Katie King: CX innovators lead with empathy, not algorithms

Generative AI, so the hype promised, would usher in an age of hyper-personalized customer engagement. But for many consumers, it has unleashed a flood of faux-personal emails and targeted ads that consistently miss the bull’s-eye. More than 61% of customers say they’re overwhelmed by the digital content aimed at connecting with them, and only 18% feel truly seen by the brands they engage with, according to a 2025 Forrester study.

Are AI tools falling short of their potential or simply being misapplied? To understand how customer experience (CX) leaders can close the gap between technological capability and meaningful connection, we spoke with Katie King, CEO of AI in Business, author, and leading expert in AI-driven marketing and customer experience. 

Fresh from her keynote at Refresh Europe 2025, King shared her insights on the barriers companies face in successfully deploying AI for personalization, how leading companies across industries are overcoming them, and practical advice for how to create more human connections through technology.

Many companies are great at using AI to optimize CX, but fewer seem to be using it to humanize those experiences. Why do you think that gap exists, and what are some early signs that a brand is getting it right?

There’s real progress, but also a lot of noise. AI offers powerful tools for hyper-personalization, yet many brands still apply it in ways that feel surface-level. We’ve seen strong uptake in areas like segmentation, targeting, and automation, but that often creates a sense of algorithmic sameness. Only 14% of consumers feel emotionally connected to a brand today, which suggests that AI is being used to optimize, but not to humanize. The tools are there, but if they’re delivering 10 irrelevant emails a week, that’s noise, not personalization.

You’ve said personalization isn’t cheap, but the payoff can be huge. How do you convince leaders to see AI in CX as a long-term value creator, not just a cost saver?

Some leaders do see it that way, but many are still focused on AI as a cost-saver. True personalization requires clean data, cross-functional teams, and creative strategy. But the ROI is huge. McKinsey’s 2025 CX report shows companies that personalize well see a 20% uplift in customer lifetime value, reduced churn, and 30-40% higher marketing efficiency. Leaders who “get it” treat personalization not as a campaign add-on, but as a long-term investment in trust and emotional connection.

Read also: How 5 top industries are redefining customer support

Retail is often at the forefront of innovation in CX. What makes it such fertile ground for AI-powered personalization?

Retail is highly advanced because the stakes are high and customer expectations are sky-high. Nectar and Boots in the U.K. have nailed “less but smarter” by using loyalty data to serve up relevant, timely rewards that feel earned. Sephora’s virtual assistant analyzes tone of voice and language used during chats to adapt recommendations based on a user’s mood, not just purchase history—an emotional layer few brands have mastered. IKEA’s AI-powered “Inspiration Hub” blends user behavior, room dimensions, and seasonal trends to offer design suggestions, connecting e-commerce with human creativity. These approaches drive retention and emotional engagement, not just transactions.

Outside of retail, where are you seeing similarly innovative use of AI in CX?

Financial services like TD Bank use life-stage indicators like house purchases or new babies to anticipate needs, sometimes before the customer asks. Mastercard scans billions of social media posts to identify rising trends, allowing them to tailor campaigns around emerging micro-moments.

In healthcare, Babylon Health’s AI triage personalizes advice based on records and appointment history, while Cleveland Clinic has piloted an AI patient engagement tool that provides highly personalized FAQs, emotional support resources, and medication reminders based on individual conditions and behavior patterns.

Even government is innovating. The U.K. government’s “Humphrey” AI analyzes large-scale public consultation responses, not only summarizing key themes faster than human analysts but also flagging emotionally charged language to better shape policy tone.

Many organizations are still just starting their AI journey. If you have to leave them with some guiding principles, what would they be?

The standouts offer a view into what works. First, they lead with empathy, not tech: Personalization isn’t about knowing what I bought last, it’s about anticipating why I might need something next. Secondly, they blend AI with storytelling, because technology without narrative falls flat. And finally, they’ve simplified their stack, focusing on orchestration rather than layering on tools, with strong internal alignment breaking down silos between IT, marketing, and compliance teams. 

For others looking to bolster their use of AI in CX, my advice is to start by training your teams, creating internal champions, cleaning up your data, and piloting with one journey while measuring results clearly. And to make sure you’re on a solid foundation, remember to bring in ethics early, so privacy is baked in, not bolted on, and you can focus on delivering excellent CX.