Spotlight on Service (SOS) Newsletter: March 2026

Published March 20, 2026

Trust, Talent and Tough Choices – The CX Pressures Defining 2026

Everywhere you look right now, businesses are being told to move faster, automate more, reduce cost and do more with less.

At the same time, customers are feeling more cautious, employees are feeling more stretched and trust is becoming harder to earn.

Against that backdrop, the organisations most likely to be seen as world-class are not necessarily the ones making the most noise. They’re the ones protecting the customer experience when pressure is rising and making thoughtful decisions about where technology helps, where leaders matter and where human connection still makes all the difference.

Recent research suggests that 2026 is shaping up to be a defining year for exactly those choices.

AI is moving fast – however customer trust is not!

Through the FIT Lens: AI is rapidly becoming part of everyday service delivery. However, faster is not always better in the eyes of the customer.

Forrester predicts that in 2026, one-third of companies will damage customer experience through frustrating AI self-service, even while some organisations improve simpler interactions through better operational design. That should be a warning to every CX leader and business owner. The issue is not whether AI has value. It clearly does. The issue is whether it’s genuinely removing friction – or simply helping businesses disappoint customers more efficiently.

What this means for staff: When AI gets it wrong, the emotional clean-up usually falls to the human team. Advisors are left to deal with confused customers, repeated queries and frustration that’s already been building before the conversation even starts. That can be exhausting, especially if staff are expected to restore trust without the authority, training or time to resolve the root cause properly. In some organisations, poor AI isn’t reducing pressure at all – it’s simply pushing more difficult and emotionally loaded work back onto the frontline.

What this means for customers: Customers may welcome speed for very simple tasks. However, when the issue is important, sensitive or emotionally charged, speed without clarity can feel cold and unhelpful.

Customers do not separate the ‘bot’ from the brand. They judge the overall experience. If they’re trapped in loops, given vague answers or blocked from reaching a capable human, trust can fall away very quickly.

Practical recommendations: Review where AI is genuinely helping and where it may be creating extra effort.

Make it easy for customers to reach a human when the issue is complex, urgent or emotionally significant.

Measure escalations, repeat contacts and complaint themes alongside any bot-efficiency metrics. Clever automation is only clever if it leaves the customer feeling supported.

When customers feel cautious, service has to work harder

Through the FIT Lens: Consumers are still watching their spending carefully.

KPMG’s latest UK consumer research found that only 13% expect discretionary spending to increase in 2026, while 49% of those who believe the economy is getting worse say they’re cutting back on discretionary purchases.

Reuters also reported UK consumer spending growth of just 1.1% in February, with inflation concerns weighing on sentiment.

In a climate like that, service matters more, not less. When customers feel cautious, every interaction plays a bigger role in whether they feel confident enough to buy, stay and recommend.

What this means for staff: Frontline teams are increasingly dealing with hesitant buyers, more questions, more comparison and a greater need for reassurance. That changes the nature of the role. Staff are not just processing transactions – they’re helping customers feel safe enough to move forward. That takes empathy, confidence, clarity and the ability to communicate value in a way that feels credible and calm.

What this means for customers: When money feels tighter, customers tend to notice everything more. Delays feel riskier. Poor communication feels more frustrating and vague promises feel less acceptable. World-class service in a cautious economy is often less about grand gestures and more about reducing uncertainty, building confidence and helping customers feel looked after at every step.

Practical recommendations: Help your teams explain value, not just price.

Tighten proactive communication around delays, next steps and service expectations.

Review the points in the journey where customers may hesitate or wobble.

Calm, clear reassurance can be one of the most powerful service tools you have.

Employee disengagement is showing up in the customer experience

Through the FIT Lens: One of the most important CX issues in 2026 is not sitting on the customer side of the fence at all – it’s happening inside organisations.

Achievers’ 2026 EMEA engagement and retention report found that 33% of employees plan to job hunt in 2026, only 18% have regular weekly 1:1s with their manager and just 23% feel appreciated. Those aren’t just HR statistics. They’re early warning signs for customer experience. When employees feel invisible, unsupported or disconnected, customers often feel the effects not long afterwards.

