Artificial intelligence is no longer just a futuristic add-on to customer service - it has become central to how companies build trust, loyalty and lasting relationships with their customers.
That's the key message from Chris Donato, Chief Revenue Officer at Zendesk, who spoke in Sydney this week about the findings of the company's latest Customer Experience (CX) Trends Report.
"We're very much in a loyalty economy," he told TechDay.
"Seventy-three percent of consumers say customer service is a make-or-break factor when it comes to brand loyalty. Companies that don't act on that now will fall behind."
According to Donato, the report underscores the growing role of what Zendesk calls human-centric AI - technology designed not to replace human agents, but to work alongside them.
"Our belief is with AI, you're going to increase the interactions with your customers, which is what you want. You want to get to know your customer better," he said.
Donato explained that AI should be used to handle routine tasks, freeing up human agents to deal with more complex or high-value interactions. "The challenge is moving engagement away from fixing basic issues and towards high-impact conversations that drive loyalty," he said.
At the core of Zendesk's strategy is agentic AI, which emphasises reasoning and adaptability based on real-time data.
"It starts with data and the ability to build a knowledge base," Donato explained. "But what's powerful is the system's ability to learn from every interaction and get smarter over time."
He said this approach is already delivering results for clients such as Levi's, which saw resolution rates jump to 50% within 30 days of implementing Zendesk AI. "And it's not just about results," Donato added. "It's also about ease of use and fast implementation. That's what customers are responding to."
Australian high-end furniture retailer Coco Republic has also seen early success.
"They told us it was the most successful project they've had, and they're already seeing results," he said.
Donato also pointed to Etsy, which is on track to achieve 60 to 70% resolution rates through AI-driven service. "Our goal in the B2C world is to get to 80% resolution via AI," he said. "And we believe that 100% of customer interactions will eventually be touched by AI in some way."
This drive for better performance is changing more than just technology. It's also shaking up the software-as-a-service (SaaS) pricing model.
Traditionally, SaaS firms scaled revenue based on the number of user seats sold. But Donato said AI is pushing the industry towards outcome-based pricing.
"We are working hard to align ourselves with our customers and how they think about success," he said. "They benefit, we benefit. They don't benefit, we don't."
He described this model as "all about resolutions" rather than just interactions.
"Everything we're building, from our multi-agent architecture to voice integrations, is focused on resolving customer issues."
Outcome-based pricing, Donato argued, also builds trust. "It creates transparency around the value customers actually receive. That matters, especially in today's uncertain environment."
But as AI grows in power and reach, concerns about dehumanisation are rising. Donato said Zendesk is focused on balancing automation with authentic customer engagement.
"The maturity of sentiment analysis is improving all the time.
We're learning to detect when a situation needs a human touch and pivot quickly," he said. "We're no longer just serving up articles. This is a reasoning-based approach."
Human agents, he added, "still play a crucial role in driving loyalty."
"AI enables those agents to focus on what matters most, and as a result, their impact becomes much greater," he said.
The synergy between AI and human agents is also improving service quality in ways that help companies go beyond reactive problem-solving and move towards proactive support.
"As you solve problems quickly, customers become confident in your brand - and that creates opportunities for cross-selling and deeper loyalty," he said.
Donato noted this approach is already being used by companies like Hunter Douglas and Etsy, who are using AI to identify common customer issues, generate new knowledge content, and proactively offer solutions.
Asked what his advice would be to businesses yet to invest in AI for customer service, Donato was direct. "Get started. What are you doing?" he said.
He urged companies to stop waiting and begin with a small use case. "Put a stake in the ground, test a particular channel, and build from there," he said.
"The technology is ready, the security standards are there - and the business case is clear."
Waiting too long, he warned, comes with real risk. "Especially in B2C, companies that delay will be disintermediated. You'll lose your place in the loyalty economy."
And Donato has a message to those companies unsure on taking the first step.
"Nobody should be waiting. The time is now."
