What you need to know

• AI-powered customer experience (CX) could unlock US$860 billion in business value, per new research from McKinsey and Co plus Qualtrics. But most companies are missing the mark.
• While 77% of execs say AI is a top priority for CX, only 12% have an organisation-wide AI strategy. Just 15% aim to lead in AI transformation.
•  The majority are stuck in "pilot purgatory"—testing AI in isolated pockets rather than scaling it across the business, leaving huge value untapped.
• Three AIs to know to realise value are: Agentic AI (chatbots, assistants), Creative AI (personalisation, visualisation) and Analytic AI (linking CX to hard ROI)
• Automating low-value customer queries, unlocking personalisation, and linking CX to spending are reshaping how business value is created.
• Execs are wary of cross-functional governance and operational overhaul, and see it as threatening as well as daunting. Yet as McKinsey says, that’s essential for success.
• Companies with systematic AI strategies are 2.3x more likely to grow market share. Laggards risk falling irreversibly behind.
• Echoing past tech waves, AI is shaping up as the foundational layer for future CX. Those not embedding it deeply now may be outpaced—fast.

AI is no longer nibbling at the edges of customer experience—it’s moved to the main course. For companies that get the recipe right, the prize on the table is a cool US$860 billion, according to analysis by McKinsey and Company revealed in a new report from Qualtrics at that latter's user conference last week in Salt Lake City.

But many organisations are ill-equipped to capture gains, if the analysis is correct is correct. That’s because while three-quarters of executives surveyed said improving CX is critical and AI is core to doing that, barely 10 per cent of organisations have the kind of org-wide AI strategy and centralised ownership needed to executive effectively, according to McKinsey. Beyond that, few companies currently see the need, with only 15 per cent aspiring to the lead in the realm of AI-driven business transformation.

If that sounds familiar, it's because it is eerily reminiscent of previous technology waves such as blockchain and cloud computing in the last decade, and even client-server computing if you feel like a trip in the way-back-when machine to the late 1990s.

It’s a point acknowledged by Isabelle Zdatny, head of thought leadership for Qualtrics, who told Mi3 Australia, “I think if you truly want to unlock the value of AI, you need to make fundamental changes to how your organisation operates. I was just reading an Axios report this morning that found 75 per cent of executives are concerned their AI solutions are developed in silos. They understand the problem, but they're hesitant to make the fundamental changes—to technology, infrastructure, and other critical areas—that are necessary to move forward."

McKinsey and Co Partner, Victoria Bough said “To make this more concrete, the most exceptional companies leading this change are embracing things like cross-functional governance—something that can be terrifying for executives. Cross-functional board governance can feel like a threat to their roles or signal a shift in responsibilities."

In a briefing prior to the start of the user conference, Bough told media and analysts that agile, cross-functional teams operating in a test-and-learn, iterative way represent a completely different operating model than most organisations are used to. It’s about taking practices once confined to IT and applying them across all operations, she argued.

“Many leaders have been measured on one set of criteria, and now they’re being told they’ll be evaluated on usage rather than shipments. That’s a huge shift, and for many, it’s just plain fear."

Unlocking new value

Called “Driving financial impact through AI-enabled customer experience” the McKinsey and Co study lays out in meticulous, data-driven detail how AI is fundamentally reshaping customer interactions, streamlining operations, and unlocking previously untapped value.

McKinsey examined 19 different sectors, diving into eight B2B and 11 B2C industries. The team mapped out sector-specific pain points and matched them against three types of AI-driven solutions:

• Agentic AI that interacts directly with customers,
• Creative AI that enhances visualisation and personalisation,
• Analytic AI that uncovers hidden opportunities in customer behaviour.

Then, the study authors attached what they described as concrete KPIs to each AI opportunity, measuring business impact through customer spend, retention, and operational efficiencies.

The research concluded customer experience is a potentially-trillion-dollar game-changer. But even with that upside on the table, most companies are moving too slowly. 

"A lot of organisations are still stuck in pilot mode," said Bough. "They’re experimenting in isolated pockets but not scaling AI’s impact across the business. That’s leaving massive value on the table."