What this means for staff: When appreciation is low and connection to leadership is weak, energy tends to drain away. Pride fades. Initiative shrinks. The little extras that make service memorable begin to disappear. Teams may still be doing the basics, however the warmth, ownership and care that elevate an experience can quietly flatten out.

What this means for customers: Customers may never see an engagement report, however they absolutely notice the symptoms. They feel it in the lack of follow-up, the flat tone, the missing warmth and the sense that nobody is truly taking ownership.

Service can still be technically acceptable while feeling emotionally forgettable – and forgettable is never the goal for organisations aiming to be seen as world class.

Practical recommendations: Treat recognition as part of your customer experience strategy, not a side issue.

Use customer stories and service wins to reconnect teams with purpose.

Support leaders to notice low energy before it affects performance.

A disengaged culture rarely delivers standout service for very long.

 

Todays managers need to build connection, not just chase performance

Through the FIT Lens: If disengagement is growing, then the manager relationship becomes even more critical.

The same Achievers research shows that only 18% of employees have regular weekly 1:1s, and those who receive frequent recognition are far more likely to feel appreciated and engaged. That makes the manager role pivotal.

In service settings, managers are not just there to monitor output. They are culture carriers, confidence builders and emotional tone-setters. The customer may never meet them, however the team’s energy often reflects them.

What this means for staff: A strong manager can create steadiness during pressure, build confidence and make people feel seen. A weaker manager may still chase numbers, however often at the expense of morale and commitment.

Teams need more than targets. They need coaching, feedback, recognition and someone who notices what is really going on. That is especially true in customer-facing roles that can be repetitive, demanding and emotionally draining.

What this means for customers: Customers may never know who manages the team they are dealing with, however they feel the impact of that leadership in the tone, confidence and consistency of the experience.

Strong managers help create calmer, more accountable service. Weaker managers often produce rushed, robotic or defensive interactions. Put simply, managers shape the emotional weather that customers walk into.

Practical recommendations: Bring back regular 1:1s with real purpose.

Train managers to coach, listen and recognise well, not just monitor output.

Encourage them to stay close to the reality of the frontline – calls, complaints, recovery situations and the everyday pressure points that customers and staff are navigating together.

 

The Cost-Cutting Trap: Are You Saving Money While Quietly Damaging Perception?

Through the FIT Lens: Most organisations are under pressure to protect margin. That’s understandable. However, there is a real risk in stripping too much out of the customer experience while expectations remain high.

The January 2026 UK Customer Satisfaction Index rose to 78.2, the highest level since July 2022, and all 13 industry sectors improved year on year.

At the same time, Forrester warns that cost pressure is driving decisions that can weaken trust and experience, particularly when change is rushed or self-service is poorly executed.

The bar is rising. Customers are not lowering their standards simply because times are tough.

What this means for staff: When teams are stretched, rules are tightened and resources are trimmed, people often move into survival mode. They may still be working incredibly hard, however the experience can start to feel thinner, less personal and more transactional. Flexibility drops. Response times slip. Ownership becomes harder to sustain. This is where burnout and blandness can start to meet.

What this means for customers: Customers experience service cuts in very human ways – longer waits, fewer updates, less empathy and more effort. Internally, a business may frame this as efficiency. Externally, the customer may experience it as indifference. That gap matters. It’s often where trust begins to wobble and loyalty starts to weaken.

Practical recommendations: Protect the moments that matter most, especially onboarding, complaints, recovery and renewal.

Remove waste wherever you can, however do not remove warmth.

Track the customer impact of cost decisions through complaints, churn, repeat purchase and qualitative feedback.

Before signing off any change, ask the simplest and most important question of all: “What will this feel like to the customer?”

Summarising our March insights….

The organisations most likely to be seen as world-class in 2026 will not be the ones with the flashiest tech or the loudest claims.

They will be the ones that make better judgement calls under pressure.

They will use AI thoughtfully, support their people properly and resist the temptation to save money in ways that quietly erode trust.

In a market shaped by caution, change and rising expectation, human connection still matters enormously. For many brands, that may be the real differentiator that customers remember.

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