AI Won’t Grow Your Business. But Human Relationships Will.

Last week, my family and I visited Yosemite National Park. The breathtaking views alone made the trip worthwhile, but One of my lasting memories will be the powerful reminder it provided on the importance of relational human experiences, for customer loyalty, staff retention and consistent business success.

As co-author of The HUMAN Brand, I’ve spent the past 15 years researching, speaking and advising companies on the psychology of customer loyalty and staff engagement.

Again and again, our research has shown that humans are not motivated or fulfilled by transactional efficiency. They seek connection, trust, and relational human experiences. And yet, conventional business thinking and leaders continue to move in the opposite direction.

The Rise of the Transactional Human Experience Trap

Over the past two decades, the rise of e-commerce, mobile devices, and social media have promised unprecedented economies of scale. Customers can shop faster, compare options instantly, and have goods delivered to their doorstep in hours. For some companies, these innovations have certainly created operational efficiencies and reduced certain direct costs.

But the rarely measured indirect costs of transactional human experiences have been equally profound:

• Customer trust and loyalty have steadily declined, with poor customer service costing US businesses $75 billion in revenue annually.
• Staff engagement and retention are lower than ever, costing US businesses $450-$500 billion each year.
• Lasting customer relationships have been increasingly replaced with impersonal service transactions.

The result is what I call the Transactional Human Experience Trap: a cycle where businesses “save” on operational efficiency and direct costs in the short-term, but ultimately lose much more in the medium and long-term from the greater indirect costs and consequences of delivering transactional, rather than relational human experiences.

They become trapped in the mistaken belief that all operational efficiencies and direct cost reductions are evidence of enhanced business performance.

Now, with the explosive adoption of generative AI, this shortsighted performance trap is set to grow exponentially. Companies are rushing to automate service and reduce labor costs, imagining a future of AI-powered efficiency. But the indirect costs—emotionless experiences for customers, disengaged staff, and inconsistent business growth—are left out of the equation. Without thoughtful consideration and planning, AI risks creating even more soul-crushing transaction factories.

A Different Kind of Experience

That’s why our family’s stay at The Ahwahnee Hotel in Yosemite felt so different. Built in 1927 and operated today by Aramark Destinations on behalf of the National Park Service, The Ahwahnee is not a new property. But it exemplifies the timeless value of relational human experiences.

My wife and I stayed at The Ahwahnee on our honeymoon in 1995. Last week, we returned with our adult children to celebrate our 30th wedding anniversary. Even though we would only be staying one night, our experience began weeks before we arrived—thanks to Basil the hotel concierge.

Basil proactively reached out to ask how he could help with our trip. When he learned it was a special occasion, he personally recommended dining and excursions, made reservations, and even adjusted plans in real-time while we were there. Despite significant federal budget and staffing cuts to national parks, he curated our visit with warmth, competence, and attention to detail.

Most importantly, Basil approached our stay not as a transaction, but as the start of a continuing customer relationship. He invested time in making us feel cared about, not just processed.

And it wasn’t just Basil. Nancy, our server for our anniversary dinner in The Ahwahnee Dining Room, took unrushed time to connect with our family, making our experience feel personal and memorable.

The next morning, Dylan, Isaias and Madeline, our breakfast servers, asked about our trip and made thoughtful suggestions for the next leg of our journey. These staff members weren’t just performing tasks—they were providing relational experiences that also enriched their own well-being.

A Stark Contrast

What made The Ahwahnee stand out even more was the contrast with other parts of our trip. Our Uber ride to the airport, airline flights, rental car pickup, and AirBNB stays were all cold and transactional. Most staff members barely made eye contact, much less engaged in real conversation. These were people performing mindless transactions, seemingly disconnected from their work.

At The Ahwahnee, by contrast, we encountered veteran staff members who genuinely seemed to enjoy their roles and their interactions with guests. That sense of fulfillment showed in their energy, attentiveness, and care.

It’s no wonder The Ahwahnee Hotel is sold out nearly every night of the year and spends little, if anything, on advertising. Their reputation is carried forward by the experiences they deliver and relationships they build.

The Business Case for Relational Human Experiences

This story highlights an urgent insight for today’s leaders: businesses caught in the Transactional Human Experience Trap pay a steep price. It costs more to acquire new customers. It costs more to recruit and retains staff. And their loyalty and engagement continue to fall. That’s a far cry from the “making money in our sleep” promises that fueled the early e-commerce and social media era.

Relational human experiences, by contrast, create a cycle of trust, engagement, and sustainable growth:

• Customers experience an emotional connection to staff and become loyal advocates.
• Staff members find emotional fulfillment in their work, enjoy greater well-being and stay with their employer longer.
• Businesses reduce the costs of churn, poor engagement and enjoy growth from reputational customer loyalty.

Escaping or Expanding the Transactional Human Experience Trap with AI?

This is where generative AI presents both risk and opportunity. If leaders deploy AI solely to lower direct costs, reduce staff, and eliminate human touchpoints, they will accelerate the march toward ever larger transaction factories.

But if AI is applied thoughtfully—to free up staff time, enable more personalization, and foster genuine human connections—it could actually expand the delivery of relational human experiences. Imagine AI handling rote administrative work so that staff like Basil, Nancy, and Dylan can spend more time engaging meaningfully and directly with customers.

The choice is not between efficiency and humanity. The real challenge for leaders is to design operational processes and customer experiences that achieve both.

The Key Insight

Our Ahwahnee Hotel experience illustrates a simple truth: customer and staff relationships are the most sustainable advantage and source of growth a business can create. Technology should serve to enhance those relationships, not replace them.

Escaping the Transactional Human Experience Trap requires leaders to reconsider their definition of business success—not as the pursuit of endless efficiency and direct cost reductions, but rather as sustainable revenue and profit growth that accounts for the fully-loaded human and economic costs they incur over time. Businesses and leaders that honor both will not only endure in the Age of AI, they will thrive.