rely on rigid, rules-based systems like legacy phone trees or entry-level chatbots to handle simple customer requests. These interactions are often siloed, reactive, and limited in their ability to adapt. 

Level 3: Integrates predictive and generative AI to personalize interactions in real time. Virtual assistants don’t just answer questions—they start to anticipate needs, resolve problems proactively, and adapt based on context.

Agentic AI is the bridge to the highest levels of experience orchestration, enabling systems to take initiative, make decisions, and coordinate actions across channels to pave the way for emotionally intelligent and fully orchestrated experiences.

Level 4: AI will begin to reflect emotional intelligence. It will detect tone and sentiment, respond with appropriate empathy, and even switch communication styles based on the customer’s preferences or language. This will enable systems to handle more complex, emotionally charged conversations like resolving a billing dispute or managing a delayed flight without losing the human touch.

Level 5: Universal orchestration. This is an aspirational frontier. AI will be adaptive and predictive, and capable of acting as a kind of personalized virtual concierge that understands individuals holistically across time and channels. For many industries, it is poised to become a competitive imperative.

The economic value of empathy

There’s no doubt that automation and augmentation drive real value. Businesses that implement AI-driven tools to handle routine customer interactions and provide real-time employee assistance often see meaningful improvements in efficiency, cost savings, and scalability, while also driving increases in employee engagement and customer satisfaction.

But the real prize lies beyond efficiency, in loyalty.

When businesses invest in empathetic AI that can personalize experiences, optimize journeys, and foster trust, they unlock a new level of potential economic impact. Consider a regional bank with a thousand customer service agents. By layering empathetic AI capabilities into its operations, it could not only reduce churn and improve employee retention but also create new top-line opportunities through more effective upselling, cross-selling, and long-term customer loyalty.

Empathy, in a very real way, can pay.

Empathy by design

Empathy is often thought of as a uniquely human trait. But in the context of AI, it becomes both a design challenge and a philosophical one.

Building emotionally intelligent systems requires training models to recognize more than just words. They must interpret tone, pace, hesitation, and sentiment. They must connect disparate data points to understand context, like why a customer is calling, how they’re feeling, and what they’ve experienced before, then adjust their response accordingly.

Some of the more advanced systems now match customers with agents based on emotional state and skill compatibility, offer proactive help before an issue escalates, and adjust tone in real time. They’re also capable of continuous learning, using journey data to refine interactions and ensure the experience gets better over time.

This is a new kind of intelligence. This is empathy by design. 

The human future of AI

As we move further into the experience economy—during times of macroeconomic tailwinds or headwinds—one thing is clear: Being human is a business advantage. In fact, a Forrester analysis shows that companies that improve CX can drive significant revenue growth. 

The most valuable experiences in life, and in business, are those that make us feel seen, understood, and valued. They help turn customers into loyalists, and brands into beacons. Empathy isn’t a feature. It’s the future. And AI, when built with that truth at its core, can help us deliver something truly powerful: technology that scales service and scales humanity.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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