Emotional intelligence key to loyalty as AI spreads

TP in Australia says emotional intelligence is becoming central to customer loyalty as retailers expand their use of artificial intelligence. Brands are increasingly judged on how they make customers feel.

Richard Valente, Vice President Customer Experience Strategy at TP in Australia, argued that as AI tools make speed, convenience and personalisation more common, retailers will need to rely more on human judgement and empathy to stand out.

The argument reflects a broader shift in customer service strategy. Businesses are moving beyond AI for back-office tasks such as summarising calls, answering common questions and reducing handling times. They are now applying it to customer-facing interactions, where systems can interpret context, predict intent and analyse sentiment during live exchanges.

That shift is reshaping the role of service teams. Rather than replacing staff, AI can reduce administrative work and give employees more relevant information before and during a conversation, including customer history, past issues and likely reasons for contact.

This gives frontline workers more time to listen and resolve problems that require discretion or reassurance. In sectors such as retail, finance and healthcare, customers may be anxious, frustrated or vulnerable, making human intervention important even as automation spreads.

Changing expectations

Retailers are under pressure to connect customer experiences across digital and physical channels, especially as consumers grow more used to personalised service. Valente said shoppers are likely to expect store staff to understand recent online enquiries and purchase history, while support teams may also be expected to contact customers before order problems escalate.

Interactions once seen as advanced service features are becoming more routine as AI systems are deployed more widely. That creates a new challenge for brands: faster service alone may no longer be enough to build loyalty.

Trust will become more important as businesses rely more on AI in customer interactions, Valente said. Consumers will increasingly want clarity on when they are dealing with an automated system, how their data is being used and when a person can take over.

The issue is particularly relevant in retail, where brands are trying to improve sales and defend market share while reducing friction in the customer journey. AI can help businesses tailor offers, guide service staff and identify likely customer needs, but it also raises questions about transparency and the limits of automation.

Human judgement

Valente framed emotional intelligence as a business asset rather than a soft skill, arguing that companies that use AI effectively will be those that strengthen human interaction instead of stripping it out. In his view, the value of service teams will increasingly depend on their ability to make customers feel heard when an issue is complex or sensitive.

He said the future of customer experience would be shaped by systems in which automation and human connection support each other. "The reality is that consumers ultimately judge brands on an emotional level. They remember how a business made them feel far longer than they recall how quickly their issue was resolved. While speed opens doors and convenience captures attention, true long-term customer loyalty is earned through empathy and deep understanding," said Richard Valente, Vice President Customer Experience Strategy at TP in Australia.

He also described AI as a tool that can improve, rather than diminish, personal service when used to remove routine burdens from frontline staff. "Imagine a customer service adviser entering a conversation already equipped with AI-generated insights about the customer's history, previous frustrations, likely intent and recommended solutions. Freed from system-hopping and manual searching, advisers can dedicate their full energy to listening, reassuring and solving issues. In essence, AI removes operational friction so people can build authentic relationships," Valente said.

For retailers, the implication is that investment in automation may need to be matched by investment in staff training, service design and governance around the use of customer data. The competitive question is shifting from who can respond fastest to who can combine automated efficiency with credible human support.

Valente said that balance would define the next stage of AI adoption in customer experience. "Regardless of how predictive or seamless journeys become, one core principle remains unchanged: people want to feel heard. AI provides the engine powering modern CX, but emotional intelligence remains the steering wheel. Organisations that combine both won't simply deliver faster service. They will cultivate deeper loyalty and a defensible competitive advantage, proving that while technology is universally commoditised, genuine human connection is not," he said.