Breaking down the US$860 billion prize

According to the study, AI-driven productivity gains will account for the lion’s share of the opportunity. Automating mundane, time-consuming tasks, especially in frontline customer service roles, could free up billions in value. 

"80 per cent of inbound queries to sales reps have nothing to do with actual selling," Bough noted. "If you automate those interactions with an agentic AI, you see a huge uplift in productivity."

AI is also a powerful growth engine. AI-powered personalisation and predictive analytics are unlocking revenue opportunities through cross-sell, upsell and retention strategies that were previously impossible, she said. 

"We’ve always known customer experience impacts business value, but now we can quantify it. AI helps companies track exactly how a specific experience translates into customer spend. That’s a huge unlock for the entire discipline," Bough explained.

Then there are the cost savings. AI-driven operational improvements—whether in call centres, logistics, or procurement—are driving massive efficiencies. "Think about the number of truck rolls a company sends out to fix issues in the field. If AI can predict and prevent those problems before they happen, that’s a massive cost reduction," Bough added.

Three AIs

Not all AI is created equal, and McKinsey’s breakdown of AI’s different roles in CX is crucial for understanding where companies should invest.

Agentic AI, the most visible form, powers chatbots and virtual assistants that handle customer queries, book appointments, and even guide sales. These systems are already transforming service models across industries.

Creative AI enhances customer engagement by providing hyper-personalised experiences. "Imagine you’re buying furniture online," said Bough. "Instead of guessing whether a couch will fit your living room, AI can show you exactly how it looks in your space. Or for fashion, you can see how a dress will look on you before you buy it."

Analytic AI is arguably the most underappreciated but powerful category. By linking customer experiences to actual business outcomes, it’s giving CX leaders the hard numbers they’ve struggled to generate for decades. 

"For years, companies have improved Net Promoter Score and customer satisfaction scores without a clear link to revenue. AI changes that," Bough said. "Now we can see: Did improving this experience lead to higher spending? If yes, double down. If not, figure out why."

Despite the clear financial incentives, many companies are still struggling to scale AI across their customer experience operations. The biggest roadblocks? Fragmented strategies, legacy data infrastructure, and organisational silos that prevent AI from delivering its full potential.

To break through, the report outlines a four-step approach:

1. Identify AI opportunities tied to clear business KPIs.
2. Upgrade data infrastructure to enable seamless AI deployment.
3. Build governance frameworks to ensure responsible AI use.
4. Scale successful pilots into full-scale AI transformations.

"The winners in this space aren’t just playing with AI. They’re embedding it into the core of how they operate," said Bough. "They’re aligning AI with business priorities, training their workforce to work alongside AI, and building the infrastructure to make it all scalable."

This isn’t a passing trend. AI is becoming a competitive necessity, and businesses that fail to act decisively will fall behind. "If you don’t have AI deeply embedded in your customer experience strategy within the next two years, you’ll be competing against companies that do," Bough warned.

The report's bottom line is clear: AI isn’t an optional upgrade to CX—it’s the new foundation. Companies that move fast will reap the rewards. Those that hesitate? They’ll be left chasing an ever-widening gap, as AI-driven competitors continuously evolve, improve, and redefine customer expectations in real-time.
 

Leadership gap in AI adoption

The latest data also reveals a troubling disconnect between AI ambition and execution. According to Zdatny the contradiction is playing out across industries. 

"77 per cent of executives say AI is a critical priority, and 75 per cent believe it will significantly improve their ability to meet customer expectations. Yet only 12 per cent have an organisation-wide AI strategy in place. That’s a huge gap."

The research highlights a clear correlation between structured AI adoption and business performance. Companies gaining market share are 2.3 times more likely to have a systematic AI strategy compared to those stuck in neutral. But the most surprising finding? Just 15 per cent of executives aspire to be at the forefront of AI-driven transformation.

"I get it. AI comes with real challenges," Zdatny admitted. "If you don’t approach it responsibly, you can do serious damage to your brand. But the compounding advantages of getting it right are massive. Every AI-driven interaction makes systems smarter, every insight adds value, every improvement deepens customer relationships. The companies moving quickly and responsibly are going to build a lead that becomes impossible to close."

The takeaway? AI isn’t just another tool—it’s the next battleground for market leadership.