The Rising Value of Bespoke Consumer Experiences in an AI-Driven World

In the ever-evolving landscape of the hospitality industry, my bet is that bespoke consumer experiences will only increase in value to the user and thus price. As AI technology advances, it’s poised to dominate the medium and lower end of the hospitality sector, transforming AI chatbots into a hallmark of mainstream affordable or low-cost service. Consequently, people will be willing to pay a premium to speak to a real person.

The CMS Era: A Missed Opportunity in Customer Support

Reflecting on the 2000s, the CMS website trend revolutionized the ability to build hundreds of pages in mere days. Content management systems (CMS) like Drupal, Joomla, WordPress, and Magento enabled rapid content creation and management. However, one area where CMS consistently fell short was the support sector. FAQs, knowledge bases, and Wikis were meant to offer vast amounts of content to “help” visitors, reduce support centers’ costs, cut down on support tickets, and enhance customer satisfaction.

At the time, there was a prevailing sentiment that these tools would be the panacea for customer service woes. As one article from the era noted, “With the rise of content management systems, companies can now provide a wealth of information at their customers’ fingertips, reducing the need for direct support and empowering users to find solutions on their own” (TechNews, 2005). Another industry report echoed this optimism, stating, “CMS-driven support portals will revolutionize how we handle customer inquiries, slashing response times and operational costs” (Support Today, 2006).

However, these lofty promises often went unfulfilled. As customer expectations evolved, the limitations of these self-service tools became apparent. When was the last time you spent a considerable amount of time sifting through one of these resources? Customer service effectiveness is still measured by the speed and accuracy of issue resolution, not the volume of content provided. Users, recognizing this, pushed back. As a result, support centers resorted to using these tools to direct users towards self-service options.

In literature, the disconnect between technology and genuine human interaction has been a recurring theme. Author Nicholas Carr, in his book The Shallows, highlighted, “The internet is an interruption system. It seizes our attention only to scramble it.” This resonates with the CMS era’s approach to customer support — offering information but often failing to truly address the user’s needs.

The Role of AI in Modern Consumer Experiences

A recent study published in the Journal of Hospitality Marketing & Management underscores the complexities of integrating AI into consumer-facing roles. Researchers conducted surveys with over 1,000 adults in the U.S. to assess the impact of AI disclosure on consumer behavior. The findings were telling: products described as using artificial intelligence were less popular.

In the experiments, the researchers included questions and descriptions across diverse product and service categories. For example, in one experiment, participants were presented with identical descriptions of smart televisions, the only difference being the term “artificial intelligence” was included for one group and omitted for the other. The group that saw AI included in the product description indicated they were less likely to purchase the television.

Researchers also discovered that negative responses to AI disclosure were even stronger for “high-risk” products and services — those which people commonly feel more uncertain or anxious about buying, such as expensive electronics, medical devices, or financial services. Because failure carries more potential risk, which may include monetary loss or danger to physical safety, mentioning AI for these types of descriptions may make consumers more wary and less likely to purchase, according to Cicek.

“We tested the effect across eight different product and service categories, and the results were all the same: it’s a disadvantage to include those kinds of terms in the product descriptions,” Cicek said.

In addition to Cicek, the study included co-authors Dogan Gursoy, professor of hospitality at WSU, and Lu Lu, associate professor at Temple University’s Fox School of Business and Management.

These insights highlight a crucial point: while AI can efficiently handle routine and lower-end tasks, there is an intrinsic value in human interaction that technology cannot replicate. As AI continues to permeate various sectors, the premium on genuine, human-to-human interaction will likely rise. This trend suggests a future where the most valuable and memorable consumer experiences are those tailored by real people, not algorithms.

Upselling Concierge Services: A Strategic Advantage

In an AI-driven world, the role of human interaction becomes even more pronounced and valuable. For businesses, upselling concierge services with real persons can significantly enhance the bottom line. Here are a few ways this strategy can be implemented:

1. Personalized Recommendations: Concierge services can offer personalized recommendations that AI may miss. Understanding customer preferences, previous interactions, and real-time needs allows a human concierge to provide tailored experiences, from dining reservations to exclusive event access. This level of personalization can lead to higher customer satisfaction and increased spending.
2. Enhanced Customer Loyalty: The personal touch of a human concierge fosters a deeper emotional connection with customers. This connection can translate into increased loyalty, repeat visits, and word-of-mouth referrals. For example, a hotel that offers personalized itinerary planning through a concierge service can create memorable experiences, encouraging guests to return and recommend the hotel to others.
3. Increased Revenue Through Upselling: Trained concierge staff can effectively upsell premium services and experiences. Whether it’s upgrading a hotel room, booking a spa treatment, or suggesting exclusive tours, human concierges can read customer cues and suggest relevant upsells in a way that feels natural and personalized, leading to higher acceptance rates and increased revenue.
4. Differentiation in a Competitive Market: In a market increasingly dominated by AI-driven solutions like ChatGPT, Google Bard, and Gemini, offering human concierge services can be a key differentiator. Businesses that emphasize personal interaction and high-touch services can stand out, attracting customers willing to pay a premium for these experiences. This differentiation can enhance the brand’s reputation and positioning in the market.
5. Addressing High-Risk Concerns: For high-risk products and services, the reassurance provided by a human concierge can mitigate customer anxiety. Whether it’s guiding a customer through a complex financial decision or offering personalized health advice, human interaction can build trust and confidence, increasing the likelihood of a successful sale.

Closing thoughts

For businesses in the hospitality industry and beyond, this represents a pivotal opportunity. By leveraging AI to handle routine inquiries and reserving human interaction for bespoke, high-touch experiences, companies can enhance customer satisfaction and loyalty. As we move forward, the balance between AI efficiency and human empathy will define the next era of consumer service.